Last year, Colorado’s population increased to almost 102,000 new residents. In response to the influx of people, 25,143 new homes were added (homes, condos and apartments) last year and 10,000 more are set to be built by the end of 2016 according to two recent articles by the Denver Post (article 1 and article 2).
The first quarter of 2016 marked an impressive growth for New Home Start Ups with 26% year over year (YoY) which is the highest level since 2007 according to a recent report from Metrostudy. This is great news for Denver as new homes are being built for new residents.
According to Metrostudy, homes priced above $400,000 represented about 60% of the market during the first quarter in 2016. For those wondering about homes under $400,000 we have been noticing that those who previously purchased homes in the $100,000-$400,000 range have now accrued enough equity to where they can upgrade homes. This will allow for those with a budget ranging from $100,000-$400,000 to have an opportunity to buy those homes. Undoubtedly, as demand increases and population grows, home values will continue to be driven upward. Rates have also remained low, so people are taking advantage of this unique situation to buy a home when they previously didn’t want to or thought they couldn’t. How will that impact you?
If you already own a home you could chose to get an updated home value and see if you can afford to purchase an upgrade or if you absolutely love your home, wait and let your equity keep building. If you are not a current home owner and are choosing to wait (whether you are uncertain, don’t think you can afford to buy a home, or simply would like to wait) you could end up having to spend $7,500-$10,000 (3-4%) more for a $250,000 home if you chose to buy in August 2016 vs July 2016 (according to a recent study by RECOLORADO.com detailing growth in the housing market). Low interest rates have also allowed buyers to have a greater purchasing power.
The great news is that new homes are being built in Colorado, property values still remain affordable for the area and interest rates have remained low which make this still a great time to buy a home.