Denver, Colorado has been one of the nation’s hottest housing markets over the last couple of years. But what about now, in 2017? Is the Denver real estate market warming up, as we head into the spring? Or is it cooling down? That all depends on how you measure the “temperature.”
A recent forecast from Zillow suggests that the Denver real estate market is cooling down in 2017, at least where home prices are concerned. But another report from the economic research team at Realtor.com ranked Denver as the fourth hottest housing market in the United States, during February 2107.
So it appears that the red-hot Denver real estate market is experiencing a bit of a cool-down where home prices are concerned, even though demand is still very high across the metro area. Here’s what you need to know about these latest housing reports:
Zillow: Home Prices Are Cooling in Denver
According to the real estate data company Zillow, the median home price in Denver, Colorado rose by nearly 10% over the last year (March ’16 – March ’17). But homeowners in the area probably shouldn’t expect that kind of appreciation through the remainder of 2017. Zillow predicted a more modest gain of 3% over the next 12 months, through March 2018.
This is a positive trend, from an economic standpoint. Appreciation of 3% is much closer to the annual average for home-price gains nationwide, going back several decades. That’s what you might call “normal” appreciation. Double-digit home price increases in a single year are abnormal, and they’re generally not sustainable over the long term.
So perhaps what we are seeing in the Denver housing market is a return to normalcy, where home-value appreciation is concerned. This cooling trend is something we covered back in November of 2016.
But don’t let that fool you. The Denver real estate market might be cooling down in terms of year-over-year house price increases. But it’s still a very hot housing market with a high level of competition from buyers. In fact, Realtor.com recently ranked it as the fourth hottest in the nation.
Relator.com: It’s the Fourth Hottest Housing Markets in the U.S.
On February 23, 2017, Realtor.com updated its ranking of the hottest housing markets in America. Denver has been on the list for some time, but it moved up the ranks to #4 in the latest update.
The company’s economists and housing analysts looked at cities where homes are selling quickly, and where there’s a lot of demand from buyers. In January, Denver was ranked as the eighth hottest housing market in the country. In the February report, it moved up to fourth. Vallejo (California), San Francisco, and Dallas took the top three spots.
According to Jonathan Smoke, Realtor.com’s chief economist:
“Strong off-season [housing] demand powered new seasonal highs in prices and left us with a new low in available homes for sale. Potential sellers take note: This year is shaping up to favor you even more than last year.”
Conclusion: Is the Denver housing market cooling off in 2017? A little, at least where home-price appreciation is concerned. But there’s still a very high level of competition among buyers, due to limited inventory. Home buyers should be prepared for this as they enter the market.