As of June 2020, reports by the National Association of Home Builders (NAHB) and the Wells Fargo Housing Market Index showed a seven-point increase in builder confidence for new single-family houses. Based on this kind of trend, experts now believe that the real estate market will play a critical role in the nation’s economic recovery.
If you are looking to buy an investment property, you will need to dig deeper into the current local trends to find out what the housing market holds for you.The Denver market is already showing signs of rebounding and is already pulling more home investors.
According to the Denver Metro Association of Realtors (DMAR) latest report, the housing market in Denver made a significant comeback last month with a 57.3% increase in home sales. Here are some of the positive things happening and some attractive factors as to why the Denver real estate market still seems lucrative.
The quality of life in Denver
Lying at 1 mile above sea level on the western side of the High Plains and with a series of mountain parks and natural areas, Denver is one of the most beautiful cities to buy an investment property in. According to the U.S. News and World Report, Denver ranked number 3 for best residential areas and 37 for the best retirement destinations in the U.S. Considering the impacts of COVID-19, Denver still ranked high on quality of life, jobs, and desirability. These factors play a big role in drawing potential investors and homebuyers to the local housing market. Macrotrends.net estimates Denver’s current population to be about 2,900,000 and is the 19th most populous metro city in the U.S. with a 2% average median rent increase as of June 2020.
Strong Return on Investment (ROI)
If you are keen on buying a rental property, you should note that Denver’s median home price is about $465,000 and has a median monthly rent of approximately $1100 for a one-bedroom house. This translates to a strong ROI average of about 8-13% considering the coronavirus impacts
A mile-high city for millennials
Despite ranking high as a top retirement place, a CommercialCafe study ranked Denver as the top metro cities for millennials that want to relocate. With a specific attraction to the high tech centers in Denver, Generation X now makes about 25% of the region’s population. This increase in the number of millennials relocating to Denver generates more demand in the local real estate market resulting in increased rent and home prices.
Rentals for students
Denver’s college market is extremely diverse and you can make a killing out of it by either renting to the massive student populations and/or selling to graduates who decide to stay.Denver has about 53 colleges located within every 100 miles and a student population of over 600,000 that might need either temporary or permanent residences. As things start getting back to normal amid the pandemic, it is important to keep in mind that Denver’s rental market for students would be a great place for your investment.
A rental-rich housing market
Forbes recently ranked Denver as one of the best markets for home investments due to its significantly low vulnerability to the coronavirus impacts. More than a third of the Denver metropolitan, currently rents. This coupled with scarce housing inventory, increased millennial population, and high home prices are rapidly rising the local rental market forcing most homeowners to subdivide large homes into several apartments.
A landlord-friendly environment
Denver is a landlord-friendly area and you don’t have to worry about uncooperative tenants. You can immediately start evicting and rekey locks if they haven’t paid their rent, late fees have no limit, and get sheriff assistance in forcing lease violators after a 5-day notice. All these are geared to help protect your Denver-based property investment.
Other economic factors boosting Denver’s Housing Market
Job growth and opportunities have been a major reason why many people decide to move to Denver and consequently lead to increased demand in the local housing market. According to the U.S. Bureau of Labor Statistics, Denver is currently experiencing a close to 3% unemployment rate and has an average weekly wage of about $1,265 that is still favorable for in-migration.
Denver’s growth limit
Expansion of the Denver real estate market is restricted towards the west due to a combination of suburbs, massive national forests, and vast mountain parks. This limitation maintains high home prices compared to how they’d perform in other states.