Known as the “Mile-High City” because of its elevation of exactly one mile– or 5,280 feet–Denver seems to have become one of “the” places to live in recent years as it offers incredible outdoor opportunities with the benefits of living in a city–and a cool city at that.
Located between the Rocky Mountains and the High Plains, Denver is known for its great access to world-class ski areas, craft breweries, great restaurants, and its healthy economy. The city boasts over 200 parks, 12 recreation centers, and numerous community gardens; it also owns several mountain parks including Winter Park Resort and Red Rocks Park.
Denver has four distinct seasons, claims 300 days of sunshine a year, and because of its elevation and location on the edge of the Rockies, extreme weather isn’t uncommon.
Denver’s diverse economy includes strong performances in areas such as telecommunications, energy, technology, tourism, finance, and distribution. Forbes lists Denver as #6 in its listing for Best Places for Business and Careers. Unemployment in metro Denver was 6.5 percent in 2013, a decrease of 1.2 percent from 2012. The Metro Denver Economic Development Corporation (Metro Denver EDC) projects employment growth in 2014 will increase 2.7 percent; the unemployment rate is expected to fall to 6 percent.
With a population of about 634,000 Denver is the 23rd most populous city in the US. The city has a relatively young population, tying for third with Seattle for its increase in 25- to 34-year-old residents. Median household income in metro Denver is a healthy $61,453, significantly higher than the average for US metro areas as a whole ($53,607). Net migration for metro Denver was 23,344 in 2013 and is projected to be 23,675 in 2014.
Denver Real Estate Market
The median sales price of single-family homes in Colorado’s metro region was $273,000 for Q4-2013, marking an increase of 7.8%, year over year, according to the Colorado Association of Realtors. The number of days on the market decreased compared to the prior year, dropping 26.2 percent, from 65 days to 48. As of December 31, 2013, there was a 2.3-month supply of single-family homes.
Denver Rental Market
Metro Denver EDC reports that the number of new residential units in 2013 was 12,235; that number is expected to increase to 14,885 in 2014.?The Denver Post reports that despite the addition of these new rental units, average rents in metro Denver increased by $63 in 2013, from $978 to $1,041.
The apartment vacancy rate in Q4-2013 was higher than it has been in two years, at 5.2 percent, according to the Denver Post. Demand by younger professionals for high-end apartments close to Downtown has been blamed for the increase in rents. According to Ron Throupe, a professor of real estate at the University of Denver, the city has been one of the hottest spots for young adults and “when they come to town, they aren’t going to buy a house. They are going to move in with a friend or get a unit on their own,” so they’re more likely to rent.
Apartment rent and vacancy rates aside, looking at vacancy rates for all rentals of 1-4 units, the Colorado Division of Housing reports the metro Denver vacancy rate in Q3-2013 was 2.9 percent, with average number of days on the rental market at 48.2 and an average rent of $1,140.55, up from $1,090.76 the previous year.
So How’s Denver Doing?
Denver’s economy, real estate market, and rental market are strong. CoreLogic Case-Schiller predicts home prices will increase 2.7 percent from Q3-2013 to Q3-2014, and 3.4 percent from Q3-2014 to Q3-2015. 10,000 to 12,000 apartments are expected to enter the metro Denver rental market; predictions are these will be absorbed over the next 2-3 years. Their impact on rents and vacancy rates is yet to be seen, but the influx of young professionals, seeking a solid career and great lifestyle options, doesn’t seem to be slowing.
Are you a property manager or realtor in Denver? We’d love to hear how things are on the ground, please comment!
By Tracey March