Market Update, February 15, 2024

US News and World Report just came out with a report that says The Mile High City is the hottest housing market in the country. Let’s dive into their methodology and see why they think the market is hot here.

Demand for Housing

Data from the University of Michigan indicates that Denver-area residents are optimistic about the economy and future. Sentiment has improved more than 9% in the past year and climbed over 17% from a low in June 2022. Higher consumer sentiment can result in higher demand for homes.

Unemployment has remained relatively steady here for the past year at about 3.3%, a vast improvement from the highs we saw during the pandemic, and is low compared to historical averages. The total number of people employed in our area has increased 12.5% in the past year. More people working can also increase demand for homes.

We all know home prices here are high, but they’ve remained relatively steady for the past year – up about 1%, according to this study, while rents rose 2.6%. Higher rents and stable home prices can also increase demand among prospective home buyers.

Housing Supply

We’re still far below our average number of homes for sale, but inventory here is rising. We have 2.03 months of supply, an increase of .43% over last year. This is more than we’ve had in the past six years, and expectations are that inventory will continue to rise, giving buyers more to choose from. 

Rental vacancies are also up almost 1% year-over-year, which can help put a lid on rental price increases.

Builder sentiment has improved 10% compared to a year ago. If builders here see a more promising future, it could mean we’ll see more supply.

Construction costs are up about 1% compared to last year, while there’s also been an almost 1% increase in construction jobs.

The supply of homes is one of the biggest problems we face. If supply increases, that can provide some relief to buyers.

Financing

We’re still seeing issues when it comes to financing. Interest rates remain high, for example, keeping many buyers and sellers on the sidelines. Home prices – and rents – are still high compared to incomes.

Foreclosures remain unchanged from a year ago, and mortgage delinquencies are about the same as a year ago. About 0.6% fewer people in our area have access to mortgage loans now than a year ago. These numbers are better in our area than in many other parts of the country.

Since the start of 2024, we’ve been very busy showing homes and getting sellers ready to list. We’re seeing more competition among buyers for well-priced homes and more situations where sellers get to choose the best from multiple offers. If you plan to move this spring or summer, we recommend you contact us now to get started. 

Other cities considered “hot” by US News were in the southeast, including Raleigh, Durham, and Charlotte, North Carolina, and Virginia Beach, Virginia. Greely, where we’ve seen a lot of new development in recent years, came in at 15th among the hottest markets in the nation, and Colorado Springs was ranked 19th hottest market.