We may not be in a citywide bull market, but there are plenty of reasons to feel pretty darn good about real estate in the Mile High City this year. This is especially true of Highlands, which has become a nationally recognized, trendsetting model for the possibilities of 21st-century new urbanism. Here’s how Highlands became the hottest part of town—and which local neighborhoods might be next.
How Low Can It Go?
Denver’s real estate market is promising for both buyers and sellers—if only there were more properties to buy and sell.
Real estate brokers may not agree on strategic approaches or where we are in the market curve, but they’re unanimous about one thing: We need more inventory.
Although the worst of the foreclosure crisis is probably over, banks are still sitting on countless repossessed homes nationwide. It’s frustrating buyers, sellers, and brokers alike, especially in a relatively strong market such as Denver. “Right now we have about 10,000 properties on the market; four years ago we had about 27,000,” says Charles Roberts, a co-owner and managing broker with Your Castle Real Estate. “Our inventory is down 39 percent from last year for single-family homes, and more than 50 percent for condos. It’s a dramatic change, and it’s driving everything right now.”
The reasons for the shortages vary. When foreclosed properties flooded the market a few years ago, they were often dumped as low-priced, as-is deals that investors could quickly fix and flip; now banks are releasing homes much more slowly, but in better condition. “They’ll put in new carpeting, interior paint jobs, anything to make them more marketable,” says ERA Herman Group’s Lina Krylov. “It helps bring them closer to market price.”
Then there’s the ongoing perception among would-be sellers that we’re in a buyer’s market. “Everyone in Denver thinks that, and under $500,000, nothing could be further from the truth,” Roberts says. He says that potential buyers in the 25 to 35 age range have only known bad markets, so they’re “overcorrecting” by remaining renters. And more renters means fewer homeowners.
For now, all brokers can do is wait and educate on-the-fence sellers about how the combination of lower-than-ever interest rates and minimal inventory—not to mention Denver’s recent ranking by the Case-Shiller index as the number-three real estate market in the country—should finally motivate them to dive into the market.