Would you believe Denver is currently the hottest real estate market in the country, beating out even San Francisco and Dallas-Forth Worth? Well, it is! The median house price in Denver continues to climb, presently standing at $417,000, while the average days-on-market continues to shrink. This is having a tremendous effect not only on Denver’s economy but on Colorado Springs’ as well. Colorado’s current real estate market and the factors contributing to it have the potential to transform the entire state. It’s therefore crucial to understand this phenomenon. To help explain it, we welcomed Bill McAfee of Empire Title into the studio once again.

Bill began by explaining why house prices in Denver are high and will continue to climb: There is a massive shortage of housing; interest rates are historically still very low; Denver’s unemployment rate is hovering around 2%; and Millennials are leaving their parents’ homes in en masse. The local economy is doing extremely well, which enables workers to afford new or upgraded homes while also drawing in new workers from out of state to drive up demand for what little supply there is. As an example, one listing for an average 1,200 sq. ft. house generated over 50 offers and ultimately sold for $240,000—over $200 per square foot!

While Denver, as a housing market, it in a league of its own, Colorado Springs is faring fairly well on its own. The average house price is $260,000—a healthy increase over the last few years—and our unemployment rate stands around 5%. Bill sees many reasons to be optimistic about the near-term performance of the Colorado Springs area, not least because the projected downsizing of the Springs’ military presence turned out to be a lot less drastic than originally anticipated.

Bill also points out that Colorado Springs is directly benefiting from Denver’s wild housing market. Buyers who either can’t afford housing in Denver or who are looking for bargains are passing over Castle Rock and giving northern Colorado Springs a chance. If one breaks down the Colorado Springs real estate market by neighborhood, they’ll see the most rapid increases are occurring in the north. Because comparable homes in the Springs can go for $100,000’s less than in Denver, many Denver residents are moving south to take advantage of the pricing disparity. Naturally all of Colorado Springs will benefit from the infusion of new residents, particularly since those new residents will be making Denver-area salaries while living—and spending—in Colorado Springs. Especially compared to areas of the Rust Belt and the Northeast, Colorado Springs is doing extremely well economically, and this is evident in our real estate market.

The entire I-25 corridor is being reshaped by Denver’s astonishing housing market, yet few Colorado residents have any experience living in such close proximity to a nation-leading real estate boom. The area shows no signs of slowing down anytime soon, and any changes to our state as a result of this boom will be quick to arrive and will endure for decades. It’s important to understand what is occurring right in our own backyard and what the effects will be, both in the coming years and decades down the road.

Comments are closed.