Denver housing market increases resales, gains national attention
People thinking about investing in real estate in Denver have been bombarded lately with positive news on the condition of the housing market. The Denver Business Journal recently cited more positive data from a quarterly market report, which indicated that the local Denver housing market has significantly improved since 2011.
According to the report, the number of resales in the Denver metropolitan area increased in the third quarter by 15 percent when compared with the third quarter of 2011. Median sale prices additionally increased by 12 percent to $239,000. Looking at market time and inventory, the report indicated that the average number of days that a home spends on the market decreased by 37 percent to 63 days in the third quarter of 2012. The inventory of available homes decreased by 11 percent to 19,227 in quarter three, which is more than three times the decline being experienced in the rest of the state of Colorado.
"We are certainly encouraged by these trends, especially increasing prices and fewer days on the market," said spokesman Duane Duggan, according to the Denver Business Journal. "Consecutive quarters of higher sales and increasing median pricing should encourage consumers to return to the real estate market with new confidence."
Affordability in Denver
The study was based on multiple listing service data and conducted by Minneapolis-based 10K Research and Marketing. Another index that was introduced by the report for the first time is a statewide affordability index, described as showing what is necessary for people to qualify for the median-priced home under current and "prevailing" interest rates. Colorado was given a 166 affordability index, which is down 3 percent from the third quarter of 2011. The Denver metropolitan area received an affordability index of 161, which is down 2 percent from quarter three, 2011.
"An index of 120 means the median household income was 120 percent of what is necessary to qualify for the median-priced home," the report stated. The higher the number is, the greater affordability an area has.
Other market subsets in which Denver soars
The report also indicated that sales that were pending or under contract increased by 30 percent to 13,945 in the third quarter and the average sales price increased by 9.4 percent to $285,818.
In another recent industry report from the National Investment Center for the Seniors Housing & Care Industry Market Area Profiles, Denver was named as one of two markets to keep an eye on for senior housing construction. Denver's senior housing inventory has grown by roughly 28 percent in the past few years.