What to Expect From the Denver Real Estate Market

What to Expect From the Denver Real Estate Market

Highlands Ranch, CO, is located 19 miles south of Downtown Denver and is home to a population of approximately 106,000 people within 25 square miles. This unincorporated community sprang up in the late 1970s and has since become home to well-performing schools, a library, public parks, and a great network of bike paths. Residents who once had to drive into Denver for essential supplies (or posh comforts) now have everything they need from the Highlands Ranch location.

Highlands Ranch sits 5,817 feet above sea level — several hundred feet higher than “The Mile-High City” of Denver. Relocators may find they’re a little short on breath when they first arrive, thanks to the elevation and the beautiful Rocky Mountain scenery. Some tips for acclimating include staying hydrated, eliminating alcohol intake, temporarily reducing physical activity, and consuming high-potassium foods (including avocados, bananas, cantaloupe, dates, green vegetables, potatoes, and tomatoes).

The current median price for Denver real estate (particularly Highlands Ranch homes for sale) is $763,000, up 19% from last year’s median price. It’s a seller’s market as people continue to leave metropolitan areas like Los Angeles and Boston in favor of smaller cities with more opportunities for real estate investment and long-term quality of life.

Overall trends in 2022

According to a recent trends report, the dramatic increases in the median value of Denver real estate (including Highlands Ranch homes for sale) have primarily been due to the ongoing global health crisis related to COVID-19, which has created new housing indicators in many markets. Additionally, Denver is famous for its strong job market, low unemployment rate, and endless, year-round outdoor recreation in the Rocky Mountains. Highlands Ranch has the 18th largest economy in the United States, is a central U.S. transportation hub, and a major location for governmental operations, telecommunications, and technology.

Lower borrowing rates and government stimulus have also resulted in greater competition for a decreased inventory of homes near Denver. As a result, sellers of Highlands Ranch homes for sale have increased their asking prices. This trend will continue as long as the supply/demand scales tip in favor of sellers.

Denver real estate forecast for the next year

Over the next year, homes in the Highlands Ranch and Denver area will likely get more expensive as inventory remains tight. As the area is currently experiencing a seller’s market, demand will outweigh supply, and median housing prices will likely increase over the next year.

The United States Federal Reserve has indicated its intention to increase interest rates several times this year, ostensibly to combat inflation. In turn, higher interest rates will further increase homeownership costs in the Denver market, which may further increase home prices.

Guidance for investors

The Denver real estate market boom affects home buyers, renters, and potential institutional real estate investors in the area. Does an investor dive right in before the markets zooms higher, or do they wait until pricing and availability “cool down” before taking the plunge?

There is no right answer. Every investor has to weigh their risk aversion before making a move. However, the fact remains that, with an expected 8 to 10%% rise in home prices over the next year, now could be an opportune time to invest, at least to build a long-term portfolio of passive income. Below are some reasons why.

  • Interest rates on traditional loans are low, historically speaking
  • As interest rates rise, the monthly cost of ownership increases, driving demand for rental properties and driving up rental prices.
  • The price-to-rent ratio suggests high housing prices increase rental demand

One of the most common investment strategies in Denver real estate is rehabbing, or “house flipping,” where an investor buys a property at a discount (due to its condition) and then renovates it to sell at a profit. Even though the housing market has shifted with higher home prices,the abiltilty to purchase outdated homes and renovate continues to be a viable option for homeowners and investory.

Investors who choose to take advantage of low mortgage rates to acquire homes for renting purposes could potentially subtract thousands of dollars from the total cost of their home purchase. They also can increase their monthly cash flow once the property is rented.

Where home flippers must buy homes below market value to pad their profit margins, rental investors can buy homes at current prices and rent them out to recoup their investment. As a result, the cash flow will help offset purchase costs in just a few years while the investor builds equity in the physical asset.

Ready to view Highlands Ranch homes for sale?

The local realtors at Elevated Life Real Estate can help pinpoint your new home within the fantastic inventory of Highlands Ranch homes for sale. Elevated Life Real Estate’s track record of success is built on accurately analyzing current trends within the Colorado real estate market and providing well-researched advice based on each client’s wants and needs.

If you’re looking for a Denver dream home or want to buy (or list!) a Highlands Ranch home for sale, contact Elevated Life Real Estate today.

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