'Prices are too high!' Not compared to other cool cities
One of the most common phrases I hear today about Denver's real estate market is that "prices are so high!"
Yes, that's true. They're higher than they've ever been.
But unless you're looking for big cash flow from an investment property right now, Denver's still a great place to buy. In my opinion. (Insert obligatory disclaimer about not being an economist nor a fortune-teller.) The metro economy is diversified and continues to grow, we have legal weed, great beer, 300 days of sun, and a burgeoning tech sector. Combine those factors with a low stock of homes and a high high demand, and that to me means good long-term potential for appreciation.
This is just a way for me to back into my favorite real-estate story I read this year. And it gets to my above argument.
In March, an economist for Zillow released a report that ranked the top 10 cities where rich millennials live. You're probably not surprised to learn that Denver was on the list. But here's what I found interesting: Of those on the list, Denver had a significantly lower median home price than all other cities.
Denver's median home price was $331,100. The next closest was Jersey City with a median home price of $345,800. After that, the next closest quickly climbed to a median home price of $500,000, then $600,000 and on up to San Francisco, which had a median home price of more than $1.1 million.
What does this mean? It means to me that of all the cool places the next generation of home buyers want to live, Denver is still relatively cheap. Until our prices find some equilibrium with those other cool cities, we're going to continue to be a draw for those rich millennials. And that means prices are not going down long-term.
Now, will the market soften at some point, maybe even drop a little? Probably. But real estate's not about timing the market short-term. It's a long game.
Looking to start the search for your home or investment property? Contact me today.