Denver Housing Market: A Tale of Two Cities
By CAR Spokesperson Matthew Leprino. Read the entire article on Colorado Biz Magazine.
Like Charles Dickens’ fabled tale, Denver’s housing market remains conflicted in its ‘Tale of Two Cities,’ a lopsided story of condos and single-family homes. It would seem that with every dollar the single-family home’s median price rises, the demand for the condo market – tantamount to “entry-level” – rises as well. Recent legislative changes benefiting the development of condos will certainly alleviate the demand, but how soon and to what degree?
While many predictions have circulated that apartment communities now under construction will suddenly turn to condos, the actuality is that most, if not all of these megaplexes have deed restrictions placed on them by the developers, preventing their conversion until after any defects’ statute of limitations has passed.
That means the 2025-2028 markets are likely to see this flood of condos if demand and lower rent rates warrant the shift. Due to previously undesirable development legislation, these projects simply weren’t affordable to build as condos and demand continued to rise during their stagnation, causing the traffic jam we see today.
Today, on the other side of the changes, current data provided by the Colorado Association of REALTORS® shows that immediate demand could stretch many more years in its ability to fulfill those demands to the scale in which we need. With a decline of available inventory of 13 percent between August 2016 and August 2017, the first developers have begun dipping their toes into the market water and have established precedent for lower bankrolled – and therefore more risk-adverse – projects to proceed.