Colorado real estate is expensive – and this comes from several reasons.
First, it’s the economic growth and the population boom. It seems that, lately, everyone wants to move in Colorado, whether it is for a better job and career opportunities or for the beauty of its landscape. Statistics show that the state has grown by about 80,000 people since 2007, which puts it in the 7TH place among the fastest growing states.
In these circumstances, the demand for housing has also grown significantly and it is bound to keep going up. However, the downside is that the supply is low compared with the demand for a high quality of life that people have when it comes to living in Colorado. Builders create new apartments and neighborhoods in the suburbs, but are more focused on luxury homes and will probably remain like this as long as the interest rates will remain low (as long as interest rates are low, people will afford to buy more expensive homes). Besides, low rates do not attract only traditional buyers, but also investors, who purchase homes to rent them or make certain repairs and renovations and resell them for a higher price.
Another reason why Colorado real estate is expensive is that most people nowadays consider buying bigger homes if they can afford them, which is particularly true now, during the pandemic, when so many individuals work from home. Working from home may sound like a dream come true, but in reality it is not easy to cope with personal and professional life if you do not have adequate space. Therefore many people leave downtown and opt for single family homes in the suburbs, which allow them to take better care of their current needs.
In 2021 and 2022, single family homes are expected to outperform sectors like retail, commercial and hotel, and reach the highest level in the last 15 years. Home prices will increase over the next 3 years, according to a report based on surveys of economists and real estate organizations.
Finally yet importantly, let’s not overlook the fact that Colorado continues to be a very desirable place to live due to the overall quality of life here. Houses for sale in Southlands, and houses in the Denver area in general, continue to sell quickly.
So, there are advantages of living in Colorado, there is no question about it, but housing is indeed expensive. Can we expect to see homes drop in price anytime soon? Experts rather say no. Actually, some estimate that prices will keep growing quite rapidly, at least in certain cities, due to low housing supply. For example, Colorado Springs, which is one of the hottest housing markets in the United States is expected to see a 5% increase in home prices, even once the pandemic is be gone. There are also predictions about certain depreciation in home value, but not in Colorado.
The average home selling price in Colorado is now about $400,000; two years ago it was $300,000. Homes will not drop in price anytime soon and those who cannot afford such prices will have to consider renting.