The Denver
housing market is not getting any easier to navigate for buyers.
Last week,
the Denver Post reported that month-end inventory in February fell to an
all-time low of 3,963 active listings, the lowest number ever recorded since
the Denver MLS was formed in 1985.
Fact check: in
1985, the population in the Denver metro area was 1.6 million. In 2015, the population in the Denver metro
area topped 3 million for the first time.
There are so
many ways to parse the numbers, nearly all of them painful if you are a
prospective buyer, and especially so if you are trying to buy a home below
$400,000.
With
3,000,000 people in the metro area and 3,963 homes for sale, that’s one home on
the market for every 757 people.
But with
fewer than 1,400 homes for sale below $400,000, that works out to one active
listing below $400k for every 2,142 people.
Let me restate that… for every 2,142 people living in the metro area, there
is one home below $400k on the market.
Can you see
why prices are soaring?
Colorado
experienced record population growth last year with a net gain of 101,000
new residents. That works out to 270
people per day, every day, with half of those ending up within 40 minutes of
Denver.
While
101,000 people moved here last year, fewer than 10,000 new homes were constructed in the
metro area. If half of the people who moved here end up within 40 minutes of Denver and each new household has
2.5 residents, on average, that means the pool of people renting homes or apartments in the metro area increased by more than 25,000.
And with
unemployment in the metro area at 3.3%, surging rents and skyrocketing home prices, it's safe to say most of those apartment dwellers aren't looking to rent for the rest of their lives.
They will essentially make up the next wave of buyers.
No matter how you look at the numbers, they all tell the same story. Denver is going through a painful gentrification process which is not only driving out those who used to be our entry-level buyers, it's now taking aim at what has historically made up our middle class as well.
