While home ownership in America was once seen as a stabilizing economic force, the housing bubble of the past decade pushed many into mortgages that they couldn’t afford when the housing market crashed in 2007. The overleveraging of credit through risky mortgages was seen as a symptom of flawed tax and housing policies, and renting, not buying, is being promoted by some as a safer way to ensure economic stability (1). But the logic behind this new rationale is now flawed, especially in the Front Range where Denver real estate conditions are much improved.
Denver commercial property was indeed overpriced during the real estate bubble that developed from 2000 to 2007. But as Andy Knudtsen of Economic and Planning Systems, Inc. shows, property prices in the Denver area have actually fallen 12 percent since the bubble burst, stabilizing in March of 2009 (2). This means that consumers looking for Denver homes for sale can now get good deals on properties that feature low, stable prices.
In fact, the 12 percent average drop in Denver real estate prices was much smaller than in certain areas of the metro area, such as Glendale, where certain Denver condos and apartment prices dropped 33 percent from 2005 to 2010. Often these larger drops in real estate prices were in newer properties and buildings, whose facilities and locations are just as prime now, but whose prices are much more reasonable.
Of course, for homebuyers who purchased Denver real estate between 2000 and 2007, this means that the price of their Denver property is most likely lower than when they first purchased. For these property owners, there is a silver lining. For starters, rental rates are increasing at a steady pace and vacancy rates are near a 10-year low (2), so there aren’t many other options that would be better than their home. Furthermore, foreclosure rates are dropping (3) and the state’s population is still increasing by double-digit rates, meaning demand for Denver real estate should return.
For new homeowners not bogged by underwater mortgages, this is a great time to be looking for Denver homes for sale. With Denver property at reduced prices, and many foreclosed houses selling for steep discounts, now is a great time for any Denver homebuyer, whether looking for an investment or a great home to live in. With property values stabilized and the state’s population increasing, look for Denver property values to increase in the coming years, keeping Denver real estate as the strong, stabilizing asset it almost always has been.