Home Prices To Rise, Rents To Slow In Denver

January 17, 2017

New construction has failed to keep up with rises in population and employment in Denver, causing the median price of a house in the metro area last year to jump 11.4 percent.

The Denver Post reports that real estate analysts predict that Denver will again be a hot market in 2017. Conservative estimates say that house prices will rise around 4 percent, while others can see another double-digit increase. VeroForecast, for instance, predicts that Denver will experience a 10.2 percent price gain this year, the second-highest rate in the nation behind Seattle’s 10.6 percent jump.

The climbing house prices may be due to what’s going on in the rental market. Many analysts predict  between 1 percent and 3 percent rent increases, which would be down from the 8 percent to 10 percent jumps from a year ago. The city had an increase in multifamily construction last year.

Stable or falling rents could leave more tenants comfortable with not making a move, while also persuading some investors to take their chips off the table and sell their rental homes. Rising mortgage rates could also prove a headwind to future price increases by reducing the ability of buyers to qualify. “Each rate increase takes a small percentage of buyers out of the market,” said Mark Trenka, chairman of the Colorado Association of Realtors.

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