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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