The best places to buy real estate in Colorado
There’s no wrong place to buy, but here are the five cities with the highest potential
Colorado is one of the hottest real estate markets in the U.S., and it’s easy to see why. First, the state has an unparalleled quality of life; according to U.S. News and World Report’s annual rankings, Denver and Colorado Springs were the No. 2 and No. 3 best places to live in the entire country, and Telluride is the No. 1 best small town to visit. Colorado also boasts a booming economy, ranking as the No. 1 economy out of all 50 states for the past three consecutive years.
People want to live in Colorado, and when they get there, those people need places to live. So, if you’re a real estate investor, where should you buy property in Colorado? Well, in a market this hot, there’s almost no wrong place to buy. But here are five cities that offer some of the greatest potential.
Once thought of as a humdrum military town, Colorado Springs has come into its own as a vibrant destination city.
The Colorado Springs real estate market is in the middle of a protracted boom; the median home value is $313,396, which is almost 50% higher than the national average. The past year, the city’s real estate market grew a healthy 6.3%, and is projected to increase an additional 5% in the next year, which is notable considering that most U.S. markets are project much lower growth, or even small declines.
The median rent in Colorado Springs is $1,640, which is just slightly higher than the national average of $1,500. Looking at those median rents alongside median home prices, Colorado Spring is more of a “buy and hold” market than a rental investment market.
This quaint former mining town on the Western Slope offers access to the Colorado River, the 225-million-acre White River National Forest, as well as proximity to Vail, Aspen and Glenwood Springs. If you’re looking for an outdoor paradise, you’ve found it.
But this small rural town isn’t exactly a well-kept secret; the median home value is a healthy $370,220. Still, it’s a relative bargain compared to nearby Vail, where the median home value is three times higher, or Aspen, where it’s six times higher. When you consider that the market here seems to be accelerating (after growing 3.1% in the past year, it’s project to grow a further 4.4% in the next year) at a time when the rest of the country is bracing for a softening market, the investment potential is clear.
Whether you’re planning on buying and holding, keeping a vacation home here or renting, now’s the time to buy in, because home values are expected to rise sharply in the near future.
As mentioned above, Telluride is ranked by U.S. News and World Report as the best small town in America. A ski town about six hours outside of Denver, it’s nestled in the San Juan Mountains, boasts 300 days of sunshine a year, 300 inches of annual snow and various music and cultural festivals.
As you might expect for a town in the No. 1 spot, home values here are high; the median home value is just under a million, at $987,598, and home values here have increased 2.8% over the past year, and are projected to increase by 3.4% in the next year. Telluride is a mature market and a vacation home here would be an extremely safe investment.
There are a staggering 54 colleges within 100 miles of Boulder, making this the most college-rich college town in America. Like most college towns, Boulder offers a progressive atmosphere, lots of public green space, village-style development and great nightlife and dining, making it an attractive place to live for everyone from students to young families.
Right now, the median home value in Boulder is $793,578; home prices have increased 2.5% in the past year and are projected to increase 3.8% in the next year. The median rent price is $2,500, which indicates that this could be a great market to invest in a rental property. Any town with this many students is going to have bottomless demand for rental properties, and if you’re looking more upscale, you could also purchase a luxury or vacation rental property.
The state capital had to make this list. After a white-hot run as one of the top markets in the country, the Denver market flattened last year, recording growth of only 0.4%, bringing the median home value in Denver down to $454,940. But the market’s projected to resume average to above-average growth over the next year and increase by 3.6%. It’s likely this market still has a lot of room to grow, so now is a great time to buy in.
The city also has a median rent of $2,150, which is relatively high compared to home values. That suggests investing in a rental property could be very lucrative here.
(Editor's Note: This article was written at the end of February, keep in mind that certain numbers could have changed due to market conditions.)
Ben Mizes is the co-founder and CEO of Clever Real Estate, a free online service that connects you with top real estate agents. Mizes is also an active real estate investor with 22 units in St. Louis, and a licensed real estate agents in the State of Missouri.