Nothing stands in the way of Colorado’s real estate market
Not even COVID-19
Like with any market shift, opportunity is all in the perception. Paralyzed by the COVID-19 pandemic, many people are frozen in their tracks. Fear prohibits the foresight to capitalize on a shifting market and see it for the opportunity it presents. Despite COVID-19, the housing market in both Denver and Colorado Springs makes a strong case for investment, especially when considering the long-term benefits 20-years from now.
Strong Market Temporarily Slowed By Pandemic, Followed By A Bounce According to the Denver Metro Association of Realtors (DMAR), the effects of COVID-19 significantly slowed the number of new home listings and home sales closed in March and April of 2020. Unlike other parts of the country, however, the Denver housing market began to bounce back in the months shortly thereafter and continued a strong incline. Home prices returned to pre-pandemic levels, and the market is in recovery. The historically strong Denver real estate situation has proved its resilience once again, making now a good time for the long-term investment.
As COVID-19 stormed into the country, many feared the housing market would take a turn for the worse. But fortunately, just the opposite occurred. Lower interest rates, pent-up demand and quarantine have resulted in the recent housing boom.
This new layer of demand has pushed inventory levels incredibly low, thus driving Denver median home prices to new highs, topping $600,000 in August. While home values continue to appreciate, this is good news for investors looking to make 20-year real estate investments in 2020.
Why Invest In Colorado’s Housing Market Now?
Where does opportunity hide in a pandemic? Homeownership is the number one investment for the average American, whether intentionally investing dollars in the housing market, or buying a home out of desire/necessity. Because so many Americans purchase a home (or multiple homes in their lifetime), the nation’s housing market remains relatively stable and a good long-term investment. The standard demand for homes along with the current pandemic’s impact on work-from-home, urban flight and vacation properties has increased the demand for homeownership.
The Denver housing market is no exception. The demand for Denver homes has been hot for years. High employment rates and a prime location keeps Denver desirable for current residents to remain, and an ideal location for those seeking a lower cost of living than more coastal areas of the US. With companies like Amazon and Palantir Technologies adding staff and moving headquarters, Denver continues to attract commerce and a strong workforce that will support investing in this strong housing market for the long haul. The opportunity for refuge in the beautiful outdoors Denver offers is attracting new residents from all corners of the country as well.
Like any market, the US economy is impacted by many factors, like the potential for another COVID-19 wave and the upcoming election. If one waits for the market to stabilize, they may find themselves waiting until next year when the picture is clearer. The upside of waiting would be entering the market primed for a bargain. But keep in mind, a declining housing market is likely to scare off sellers and keep them out of the game, driving inventories even further into decline and preventing a potential bargain.
Short term, investors are taking advantage of great interest rates and pandemic-driven lifestyle shifts, both of which are driving sellers to the market. Investors are putting their dollars into the Denver real estate market for the long-term stability it has offered in the past. It is hard to argue with a market that continues to appreciate despite a pandemic. Denver also continues to offer a stable future by a renewed effort to deliver a strong economy and attract commerce and jobs that help support the housing market.
Now that Americans know what COVID-19 looks like medically, socially and economically, a more likely scenario keeps people closer to the status quo and fear at bay. Despite the spring 2020 COVID-19 dip, the Denver housing market remains strong with record-high home prices, low inventories, increasing demand, low mortgage rates, a shift in housing demands and a continually strong economy.
Provided that one is buying for the long-term, considering all the shifts from COVID-19, an investment in the Denver housing market will be worth more in 20 years than it is today. The market shifts in the next months or year won’t matter as much when investing in the long-term.
Michael Hills is an experienced real estate investor and the Vice President of Brokerage at Atlas Real Estate, a Denver-based full-service realty firm specializing in real estate investments, brokerage and property management. Michael shares his strategy and how he got started in a free monthly webinar. Join the next session at https://www.realatlas.com/co/events/.