About this time every year I like to sit down and try to do my best to predict what the Real Estate market in Denver will do in 2013. Of course it is always a challenge and I can't predict with any degree of certainty, but as I start making predictions this year, I find myself much more confident in what will happen than years past. In 2012, we saw the market transition almost overnight from a strong buyers to market to a pretty neutral and at times, seller's market. The record setting activity we saw last summer has stalled a little this winter for the simple fact that there is now record low inventory, down 50%, and almost nothing for buyers to choose from.
I've heard talk from a lot of sellers that come spring, they will be willing to give it a shot again since that is considered the prime selling season and they figure more buyers will be out. Buyers have told me the same, they are waiting for spring for more houses to be on the market. If both parties stay true to their word, then I expect 2013 to be the best Real Estate market we have seen in over a decade in Denver in terms of sales, average sales price and appreciation.
The key to this market continuing to thrive will be availability of homes. The road block right now is that home owners that would like to move up to a higher priced homes aren't seeing potential homes on the market they could move into. As a result, they are hesitant to put their house on the market. If this trend continues, then I think we will still see a strong Real Estate market this year because there are so many motivated buyers who are looking to take advantage of these great rates, but it won't be record setting like it could be.
Areas like central Denver did the best in 2012 and I expect that to continue in 2013. Northwest Denver, specifically the Highlands, Sunnyside, Berkeley and LoHi remain the hottest neighborhoods in all of Denver and I don't see that trend slowing anytime soon. Downtown has really rebounded and while you could have gotten into a really nice one bedroom with views for $200-250,000 two years go, that number has shifted closer to $350,000. Park Hill is seeing another resurgance thanks to it's Highland like qualities and large, beautiful homes. And the suburbs are starting to see improvement as well. I sold homes in Littleton and Arvada last year that sold in a matter of days and those exact homes are selling for 5% more now than when they sold last year.
With interest rates in the mid 3% range, more and more people moving to Denver with higher paying jobs, light rail connecting the city and some of the lowest unemployment in the country, the Denver Real Estate market can only go up. The rental market is still insane with a 2% vacancy rate and many of these would be renters are starting to realize that they can buy for less than they can rent, thus depleting the supply even further.
I am still surprised to hear people say they are waiting for the bottom to hit before they buy. Sorry to be the bearer of bad news, but the bottom is long gone. But as you should be starting to see, it isn't too late. The market is only going to get up so now is the time to act before prices really jump in Denver. If you have been thinking of selling, then stop thinking and just do it. Hate to be blunt, but there are so many buyers out there looking for your home right now you the time has never been better. 2013 will be a fabulous time to buy and sell Real Estate in Denver. If you have even been considering it, now is the time to act so you don't look back this time next year and kick yourself for not acting sooner.
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