Foothills Housing Compared to Denver's
Real estate, like politics, is local. Denver’s housing market is much larger than the foothills, by a factor of over 30--meaning there are over 30 times as many homes on the market and over 30 times as many home sales--so Denver is the dog that wags the foothills’ tail. But there ARE differences and it is interesting to see just how.
Condominiums & townhomes constitute around 28% of Denver’s housing inventory, while they make up only around 10% of foothills’ housing. Since most multi-family housing is lower-priced than single family residences, the average price in Denver is understandably lower than ours.
Comparing only Single Family Homes (not condos, townhomes or other multi-family homes), the average selling price in Denver as of last August was $547,159. The average selling price in the foothills was $664,591. Foothills prices are over $100,000 higher than Denver’s, which is part of the reason we don’t have a robust first-time homebuyer market in the foothills.
Housing markets are universally ranked by how home sales compare to home inventory, known as the ‘absorption rate’. Based on the number of months of standing inventory, markets are rated:
Seller favorable, 1-3 months of standing inventory
Balanced, 4-6 month of standing inventory
Buyer favorable, more than 6 months of standing inventory
In both Denver and the foothills, the months of standing inventory stands at 1, indicating a solid seller-favorable market.
The Fed recently announced that it will keep interest rates low for the foreseeable future, so this should grease the wheels of buryer activity in both markets. But with more multi-family properties appealing to buyers seeking more affordable housing, Denver will probably realize more gain from low rates than the foothills, where a significant percentage of home sales don’t involve a mortgage.
Top 10 lists
Denver appeared on ‘top 10 cities’ lists throughout the last decade: top 10 in price appreciation, top 10 hottest destinations, top 10 in salary growth and more. It is now falling off those top 10 lists, which is good. Leading the country in statistics connotes feverish activity, which translates to an unsustainably imbalanced market. As Denver’s market moderates, home values should rise gently upward further & longer. It also gives Denver leaders some breathing room to tackle issues like traffic congestion and homelessness.
Meanwhile, the foothills, representing a close-in alternative to busy city living, should benefit from Denver’s notoriety--and our slower lifestyle should attract more families who can afford the higher prices.
2020 is a just-right porridge year, perhaps not hot enough for sellers who missed the frenzy of the last decade or cool enough for buyers eager for prices to stop rising. But it is a good year for sellers and buyers to find a fair transaction price. There’s a lot to be said for that.