Thanksgiving may have come and gone, but if you are a Denver homeowner, you still have plenty to be thankful for. At the end of last month, the average price of a single-family home sold in the Denver area topped $440,000, the highest any October has ever seen. Home prices are almost 10 percent higher than they were a year ago, according to the most recent report by the Denver Metro Association of Realtors. Home prices were even up slightly from September, which is unusual, as they normally dip on a month-to-month basis this time of year for seasonal reasons.
So, what is driving these rising prices? Mortgage rates are partially to blame, which are still hovering at near-record lows at around 3.5 percent for a 30-year mortgage. No one knows if mortgage rates will rise, if the Federal Reserve raises its interest rates in December, as is widely anticipated. But there’s no denying that you can lock-in record-low rates today.
The low supply of homes is another factor driving up home prices.
Last month, there were only 6,731 active listings on the market, an all-time low for this time of year. To put that into perspective, 10 years ago there were almost 30,000 homes on the market. In October, there was only a 1.7-month supply of homes on the market. A year ago, the months-of-inventory was almost 9 percent higher.
There is an especially low supply of homes for homes priced below $400,000.
You will have the most options if you are in the market for a home priced at $1 million or more. In that case, there is almost a 10-month supply of homes. But even the luxury market is tighter than it was a year ago. In October 2015, there was almost a 1-year supply of unsold homes priced at $1 million or more.
Denver also is one of the fastest growing cities in the nation and many of the people moving here want to eventually own a home. Forbes Magazine, in fact, last month ranked Denver No. 1 Best Place for Business and Careers in 2016. Denver is especially attractive to tech savvy Millennials, many of whom want to eventually buy a home and put roots down here. That bodes well for increased home appreciation in the medium- and long-term. That is something to be thankful for, whether you own a home or plan to buy one.