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Pro Teck’s Home Value Forecast: Denver Dealing with the Impact of Limited Housing Inventory

Recent actions, including construction-defects reform and affordable housing initiative, aim to spur housing development at the lower end of the market

June 27, 2017, WALTHAM, Mass. — This month’s Pro Teck Valuation Services Home Value Forecast takes an in-depth look at notable real estate trends in Denver, Colorado.

Pro Teck’s analysis of Denver’s market shows that a booming jobs market and higher wages are contributing to increased home prices and reduced inventory.

“Employment levels have been a statistical factor closely correlated to home prices, and in Denver the correlation is readily apparent,” said Tom O’Grady, CEO of Pro Teck Valuation Services.

“Unemployment in Denver is close to historic lows at 2.82 percent,” said O’Grady. “If you look at Q4 in 2000, the last time unemployment was around 3 percent, employment was at 1,225,000; today it’s at 1,445,000, a 19 percent increase. Median household income has gone up 36 percent during the same time period. More people working at higher wages has led to home price increases.”

O’Grady said home prices on a cost-per-square-foot basis have taken off, now averaging over $300 per square foot — meaning an average 2,000-square-foot home now exceeds $600,000.

“And as we’ve seen in other markets, there are few houses to be had, with Months of Remaining Inventory at 2.23 overall, and even less at the lower end of the market,” said O’Grady. “Adding to the issue at the bottom of the market, condo development has dropped from 20 percent to 3 percent of housing starts over the last 10 years.”

The report also examines Denver’s home price affordability, litigation issues surrounding condo development and recent state legislative action intended to spur affordable housing options.

Click here to read the entire forecast, including data and graphs that further highlight market trends discussed in this release.

CBSA Winners and Losers

Each month, Home Value Forecast uses a number of leading real estate market-based indicators to rank the single-family home markets in the top 200 CBSAs and highlight the strongest and weakest metros.

Top 10 CBSAs this month include:

  • Bremerton-Silverdale, WA
  • Las Vegas-Henderson-Paradise, NV
  • Richmond, VA
  • Colorado Springs, CO
  • Denver-Aurora-Lakewood, CO
  • Boise City, ID
  • San Francisco-Redwood City-South San Francisco, CA
  • San Jose-Sunnyvale-Santa Clara, CA
  • Seattle-Bellevue-Everett, WA
  • Sacramento–Roseville–Arden-Arcade, CA

The Las Vegas market real estate appears to be on the mend, with positive trends that include foreclosures as a percent of sales under 10 percent. However, while data reveals that single-family home prices are definitely rebounding, average Vegas sale prices are still approximately $80,000 below pre-crash (2007) levels.

Bottom 10 CBSAs this month include:

  • Albany-Schenectady-Troy, NY
  • Chicago-Naperville-Arlington, IL
  • Lake County-Kenosha County, IL-WI
  • Miami-Miami Beach-Kendall, FL
  • Killeen-Temple, TX
  • Shreveport-Bossier City, LA
  • Virginia Beach-Norfolk-Newport News, VA-NC
  • Peoria, IL
  • Jackson, MI
  • Atlantic City-Hammonton, NJ

Miami saw its foreclosures as a percent of sales drop by more than 21 percent, to 11.47 percent. With foreclosures accounting for increasingly fewer sales, we see a brighter future for single-family home sales in Miami.

About Home Value Forecast

Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market and delivers 14 market snapshot graphs from the top 30 CBSAs.

HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service. To learn more about Home Value Forecast and Pro Teck’s full suite of residential real estate valuation products, visit www.proteckservices.com. You can also find Pro Teck on Twitter at @ProTeckServices.

Reporters interested in national, regional or metro level housing data tailored to meet story needs, please email your inquiry to mediarequest@protk.com.

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Media Contact: Thomas Hoff, Pro Teck Valuation Services
781-314-1669 or tom.hoff@protk.com