The Denver metro home market is never short of surprises. But even the experts failed to predict the news this past July, when the average price of a single-family home rose 10% over last year, to a record-breaking $601,862.
The eye-catching statistic appeared in a month when the number of home closings also broke records, rising nearly 7% more than the previous high logged in July 2017.
Amidst a pandemic, when social distancing made walk-throughs and closings a logistical challenge, who would have guessed?
This is positive news for many Denver home sellers and is undoubtedly linked to low interest rates that increase buying power, as well as continued low inventory, which puts upward pressure on prices.
But every story has two sides, and in this case, the flip side is less positive.
Given the rising cost of homes, the gap is widening for low income earners seeking to become homeowners. Unemployment remains high and affordable housing is an ever-present concern.
Thus, Colorado Governor Jared Polis is pushing local communities to suspend or eliminate restrictions on the number of unrelated persons who can live in a single household. The idea is “to enable homeowners to rent or give a room or rooms to those in need of housing,” Polis told the Denver Post.
Next month also brings a ballot measure to increase sales taxes by .25% to fund homelessness relief programs. Dubbed the Homelessness Resolution Tax, the move would raise Denver’s local sales tax rate to 4.56%. (With regional and state sales taxes added in, the effective tax rate would be 8.56%.) The tax is predicted to raise an estimated $40 million per year.
Home markets always bring challenges, but one thing remains consistent: Buyers and sellers need professional help navigating these currents of change.
This fall, buyers will be looking for valuable insight and an edge against continued competition. And sellers will be hoping to take full advantage of the current favorable market.