May marked another record-breaking month for Denver’s housing market, with home prices reaching new highs and active listings of inventory reaching new lows for the month of May.
According to the latest REcolorado report, there were 6,909 active listings for both single-family homes and condos, a 17% drop from May of 2014. While active listings of single-family homes increased 11% in May over April, inventory remains exceedingly tight.
The short supply continues to fuel rising home prices. The average home price reached $416,495 in May — a 4% increase over April and a 12% increase over May of 2014. Despite the high price tags, those homes sold with lightning speed. The average number of days single-family homes spent on the market was 23, down from 28 in April. Condos sold even faster, spending an average of 15 days on the market, vs.16 in April.
“Colorado continues to see strong economic, employment, and population growth, which is bringing consumers to the market ready to buy newly-listed homes before the supply is replenished,” Kirby Slunaker, president and CEO of REcolorado, Colorado’s largest MLS, told Inside Real Estate News.
“While spring is traditionally the setting for a strong market, low housing supply and growing sales are the key drivers behind our short sales cycle and rising home prices,” he added.
Another factor, according to a recent CNN Money article, just might be Colorado’s burgeoning pot industry. The article credits the state’s marijuana-friendly laws for fueling a population rise that is causing double-digit increases in home prices and the bidding wars that have become common in the area.
“The pot industry is creating jobs we didn’t have before,” one real estate agent veteran told CNN Money. “It’s brand new, it adds a whole new factor to the area; you have real estate needs, housing needs, job needs.”
While real estate brokers have noticed this trend, numbers are hard to track since those moving here for the marijuana industry aren’t quick to admit it. “A lot of them try to hide it,” a Denver real estate agent told CNN Money. “They don’t necessarily say they are coming out to be part of the marijuana industry.”
If pot is, in fact, bringing more people to the state, frustrated home buyers can only hope other states follow Colorado’s lead and legalize marijuana. As one realtor told CNN: “We are going to continue to see an increase in population growth based on marijuana until other states start picking up recreational laws.”
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