The housing market in Colorado is a peculiar one that is faces unique challenges, in the coming years. Based on online real estate prices, the entire housing market in Colorado has been surging in price. This is great news for individuals who already own homes in Colorado, but presents other challenges that could harm the state, down the road, if they aren’t addressed. Here is some information about the current state of the housing market in Colorado…
3 Colorado cities rank in the top 20 of cost and appreciation
As of early 2016, Colorado was home to three of the top 20 cities in the country for home value and growing costs of housing. These cities include Denver, which was ranked 3rd, Colorado Springs, which was ranked 11th, and Boulder, which was ranked 18th (Boulder also ranks in the top 1% most expensive housing in the country). This makes Colorado the second most represented state in the top 20 list, being surpassed only by California.
High costs of living are making it hard for first-time house buyers
While the climbing housing market in Colorado has been terrific certain aspects of the market, it has also created an issue for younger families and first time homebuyers, who have been leaving Colorado to start careers in cities with lower costs of living. Anytime there is a surge of outgoing migration of younger professional, it presents a long-term problem for a state’s economic strength. However, John Hickenlooper, the governor of Colorado, has spoken several times about this issue, and has made solving it a high priority for his administration.
Colorado has low rate of foreclosure
One great sign of strength for Colorado’s housing market is the remarkably low rate of foreclosures that occur in the state. The national average of foreclosures is 3.1 foreclosures for every 10,000 homes. In Colorado, it is nearly a third of that size, with only 1.1 foreclosures for every 10,000 homes. In most housing markets, this is a sign of terrific market strength, but has also has potentially contributed to climbing home values.
Housing price increases are being matched by incomes
It must be noted that growing housing prices is not a conventionally bad thing. In fact, it can be very good news for the housing market in a state. However, what offsets the potential short-term benefits for Colorado is the prospect that incomes have not climbed at the same rate as housing prices. For example, housing prices have seen gains as high as 10% in some places in the state over the past year, while average wages have only climbed 1%, over that same period.