Denver home prices have for years been too high for many middle- and working-class families to consider buying.
That is ringing true as well this year, with the median house price sitting at $633,000, up 5.5% from last year, according to the February Market Trends Report from the Denver Metro Association of Realtors.
On the surface, listing prices for condos look like a better deal for those looking to own.
The median price for units in multifamily properties is up to $410,000, nearly 1.25% higher than this time last year.
The Denver Metro Association of Realtors has declared that condo shoppers are enjoying a buyer's market.
Condos have traditionally been viewed as a great entry point for first-time homebuyers, Libby Levinson-Katz, chair of the Denver Metro Area Realtors Market Trends Committee, told Denverite.
During peak COVID-19 times and since, as safety issues and a fear of living in close quarters trumped the allure of living in walkable communities for many, the Downtown condo market became sluggish. That's bad news for sellers and good news for shoppers.
In certain price points, there are plenty of condos to choose from, and in the luxury market, properties are being listed for upwards of nine months, Levinson-Katz said.
For middle-class people, the good news is that there are currently nearly 1,000 condos priced under $500,000 on the market.
Even so, buyers are hesitating to jump into the market for many reasons.
For starters, condo prices are still out of reach for many working families without additional support, money for massive down payments or loans.
Without that extra help, many will become "cost-burdened," spending more than 30% of their income on rent -- a gamble not everybody's willing to take.
And it's not just the listing price a homebuyer has to consider when counting costs. There are a lot of rising fees driving the price of condo living further out of reach.
Property taxes have increased in Colorado. Meanwhile, even as prices rise, mortgage rates, back also continued to go up. So have home insurance rates. And with insurance companies also raising premiums on homeowners associations, HOA fees have increased, too.
Insurance companies are making homebuying harder across the board.
As wildfires, hurricanes and climate change have increased the chance of natural disasters destroying a home, insurance companies have raised their premiums and in some cases refused to insure properties altogether.
This phenomenon has occurred mostly on the coasts, in states like California and Florida, but Levinson-Katz says the Denver metro area is beginning to experience similar pressures, especially where properties are located in flood plains or areas prone to wildfires.
"Insurance companies are really getting more strict on what they will cover," she said.
In recent years, it wasn't such a big deal for buyers to wait till the last minute to try to secure homeowners insurance. But more recently, companies are rejecting offers or only selling insurance with sky-high premiums, leaving homeowners scrambling for somebody -- anybody -- willing to insure their potential home.
"I'm starting to counsel my buyers that they need to start talking with their insurance provider earlier in the game, so that we don't have insurance issues at the last minute," said Levinson-Katz.
More Coloradans are turning to renting, based on information from the U.S. Census Bureau.
Last year, the state saw a 7% decline in homeownership rates, according to the U.S. Census Bureau. That was the steepest of any state in the country.
In the metro area, rent prices have evened out, decreasing roughly 1% year-over-year, based on data from the rental site Apartment List.
Meanwhile, Denver is on track to break last year's record-high number of eviction court filings.
Denver County Court saw 2,888 filings in January and February of 2024, a nearly 30% increase from the first two months of 2023.
In short, renting or homebuying is expensive, but for those looking, there is a glut of homes on the market.
Going into February, there are 5,511 homes available, up nearly 46% from this time last year. Yet the homes listed are being sold faster than they were in February 2023, staying on the market for a median of 23 days.
The people successfully selling homes are doing what they can to stage them correctly.
"Sellers who have been winning in this market spent time making sure their homes are in show-ready condition," Levinson-Katz wrote in the report. "Clutter has been removed, HVAC systems have been serviced, windows have been washed and sewer lines have been cleaned."
