In early 2014, after passing my Real Estate boards, I decided to hang my license with a flat-fee brokerage in town that was quickly gaining a reputation in and out of the Real Estate community as making waves. In my 6-month tenure with the company, I received a crash-course in modern Real Estate practices, assisting with over 150 contracts. In this time, I was able to witness first-hand the beginning of a fundamental shift in traditional Real Estate.
While I’m not a proponent of the flat-fee model, (which is a story for another time), competition is a sign of a healthy market in any industry, and every day we see more and more competition flood the Real Estate market, on all ends. Investors continue to invest, transplants continue to move to the Mile High City,and inventory is starting to rise which allows our market to continue to thrive. But some think we are facing another bubble in the not-so-distant future. If you’re selling or buying a home or condo in the Denver area, ignore the hype and look at market realities.
We’re constantly reminded of the familiar frustrations of home prices reaching record highs and inventory hitting record lows. We’ve heard these concerns, yet the Denver area market seems as hot as ever. How can homebuyers navigate these mixed messages? How can sellers know when to sell? How can investors recognize a good deal? What are some of the shifts we’ll see as we continue to turn new technology and heightened competition into the mix?
Here are my 3 predictions of the Denver Real Estate Market to come.
Mobile use will reshape the landscape of Real Estate, already transformed by technology.
Just like Uber Technologies changed the transportation industry and Airbnb shook up the hospitality industry, advances in technology will change the way we currently see Real Estate. Apps like ZipTour want to revolutionize the industry by providing on-demand access to listings you want to see, right when you want to see them. In a day and age of instant gratification, apps like these will excel, pairing ready homebuyers with licensed agents in a matter of minutes. Smartphones are the new “for sale” signs, where more homebuyers search for new homes online.
Millenials are also now transitioning from renters to first-time homebuyers, and they typically begin the search on their smartphones. According to the Downtown Denver Partnership we are continuing to welcome a multitude of companies to the Downtown landscape, bringing with them a number of jobs. With more higher-paying jobs, more Millenials will enter the market and begin their searches on their phones or online.
Technology has given control to the end user, providing an extremely personalized experience. Home searching apps learn patterns, save preferences, and truly tailor the experience to individual needs. They also allow on-demand access 24/7 and alerts in real time when a new home matches a search criteria. Apps empower the consumer and will continue to better connect in unprecedented ways.
Affordability will continue to decline, leading to greater innovation from developers.
Housing affordability has seen a continuous decline. Supply continues to stay low and demand remains high. More and more, we’re seeing developers cater to a broader demographic by bringing to the table strategic innovation, such as microhousing developments. These micro-units create an opportunity for renters to get a hip, desirable location at a more obtainable price than they otherwise might have. Many of these 300-400 square foot units run under $1200 per month, which, in today’s Downtown marketplace, is hard to come by. These developments will render a larger urban density in the Metro Denver area.
Smaller, more obtainable development will forge the market.
Neighborhoods that have until today remained untapped, are gentrification-wary, and rightfully so. Globeville and Elyria-Swansea are perfect examples of this, neighborhoods rich in cultural and historical significance on the front line of a major shift. Tied by two chief elements, industry and immigration, these neighborhoods initially attracted immigrant workers from Europe in the early 1900’s. The landscape has changed as jobs have transitioned and the mousetrap of I-25/I-70 intersection divides the communities. Many of these homes are past their life expectancy, streets are in dire need of city improvement, and the neighborhood is heavy with freight rail. Even with these obstacles, city officials are optimistic of a brighter future for the neighborhood.
Given the current conditions of the neighborhood, I don’t foresee these neighborhoods transitioning into a future Highlands or Berkeley, where rooted families have been pushed out. Rather, I’m optimistic that a happy balance of reclaiming the historical, cultural integrity and providing newer housing options will come into play. One idea is developing smaller, denser, more obtainable housing, allowing Buyer’s to enter the market close to Downtown at a lower price point that previously wasn’t available. Much like the apartment micro-unit wave we’re starting to see, I predict microhousing will enter the single family and attached home market.
Want to sell your home, buy a home, rent a home, or invest in the market, feel comfortable in doing so as it’s never been a better time. While the landscape might change on the horizon, we still have a lot of opportunity ahead.
If you’re looking to sell, buy, rent, or invest, don’t hesitate to reach out!