The increased cost of living in the U.S. is a growing trend among the bigger cities, as the large influx of population has led to increased prices of products and homes. The high cost of living and housing is not a new trend in Denver, as the rate of listing prices for homes has been increasing since 2012. In recent years, the rising population and increased interest rates add to such high costs of buying homes, reducing the quantity demanded for such high prices. While in recent months the prices of homes have been increasing at a slower rate, homes still aren’t selling and the supply of homes is not increasing as predicted. Due to sellers being forced to lower the listing prices to increase the chances of buyers taking their offers, prices are expected to decrease in order to balance the gap between buyers and sellers on the market.
Despite the rate of prices decreasing in the Denver housing market, the overall cost of housing is still high. Zillow Real Estate, an online marketplace for housing, listed the average price of housing in Denver to be at $414,500, almost $200,000 higher than the national average price of homes. These high prices are largely believed to be a result of a heavy increase in population in Denver. Since 2010, over 300,000 residents have moved to Denver, as the homes are not able to be constructed as fast as the population is increasing. Along with such high prices, the middle and lower classes of Denver are unable to afford such homes; Attom Data Solutions found that the income needed to purchase a home in Denver is about $177,000, while the average income in the city is about $68,000.
In response to the high prices, buyers are simply refusing to purchase homes at those prices. Sales have dropped by 1.5 percent since last year, proving that in order for homes to be sold, selling prices must go down. Such a decrease in sales will eventually cause housing prices to decrease, which economists expect will restore a balancing between buyers and sellers in the housing markets.
Overall, despite buyers having struggled to find reasonably priced homes in recent years, buyers can expect sellers to drop listing prices in the future. The median listing prices of homes in Denver is still higher than the national average, but the housing market is showing signs of restoring balance as sellers have more pressure to lower their prices and expectations as sales have dropped.
