Earlier this year, the Marshall Fire in the Boulder, Colorado area swallowed up over 6200 acres of land and destroyed more than 1000 homes. With another two thousand or so homeowners displaced due to smoke and water damage in their homes, the already taxed Denver housing market is feeling additional stress.
Here are some ways the Marshall Fires have impacted the Denver housing market:
Even Less Inventory
Over the last few years, Denver has been dealing with a steep decline in available inventory in the housing market. At the start of January 2022, the Denver Metro area had only 1,477 active properties on the market, which is 11,175 fewer than normal.
Fewer and fewer homes are going on the market, and those that do are selling faster than ever. Once a home hits the listings, it could sell in a matter of days. Even properties that were once seen as undesirable are now in demand.
The loss of homes in the Marshall fires has put an additional strain on the inventory available in Denver. While there are no figures available, it is certain that some of the over 3000 affected homes were listed for sale when the fires began. The loss of that inventory, plus the additional buyers now looking to replace their homes in the area, is ramping up already fierce competition in the Denver housing market.
Predicted Price Increases
Low inventory and high demand for properties in Denver are driving prices through the roof. The median price of a single-family home sold in January 2022 was $520,000, which is a 16.9% increase year-over-year. With no signs of demand slowing any time soon, trends are predicting that home prices in Denver will continue to rise over the next several years.
Increased Demand for Rental Property
Since buying a home in Denver is becoming increasingly difficult, many are turning to rental properties as a short-term solution to their housing issues. Just as increased demand and short supply in the Denver housing market are driving up prices and property values, the need for more rental properties is causing a drastic rent hike.
While home prices are higher than ever, interest rates remain at some of their lowest levels. A buyer might pay more for a property, but the monthly mortgage payment is still reasonable. Now, the potential buyers who are unable to find property are turning to rentals and paying significantly more for rent than they would for a mortgage payment.
The Better Option
While the Denver housing market is challenging, buying a home versus renting a property is still the better and more affordable option. Interest rates are likely to increase over the next year, which means now is the time to buy. Working with an experienced real estate agent may help expedite your search for property.
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