01 Ene Home Value Trends in Colorado
The real estate market is crashing! Home value averages are diving, the housing bubble’s bursting and the sky is falling! Sound familiar? You’ve probably heard similar gloomy prediction on the state of America’s 2007 real estate market. The truth is, the market’s not as bad as it sounds, but generalizing it on a national level does tend to make it look pretty bad. When it comes down to it, if you’re buying or selling a home, knowing how national home value averages are doing won’t help you (but if you’re curious, in 2006 the national home value average was about $221,900). You want to focus more on the specific area you’re thinking of selling or buying into to get an idea of how the market’s doing and how it may do in the future. Real estate is an investment, so you want to make sure your investment will grow over time. By taking a look at an area’s economy, employment and growth opportunities as well as the attractions it has to others is the best way to get an idea of the market in the area and what home value prices will be doing over the next few years.
Colorado (capital city of Denver) has, in recent years, has had a steady market, though it did not reach record home value numbers as did other parts of the country. Though a spacious state, Colorado has a hefty population of 4,753,377, many of which are concentrated in major cities. Colorado’s spacious plains are great for it’s agricultural economy and for raising cattle, wheat, dairy products, corn and hay. It’s industry services include producing scientific instruments, chemical products, gold and other mining and tourism. Colorado also has tons of tourist attractions, and all these things are a good indication of a steady real estate market and rising home value averages.
When looking for something to do in Colorado, several things come to mind: visiting the culture and nightlife of Denver, hiking the Rockies, rafting on the Colorado River and hitting the slopes in Aspen. Of course, that’s not all there is to Colorado: all over the state are scenic bypasses, national parks, hot springs, wineries, hiking, fishing, boating, biking, etc. The Rockies provide the perfect backdrop for the avid adventurer. Of course, Colorado is also rich in historical sites as well, as one of the first sites of the gold and silver rush and a popular place for early pioneers to settle. The northeast region alone hosts well over 150 fairs, rodeos, tournaments and old-time celebrations from April to October. Colorado mixes that Old West “take things slow” feeling with the more “life in the fast lane” of east and west coast states.
Colorado has also seen large employment growth in 2006 and as of April 2007 the unemployment rate was down to 3.5%. The employment gains were seen in professional and business services as well as leisure & hospitality; education & health services; government, trade, transportation & utilities; and natural resource sectors. The median household income for Colorado is about $50,500 while the median home value at this point is about $255,000. As with most of the country, the household incomes do not rise quite as fast as home value prices do.
While the rest of the country experienced a booming real estate market over the past few years, Colorado’s was more modest then most. Between 2001 and 2006 the average American home value rose 55.21% while Colorado’s average home value rose only about 22.24%, according to the Office of Federal Housing Enterprise Oversight. Home value medians in 2006 in Colorado varied from area to area. For example, Denver saw a small (less than 1%) dip in it’s average home value, while the median Boulder home value rose almost 4% and the median Colorado Springs home value rose almost 5%.
Colorado’s more modest home value appreciation and market have allowed them to avoid the decline in home value that others have in 2007, while the rest of the nation’s real estate bubble continues to level out. As long as Colorado’s economy continues to grow and maintain itself, Colorado can continue to expect modest home value appreciation over the next year, even as previously “hot” markets suffers declines.