We’ve all heard the phrase, that’s ancient history. And it’s true that forging forward often proves the wisest course of action. But, when it comes to residential real estate, studying historical data offers much perspective and many clues as to the future of the market. Denver real estate price history is a valuable tool in any buyer, seller, or investor’s pocket.
Denver Condo Prices
The Denver real estate price history follows a typical pattern for condos. From the mid seventies to the mid eighties, attached home prices almost tripled. Several years later, prices fell as we entered nineties. A 17 year upturn followed, with condo and townhome prices in Denver more than tripled! Of course, the great recession approached in 2008, causing attached home values (along with the rest of Denver real estate) to descend drastically. For the last seven years, however, home values – including attached homes – experienced (and continue to experience) a steady rise. The rise and fall seen here can be applied to any point in time – residential real estate values will turn down, shoot up, then do it all again.
Denver Rental Prices
By comparing rent prices and income over time, rental affordability becomes clear. In the 1980’s, rent prices were very unaffordable, with over 30% of per capita income going toward the average residential rent. This percent bounced around over the next 30 years, finally dropping to historical lows during the great recession; in 2011, only 19% of income went toward rent! Currently, rents have increased drastically, outpacing income. However, the 26% of rent to income ratio is quite close to Denver’s historical average.
Historical Income Property Values
How much has each unit in a duplex been worth historically? In 2008, each unit was worth about $120,000. During the recession prices plummeted to about $75,000 per unit. Multiplexes performed much the same with prices nearly halving during the recession. Over time, things recovered – just as they always do in the real estate market. Currently, a single unit in a duplex is worth over $220,000! Just like any other industry, prices will continue to increase, then decrease, then increase again.
Home Price Increases Across the Country
The US’s west coast, and central Western states experienced very healthy average home price increases, exceeding the historical average of around 6%. Oklahoma, Ohio and Wyoming experienced less appreciation (below 2%), which is likely due to the pullback in the oil and shale industries.The East Coast represents a mixed bag of increase percentages. Overall, the country as a whole is several years into the recovery. Multiple states, much like Denver, have surpassed their previous highs!
The Lesson of Denver Real Estate Price History
Denver real estate price history paints a clear picture of the housing market. What can you expect for the future of our market? A continued rise (as current data indicates strength for another couple of years) followed by a downturn. But have no fear – those “ancient” historical trends show that prices will rise again.