How Does New Construction Affect Housing Prices?
Denver’s 2019 elections have become a referendum on development, with Mayor Michael Hancock defending his handling of the city’s rapid urban growth. The debate has produced some major questions about development, housing and money. Here are some answers.
Are housing prices slowing down?
Yes. The pace of increases for rent and sale prices has slowed down lately. The median single-family home in March 2019 was about 1 percent more expensive than March 2018, according to data for Denver provided by Matthew Leprino, a spokesperson for the Colorado Association of REALTORS®.
In contrast, housing prices earlier in this decade increased by up to 29 percent in a single year. The fastest increases happened in 2012 and 2015.
However, it’s not clear if prices are trending down yet.
“We’ve still seen some pretty nominal price increases,” Leprino said. The spring and summer months, which often bring sharp price increases, may show the path ahead. Leprino believes the for-sale housing market has “already come over that hump, and we’re starting to descend again.”
Rent hikes in Denver also have decelerated. Rent over the last year has been essentially flat in Denver. In the first quarter of this year, it was about 1.4 percent higher than a year earlier. That’s the smallest year-over-year increase since at least 2012, according to the Denver Metro Area Apartment Vacancy and Rent Report, conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates.
Nicolais credits that to a surge of new apartment buildings. A total of about 24,000 new units came online during the four years from early 2015 to early 2019, he said. By comparison, only about 6,500 were finished in the four years leading up to 2015, when the housing crisis sharply accelerated.
But that’s cold comfort for many residents, Nicolais acknowledged. The median Denver rent in 2019 is more than $1,400, compared to about $800 in 2011.
To read the full article, including more voters’ questions and answers, please visit The Denver Post’s website by clicking here.