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Whether you are interested in buying or selling a home in Colorado, these five trends are likely to impact the Colorado real estate market in 2015.

1. Home prices keep going up.

Across the state, home prices continue to rise. Nowhere is the trend more apparent than Metro Denver, where home prices have risen steadily since 2008, reaching an all time high in 2013. Median home prices in Denver surpassed $300,000 for the first time in 2014, and they are expected to hit $325,000 in 2015.

What it means for the Colorado real estate market

  • Multi-generational households, those with adult siblings, adult children, parents and/or grandparents, are on the rise, citing cost savings as a primary reason.
  • Millennials (people born between 1980 and 2000) are putting off buying their first home longer. In a nationwide survey, of the 20 percent of Millennial buyers who took longer to save for a down payment, 56 percent said student loan debt was the biggest obstacle.

2. Inventory remains low.

In January 2015, the Denver home market had just one month of inventory. There were just 4,300 homes on the market (in Metro Denver) in December 2014—down 45 percent from a year earlier.

What it means for the Colorado real estate market

  • The lower than average inventory accentuates the price surge, with small homes (under 2,300 square feet) going at or above asking price.

  • There is growing interest in condos, which is spurring the multifamily construction boom. The Denver condo market outperformed the housing market in 2014, a rare occurrence.

3. The Colorado population is getting younger… and older.

Elizabeth Garner, an expert on Colorado economic and demographic trends, says Colorado’s population is "getting older and younger at the same time.”

Colorado has always attracted young people who first began moving to the state in the 1970s, and that population of Baby Boomers is aging. The 65+ population is increasing four times as fast as the general population.

Meanwhile, Millennials are arriving in droves, as evidenced by the myriad breweries, co-work spaces and changing urban neighborhoods.

What it means for the Colorado real estate market

  • Millennials are more likely to purchase real estate in urban areas or city centers—19 percent, compared with only 12 percent of older adults. This could potentially intensify demand and boost home prices in those places.

  • Older Baby Boomers are more likely to purchase homes in suburban areas, or near their adult children.

4. We are seeing a renaissance in the industrial real estate sector.

Chief economist for the Metro Denver Economic Development Corp., Patty Silverstein, says that low vacancy rates and construction in industrial areas are only due in part to the expansion of marijuana grow operations.

This resurgence can also be attributed to the increasing popularity of co-work spaces among Millennials. These shared office spaces are popping up in formerly industrial areas, like the Riverfront North district (RiNo) of Denver. The conversion of vacant or rundown buildings into work spaces in that area has triggered the entry of new businesses, like Dinner Lab, a social dining experiment and The Source, a collective of food artisans and retailers.

What it means for the Colorado real estate market

  • Formerly desolate, industrial areas could see a spike in development and new types of businesses, restaurants and art spaces.

  • Young adults, who work and play in these new spaces, will likely be interested in buying real estate and settling in these areas that were previously not considered for residential use.

5. Urbanization swings across the state.

A national trend toward creating denser, more urban and walkable communities, urbanization can be observed throughout the Denver Metro area and beyond.

A prime example is the RTD FasTracks Program, a transit expansion plan to build miles commuter and light rail, add bus lines and improve bus service making it easier to access public transportation across an eight-county district.

This project will likely benefit the overall Colorado real estate market, by making cities further from downtown Denver more accessible for commuters and increasing property values in the areas surrounding the new tracks and stations.

What it means for the Colorado real estate market

  • Property values in suburban cities and smaller towns will likely increase, as they become transportation hubs.

  • Areas near the new tracks and stations will see more construction and the arrival of new businesses. Take a look at the FasTracks program schedule to learn about the areas that will be affected.

With all the changes in the Colorado real estate market, it’s never been more important to be represented by a licensed real estate agent in the purchase or sale of your home. COListings is a great place to search for homes for sale in Colorado and gather information on buying or selling a home.

When you’re ready to take the next step, we hope you contact us. We will connect you with one of our real estate agents who will help you navigate the ever-changing landscape of Colorado residential real estate.

Sources: Denver Business Journal, Colorado Association Of Realtors, Inside Real Estate News, National Association of Realtors Generational Trends Study is a Colorado Real Estate Search Engine and home of the best Colorado Realtors® in the state. If you are ready to buy or sell a home in Colorado then you are in the right place.

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