People want to be close to the city, but the reality is that development up and down the Front Range is pushing east.
One of the reasons for that is a lifestyle change among homebuyers. Some of the things that we talk to buyers about is “you drive till you qualify.” That’s why some of these new developments, 15 or 20 miles east of Denver International Airport, are going to be the future of the city.
The new commute
We’re having conversations with buyers who say they’re working in Denver but only plan on going into the office three days a week instead of five. Those buyers truly need actual home office space, not just a room with a computer.
Another critical factor for those buyers is the availability of voice, video and data in new developments. If buyers are going to work from home two to three days a week, that homebuyer absolutely has to have voice, video and data solutions. Flexible work times also give homebuyers more options when choosing a new home, something we’re starting to see a little bit more of among our customers.
The other challenge for buyers is that our public transportation system is just not set up to serve commuters. If you live downtown but go to the Tech Center, there are hardly any stops where the workers are. It’s not convenient.
Follow the buyers
As would-be Denverites look elsewhere, we’re starting to see a lot of attention on homes in Weld County cities like Erie, Firestone, Frederick and Johnstown. South of Denver, buyers are interested in areas like Castle Rock, Monument and South Parker in Elbert County.
Part of the appeal of those areas is that at the time the land was acquired, it was affordable, which equals more affordable housing. Buyers can find options in those areas in the high $300,000s or low $400,000s—turnkey with upgrades—while the average in Denver is $562,000 for a home that needs to be renovated.
A lot of people have also opted for homes in Northern Colorado Springs, where they can often get to the Tech Center just as quickly as if they lived in the suburbs anywhere in Denver.
We’re in a unique position because our housing prices are down 11% or so. Inventory is up 21% on single-family homes and 62% for condos, as of the end of March. Part of that new inventory is because sellers have opted for a new build that is now wrapping up and they need to sell their current home. Others are leaving Denver and Colorado altogether.
The positive thing for buyers is that interest rates have remained at historically low rates, which helps people afford more home.