There is some good news regarding real estate prices in the Denver Metro area. According to most real estate professionals, prices throughout the Denver market seem to have hit bottom in mid to late 2009. The Denver real estate market did not have the amount of speculation in prices that other markets had in the early 2000's, thus prices have not dropped as much as in other markets throughout the country. While there are still clouds on the real estate horizon, it appears that the worst is behind us.
Real estate investors are saying that they cannot find the great foreclosure deals that they were able to acquire through mid 2009. For example, one investor who specializes in the Northeast Denver/Stapleton area says he could buy houses for $50-55 a square foot last year, but now it is difficult to purchase anything for less than $80 a square foot. The extremely good deals that were available in the foreclosure market at the height of the real estate meltdown appear to be history.
While the era of cheap investment properties seem to be gone, there is still good news for first time home buyers who are looking for a house to call home. Probably because of the low cost of investment properties over the last couple of years, there is currently a glut of houses that have been renovated and are back on the market by investors. There are several completely renovated houses in the Stapleton area in Denver and the Fitzsimmons area in Aurora that are on the market for less than $80 a square foot. With the expiration of the Federal tax credit at the end of April, the competition for starter homes is less than it was earlier this year, so the home buyer now has more leverage when negotiating the purchase price of their home.
Most of the activity in the Denver real estate market has been in homes priced below $250,000. Of course, there are transactions taking place at every level of the market, but there is still an overall feeling of caution throughout the market. The concern over a double dip recession of the economy is very real, and no one is certain how many delinquent mortgages that the banks are carrying on their books. There may be another flood of foreclosures if the economy falters or if banks see this as an opportunity to clear their books of bad mortgages and place more foreclosed homes on the market.
Though there is still the risk of another price dip in the Denver real estate, that risk does appear slight. When you factor in the low interests rates and the increasing risk of inflation in the future; along with the current low prices of houses; this may be the best time to buy a house in Denver for a generation.
