Still not sure where to buy an investment property in 2018? Have you thought about the Colorado real estate market? If so, you’ve come to the right place. We at Mashvisor have recently interviewed real estate agent Joe Mivshek, an expert on the Colorado real estate market, in order to provide you with his profound knowledge and understanding of the trends and dynamics of Colorado real estate.
Joe Mivshek is a real estate agent at Keller Williams Realty, where he works with a team of 17 very experienced professionals. Joe and his team handle all sizes of real estate projects: from large-scale developments, through vacation homes, to commercial sales. Joe has lived in Colorado for 30 years and knows the area well. He enjoys working with real estate investors and investment groups to find the highest return and greatest appreciation.
How did the Colorado real estate market do in 2017?
Colorado is still a very hot seller’s market. Over the past 3 years appreciation has been 7-11% per year, depending on the areas. Many records have been shattered such as average home price is now over 400k, etc. Colorado has the lowest unemployment rate in the country, which is a main driver of the housing market and an important factor in real estate investing.
What were the most important trends last year?
The Colorado real estate market is still booming in terms of both residential and commercial real estate properties. Colorado gained 70k people in 2017! The unemployment rate in Colorado is the lowest in the country at 3% compared to a national average of 4.1%. That means companies need more people to move here, especially for the higher skilled positions, which means more people buying and not renting homes.
What was the most traded property type in the local housing market last year?
I would say that properties under 400k were most traded. Properties of 500k and up are taking a little more time to sell, but still even for those in the 500-600k range, it’s only 30-40 days on market.
Which cities did the best in Colorado in 2017?
All of Colorado including mountain towns. Boulder and Denver are the highest priced. Opportunities can be found especially with Airbnb/VRBO type investments.
How does the Colorado real estate market look like for 2018?
If interest rates climb slowly, we will switch to an even market (neither a buyer’s market nor a seller’s market) in 18-24 months, but no one sees downturn since the unemployment rate is so low. As an investor I would look for both short term and long term rental options. If an investment is priced high (such as mountain towns), look at the short term/vacation rental market. If you find a home that can be rented long term with a 6% or better cap rate, that is the way to go. You will get long term appreciation on both.
What are the major changes from last year?
There are no significant changes in the Colorado real estate market. It’s a consistent market.
Which property type is dominating the local housing market this year?
It depends on the area. For example, in Fort Collins and the towns along Front Range it is single family homes. In Denver and Boulder, on the other hand, it is condos.
Which cities should real estate investors focus on for residential properties in Colorado?
Every area has advantages and disadvantages. In Boulder the prices are so high it’s hard to have any cap rate. In a place like Greeley, prices are lower but there are lots of low-waged workers such as in natural resources, farming, etc., so you don’t get as much for rent, but since prices are low, return on investment is still good. I have investors who have purchased homes in ski areas/mountains and have done very well in the vacation rental market (Airbnb/VRBO, etc.). You have to watch the rules in each area as some have strict rules, but with summer vacationing increasing each year in the ski towns, it is a win!
Are there any specific laws and regulations which homebuyers, real estate investors, and/or landlords should have in mind when they approach the Colorado real estate market?
Denver and some areas along I25 require licensing for Airbnb. Mountain towns are a little nicer in terms of short term rentals regulations, but neighborhoods with HOA’s frown on Airbnb throughout Colorado.
What interest rates do local mortgage providers offer in the Colorado real estate market?
The mortgage interest rates change daily, but generally speaking interest rates are going up.
Why is now the right time to invest in a real estate property in the Colorado housing market?
Appreciation is still expected to be 7-8% over the next 24 months, so you get rental income plus amazing appreciation. All I can say is buy now since interest rates are going to move up.
Which cities should real estate investors go for?
It’s hard to generalize. I still like to talk to investors, find out their goals, and then decide where to go with investment dollars.
If you are ready to start your search for an investment property in the Colorado real estate market 2018, start up your free 14-day trial with Mashvisor now.