Are you thinking of buying an investment property in 2019-2020 but are not sure where? Are you wondering what some of the best places to invest in real estate in 2020 are? Let us tell you right away that the Colorado housing market is one of them.
We at Mashvisor have interviewed our local real estate agent Joe Mivshek, an expert on the Colorado real estate market, in order to provide you with up-to-date data, 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 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 state well. He enjoys working with real estate investors and investment groups to find the highest return and greatest appreciation.
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How did the Colorado housing market perform in 2018-2019?
The State of Colorado is still a very good market, ranked in the top 5 in retirement states, overall population increase, and more. Over the past 5 years real estate appreciation has been 7-11% per year, depending on the areas. Many records have been shattered, such as average home price is now well over $400k, etc. Colorado has the lowest unemployment rate in the country, which is a main driver of the housing market 2019 and an important factor in real estate investing.
What have been the most important real estate trends in Colorado over the past few years?
The Colorado real estate market is still growing in terms of both residential and commercial real estate properties. The unemployment rate in Colorado is the lowest in the country at under 3% compared to a national average of 3.8%. This means that local companies need more people to move here, especially for the higher skilled positions, which means there are as many people buying as there are renting homes.
Which cities did the best in Colorado in 2018-2019?
Colorado mountain towns saw prices rise substantially as more people have moved here from California and Texas. Boulder and Denver are the highest priced areas, with Fort Collins not that far behind. Opportunities can be found especially with Airbnb/VRBO type investments. Colorado Springs, Pueblo, and Grand Junction all continue to grow, and in those areas home prices are lower, but get similar rents.
How does the Colorado housing market look like for 2020?
Interest rates are expected to stay steady through the year, and though prices of Colorado homes for sale have slowed some, no one sees a downturn since the unemployment rate is so low and Colorado is very popular place to live. As a real estate 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 in residential Colorado real estate from last year?
It’s a consistent market though we are seeing prices flatten somewhat. In specific, Denver prices have slowed since they have built up the apartments and condos so much. So the coming 12-18 months will see appreciation, but at a slightly slower rate.
Which property type prevails in 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 investors focus on for rental properties in Colorado?
Every area has advantages and disadvantages. In Boulder and Denver the prices are so high, it’s hard to have any cap rate or cash flow. 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!
What are some specific laws and regulations which real estate investors, landlords, and Airbnb hosts should keep in mind in the Colorado housing market?
Denver and some areas along I25 require licensing for Airbnb. Mountain towns are a little better in terms of short term rentals regulations, but neighborhoods with HOAs frown on Airbnb some throughout Colorado.
Is now the right time to invest in a real estate property in the Colorado housing market? Why?
Appreciation is still expected to be higher over the next 24 months in Colorado than in most areas of the US housing market. Rental income plus appreciation and cash flow. All I can say is buy now since interest rates look to stay low.
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If you are ready to start searching for a traditional or Airbnb investment property in the Colorado housing market in 2020, start your 14-day free trial with Mashvisor now!
