Mile High rents and a condo deficiency
- Given the rapid population growth over recent years, Denver’s rent escalation and affordability have remained among the city’s hottest button issues. Excluding the Pacific Northwest and California, the U.S. Western region’s most expensive ZIP codes are here. They’re led by the neighboring areas of Cherry Creek and Belcaro: the former 80206 measures $2,435 per month, while the latter 80209 shows $2,151 per month. Since last year, Cherry Creek rents have ticked down by 0.7 percent while Beclaro prices have risen 5.2 percent.
- According to a study examining wealth creation and authored by Beracha, Hardin & Johnson, Denver has joined a list of cities where renting and reinvesting will outperform owning and building equity—similar to metros like Atlanta, Minneapolis, Dallas, Portland, and Seattle. Relief may come soon though; a recently signed bill makes it more difficult for HOAs to file construction-defect lawsuits. This follows a decade in which condos fell from a 20.0 percent share of new housing stock to less than 3.0 percent, in no small part attributable to construction-defect lawsuits and subsequent builder trepidation.
- Currently, there’s a dearth of available options priced below $550,000—a significant burden for in-the-market Millennials. The current average list price is $352,734, but the government expects the bill will push it sub-$300,000—a much more attainable price for Denver’s large and growing Millennial cohort.
Source: JLL Research