Colorado real estate agents have seen a very hot market for about 4 years now. With homes appreciating in double digits every year. There have been a few different theories on the reason why. If you ask some folks they contribute the booming real estate market on legalization. The timing does sort of match up with the increase. The problem with this theory is many other states have made it legal and haven’t seen the huge increase and influx of people moving in. California is seeing a decrease in population after legalizing. People are flowing out of California at a faster rate than many other states. Since the industry doesn’t actually add that many jobs to the economy it seems like this is an unlikely factor in the increase of home values.
Another and more likely contributor to the booming real estate market would be the oil, gas and fracking industry. Although this is a touchy subject with some people in Colorado and some legislators including the governor this is probably the leading cause of the booming Colorado housing market. Areas in northern Colorado depend on the industry to survive. Even Denver and the Denver Foothills have interest in the oil industry such as offices in Denver Metro Area. Many of the white collar worker live in area like Evergreen and Golden. The entire state is dependent on many aspects of the oil and gas industry.
That is why when the new governor, Jared Polis, started to signal he would not be friendly to the oil industry we started to see home values begin to slow in appreciation. They are still appreciating in every area of the state (although in the 2nd quarter of 2019 we saw Denver contract for the first time in 5 years). They values are just not rising as fast as they have been. Not by a long shot. It is hard to say if the values have just made it to the point they can no longer continue to go up as fast as they have or if the recent political climate is to blame. One thing for sure is there is no shortage of theories that any real estate agent is willing to share.
The average sales price in the Denver Foothills and Evergreen has increased over the last few years. 5 years ago it was under $400K and now it is just above $600K. With that being said you can still find some very nice homes in the area for under $500,000. They tend not to stay on the market very long but they do come around. Buyers that see any real estate for under $500k are very fast to act on it. It usually has just a few days on the market. Buyers are still not just buying anything and everything. They are still smart enough to not be taken advantage of. Perhaps that is why we are seeing so many price reductions. Either sellers are testing the market or real estate agents are giving a false sense of market conditions. It really is not a benefit to either party to over price a home. A home still must appraise by the bank to be funded. If a home is overpriced and does not appraise it can raise all kinds of issues. not only buyers remorse but the bank simply won’t fund the difference and if the buyer doesn’t want to pay the difference at the closing table they might just walk. In that case the home has been off the market for a while and the sellers now know the true value of their home. It is best to not get greedy because a contract is in the favor of the buyer and the buyer has many outs that they can walk and still not give up their earnest money.