Denver is one of the few parts of the country that has thrived since the Federal Reserve dropped interest rates to record lows seven years ago. As a matter of fact, the Fed’s low rates played well in Colorado’s favor, allowing people to take advantage of the super-low rates to buy and invest in their dream home, especially for a market that didn’t really fall hard when the housing crisis hit.
So then what about the anticipated rate increase we keep hearing about?
According to an article by ABC News, Coloradans aren’t too nervous, especially since most don’t believe Colorado’s economy will suffer from the increase. After all, the rate increases will most likely be slight and gradual. And Colorado’s real estate market still burns pretty bright, with many having taken advantage of the low rates that helped strengthen an already healthy market.
How Did Denver Thrive?
Denver boasts many stats that help show why it has thrived where other markets have not. Its unemployment rate sits at 3.8% compared to the national percentage of 5%. And its Millennial population has a 52% college graduate rate, which is way over the national numbers. Nationally, less than 33% have finished college. And, of course, there’s the ever-popular news about how home prices have increased along with home values in many areas across Metro Denver. So how has Denver thrived? It’s been blessed with an educated population, jobs to cater to those who flock to Denver, and when jobs aren’t there, people make their own! And you have to give credit where credit is due: the legalization of marijuana didn’t hurt Colorado’s economy.
Housing “Hunger Games”?
With rates so low, more and more Coloradans have found that they’re able to buy a home, something that many people across the country are unable to do. Pair that with the influx of people moving to Colorado and you have what the ABC News article quotes as a housing “Hunger Games.” Over the summer of 2015, the competition amongst homebuyers was fierce, causing many people to put in multiple offers on multiple properties before finally coming out on top. The same can be said for the rental sphere, where properties were posted for advertising one day and rented the next.
Don’t Forget the Rentals!
The rush of people moving to Colorado not only helped the seller’s market, but the rental market, too! Rental rates skyrocketed as demand far outweighed the supply, and even drew multiple builders across the nation to set up shop in Colorado. And with the winter slow down, many of those who couldn’t sell during the summer months have decided to rent out their homes rather than risk keeping it vacant for months on end.
Overall, the Fed’s low rates have helped Denver and Colorado do pretty well. It helped homebuyers, investors and landlords come out on top, and make Denver one of the hottest real estate markets in the country.