The average Denver home is worth $22,000 more today than it was a year ago, nearly twice the $12,500 the typical American home gained in value over the same period, market analysts say.
But don’t let the raw numbers fool you. Home values aren’t rising at a mile above sea level any faster than the national average as the country stares down the barrel of a severe lack of homes to buy. Denver’s rate of increase was 6.3 percent compared to the national figure of 6.5 percent, due to Denver’s high median home value, according to the latest market report from real estate information firm Zillow.
Denver’s median value reached $372,800 at the end of October, up from $350,8000 at the end of October 2016. Median values across the U.S. rose $12,500 over the same 12-month period, hitting $203,400 at the end of October, up from $190,900 a year ago.
One area in which Denver is crushing the national average is the decrease in number of homes available for sale, which may be good news for sellers but is not positive for the overall market. Denver’s for-sale inventory fell 23.3 percent October to October, Zillow says. That’s roughly twice the national decrease of 11.7 percent.
There are some markets where the drop in the number of for-sale homes was even more dramatic over that period, particularly in the western part of the country. San Francisco, San Diego, Seattle and Las Vegas all saw their inventories fall by 23. 6 percent or more since last October, the market report says. In tech-mecca San Jose, Calif., inventory fell a whopping 60.4 percent. Median home values there saw a corresponding spike of 12.3 percent, an average $118,200 increase, according to Zillow.
Zillow’s home base of Seattle — also home to every economic development directors’ darling, Amazon — wasn’t far behind techie San Jose when it came to value accrued. Homes there are worth 11.7 percent more today than they were last October, or $48,100 on average, for a median value of $457,700.
Zillow pins the numbers on simple supply and demand. There is too little of the first to keep up with a ton of the latter in a country with unemployment rates under 5 percent.
“We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country,” Zillow chief economist Svenja Gudell said in a news release. “Home values are growing at a historically fast pace, and those potential buyers want to get in the market while they still can. But with homes gaining so much value in just one year, buyers – especially first-time buyers – have to set aside more and more money for a down payment just to keep up with them.”