Brian Morrison shares an investor perspective.

Denver is a top performer in the country according to S&P/Case-Shiller Home price indices and the entry level market (homes in the $200K to $500K range) is extremely competitive.  Why is this the case and how can you benefit from this situation?

Denver has two major factors contributing to the competitive market in the $200k to $500K price point:

1. Developers are not building condominiums in Denver because of the current HOA laws.  Many developers were sued due to the current court binding dispute resolution process, and it has created a moratorium on condo construction.  This creates a dearth of affordable housing in Denver and increases the demand for our current first time home market.

2. Many REITs (Real Estate Investment Trusts) have turned their attention to the Denver market, and they are paying cash above asking prices for homes in the $200K- $500K range to build their portfolio of rental properties.  First time home buyers with little money down cannot compete with the REIT’s cash offers.

One group that can benefit from this is the group that is considering selling their $200-$500k home and moving into a more expensive house.  The $500k to $1M housing market is not affected in the same way as the entry level market and the current interest rates make more expensive houses very affordable with 10% to 20% down payments.  If you are considering an upgrade in your current home (200-500k) and you are moving into the $500k to $1M space, now may be a great time to make that move because if the unique market factors of low interest rates and high demand for entry level homes.