Recently, Auction.com released a report that contains the top single-family housing markets in the country. The report focuses on the 5 strongest housing markets among the 49 largest housing markets in the U.S. Denver tops the list and is followed by San Antonio, Nashville, Fort Lauderdale and Dallas. Denver dominates the list because of its housing price growth of 9.2% and home sales growth of 4.6%.
Factors that influence the housing market
There are several factors that affect the real estate market: demographics, economy and interest rates. (Source: Real Estate Insider) These factors could also affect each other. But this is not as simple as a domino effect.
Here are the factors that could help in evaluating a certain housing market: (Source: Investopedia)
This factor includes the structure of a population in a certain area. It involves the ages of the residents, their genders, median income of residents, population growth, etc. A few changes in demographics can also create an impact in the housing market, particularly in housing demands.
This is the capacity of a particular area when it comes to the production and consumption of commodities. It means that if the economy is slow, there would be restricted money flow. And if money is restricted, the number of people who would consider investing in real estate will be limited. (Source: SFGATE)
This factor is generally affected by politics, banks and overall economy. If the interest rate is high, it could cause lower demands in the housing market. (Source: Economics Help) The strong demand for Denver luxury real estate will likely make the impact of higher rates less impactful than many parts of the United States.
How did Denver make it on the top of the list?
Its population growth
Denver’s population increased more rapidly in the past years relative to the population of other cities (Source: Metro Denver). It was also considered one of the fastest growing cities in the country according to Forbes. This increase in population means that there would be more demand for residential real estate, hence, making it the hottest housing market in the country.
Its growing economy
The expanding economy of Colorado has direct impact to the city of Denver. This is because majority of the businesses in Colorado are located in Metro Denver region. The increase number of businesses and establishments in Metro Denver also helped in boosting its economy. (Source: Metro Denver)
Increase of employment rate
A fast growing economy offers a lot of employment opportunities. In fact, the employment rate in Denver increased by 3.2% in 2014. Many high paying jobs are being added to the metro area and many companies plan to expand their workforces in Denver. This also means that the demand for real estate is likely to increase. According to Huffington Post, unemployment is actually one of the reasons why housing markets decline.