Colorado’s real estate market can be challenging for first-time homebuyers, and while it may be tough for first timers to land an affordable home, we can say with some positivity that it’s not the absolute worst place for buying real estate.

According to new research by Moneywise, Colorado ranks fourth on its list of most difficult states for first-time homebuyers — the others in the top 5: Hawaii, California, Washington, and Massachusetts.

The National Association of Realtors estimates the average buyer makes a 13% downpayment. Based on Colorado’s median home price of $560,000, that means a $73,000 downpayment. But even finding houses in that price range is challenging.

According to the April report from the Denver Metro Association of Realtors, inventory in the Denver metro’s “classic market,” defined as properties that sold for between $300,000 to $500,000, remains tight.

In March, metro Denver saw 331 fewer residential listings in that price range vs. March 2022, a 21 percent decline.

“With demand continuing to be strong, the result becomes another classic supply versus demand tug of war,” says DMAR market trends committee member William Maine.

“With low supply and strong demand, the close-price-to-list-price ratio continued to hold firm at 99.7 percent for detached properties and 99.9 percent for attached,” he says.

Lack of starter homes:
Available homes in the starter home price range are rare in the Denver metro. Unfortunately, new builders just don’t construct homes at that price point. While nearly 70% of new homes once were 1,400 square feet or less, now only 8% are that size. The economics of today’s housing market — land costs combined with local rules and regulations — push builders to construct bigger homes that ultimately cost more.

If you can find a way to afford it, real estate is still one of the most solid investments you can make. Relatively steady interest rates coupled with various loan incentives still make now a good time to buy in the Mile High. If you’re ready to explore your options, give Metrowest a shout today!