Last summer, Mashvisor reported on the Colorado housing market amidst the COVID-19 pandemic. At the time, it seemed the Centennial State had weathered the market slowdown early in the year and Colorado real estate investors were managing to earn a good rental income, despite the coronavirus and the federal eviction ban.
Fast forward to 2021, and a COVID-19 vaccine has been introduced into the picture. To date, over 6% of the population of Colorado has at least received the first shot of the vaccine. And so now we look forward to the post-COVID-19 world to make our Colorado housing market predictions for 2021.
6 Colorado Housing Market Predictions for 2021
#1. People Will Continue to Move to Colorado
While other markets may continue to lose residents due to high prices and the newly found flexibility that comes with remote work, the Colorado housing market will continue to welcome people. Although prices are generally expensive across the state, there are specific areas that have become more attractive since the start of the pandemic. These include the exurbs and mountain real estate markets.
Exurbs are areas that are similar to suburbs but happen to be closer to large urban cities. One of the fastest-growing exurbs over the last decade is Douglas County, according to a recent study.
Colorado’s mountain real estate markets have also seen a rise in prices and a drop in inventory, thanks to the soaring demand during COVID-19.
As long as people continue to move to the Colorado housing market in 2021, the demand for homes for sale is likely to remain high.
#2. Colorado Home Prices Will Continue Rising
Historically, Colorado real estate has continued to appreciate. Even during the pandemic, Colorado home values were on the rise. From Q3 2019 to Q3 2020, local properties appreciated by a total of 4.6%, recording an annual average real estate appreciation rate of 4.6%.
The latest data from the Colorado Association of Realtors (CAR) for December 2020 shows that the median sales price was up 10.4% year over year (YoY). This leads us to the Colorado real estate market forecast that prices will continue to rise. As CAR reports, it’s simply a case of high demand and low supply. As these market trends are expected to continue into 2021, it’s safe to say Colorado home prices will keep increasing.
#3. The Colorado Housing Market 2021 Will Be a Seller’s Market
If you were searching for a buyer’s market in the US housing market 2021, you may not find it in Colorado. Rising home prices are one sign of a hot seller’s market. But the Colorado housing market checked even more boxes as we entered 2021.
According to the aforementioned CAR report:
- The inventory of active listings was down 57.1% in December.
- The months of supply was at a mere 0.8.
- Days on market dropped nearly 25% to 43.
All of this data points to the fact that the Colorado housing market is and will continue to be a seller’s market in 2021.
#4. The Colorado Housing Market Won’t Crash in 2021
The start of the coronavirus had a lot of people wondering “Will the housing market crash in Colorado?” But 2020 came and went and the Colorado housing market stood strong and even reached record numbers across different real estate metrics.
Now, at the start of 2021, rest assured that there are no signs of a Colorado housing market crash. While prices are rising, so is demand. And the housing inventory actually went up last year in many local real estate markets across the state – buyers just happened to snatch it up quickly. Generally, experts agree that 2021 will continue on this same path of high demand and low supply, keeping any chances of a full-blown market crash very low.
Related: Will the US Housing Market Crash in 2021?
#5. A Colorado Real Estate Investment Will Continue to Earn a Good Return
Looking at the latest Mashvisor data on the state, Colorado rental properties will continue to generate revenue for their real estate investors. Here’s how these investment properties are performing right now, on average:
- Median Property Price: $688,643
- Price per Square Foot: $371
- Price to Rent Ratio: 30
- Monthly Traditional Rental Income: $1,909
- Traditional Cash on Cash Return: 2.3%
- Average Airbnb Daily Rate: $219
- Monthly Airbnb Rental Income: $2,966
- Airbnb Cash on Cash Return: 3.0%
- Airbnb Occupancy Rate: 60%
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#6. These Will Be the Best Cities in Colorado for Real Estate Investing in 2021
Based on Mashvisor’s Colorado real estate market data, these are the top cities where investors can earn the highest cash on cash return in 2021.
Note: Although we’ve included Mashvisor’s Airbnb data for each city to provide complete insights here, running a non-owner-occupied short-term rental in some of these cities is not legal. In the Aurora and Denver real estate markets, for example, the Airbnb rental must be the host’s primary residence. So be sure to read up on Airbnb Colorado laws before investing in short-term rental properties anywhere in the state.
#1. The Aurora Real Estate Market
- Median Property Price: $369,467
- Price per Square Foot: $225
- Price to Rent Ratio: 17
- Monthly Traditional Rental Income: $1,811
- Traditional Cash on Cash Return: 3.3%
- Average Airbnb Daily Rate: $120
- Monthly Airbnb Rental Income: $2,456
- Airbnb Cash on Cash Return: 4.0%
- Airbnb Occupancy Rate: 70%
- Top Aurora Investment Property for Sale
#2. The Colorado Springs Real Estate Market
- Median Property Price: $470,228
- Price per Square Foot: $209
- Price to Rent Ratio: 24
- Monthly Traditional Rental Income: $1,618
- Traditional Cash on Cash Return: 2.8%
- Average Airbnb Daily Rate: $140
- Monthly Airbnb Rental Income: $2,730
- Airbnb Cash on Cash Return: 4.3%
- Airbnb Occupancy Rate: 62%
- Top Colorado Springs Investment Property for Sale
Related: Is the Colorado Springs Real Estate Market a Good Place to Invest?
#3. The Denver Real Estate Market
- Median Property Price: $501,606
- Price per Square Foot: $361
- Price to Rent Ratio: 22
- Monthly Traditional Rental Income: $1,908
- Traditional Cash on Cash Return: 2.7%
- Average Airbnb Daily Rate: $177
- Monthly Airbnb Rental Income: $2,500
- Airbnb Cash on Cash Return: 2.3%
- Airbnb Occupancy Rate: 64%
- Top Denver Investment Property for Sale
Did you know? The Denver real estate market was named one of the hottest markets for 2021 by Zillow. Want to start your search for a Denver investment property for sale? Visit Mashvisor now to view top-performing properties in this market.
#4. The Longmont Real Estate Market
- Median Property Price: $654,700
- Price per Square Foot: $276
- Price to Rent Ratio: 28
- Monthly Traditional Rental Income: $1,979
- Traditional Cash on Cash Return: 2.3%
- Average Airbnb Daily Rate: $96
- Monthly Airbnb Rental Income: $2,895
- Airbnb Cash on Cash Return: 2.6%
- Airbnb Occupancy Rate: 68%
- Top Longmont Investment Property for Sale
#5. The Fort Collins Real Estate Market
- Median Property Price: $512,917
- Price per Square Foot: $233
- Price to Rent Ratio: 23
- Monthly Traditional Rental Income: $1,870
- Traditional Cash on Cash Return: 2.3%
- Average Airbnb Daily Rate: $170
- Monthly Airbnb Rental Income: $3,217
- Airbnb Cash on Cash Return: 3.8%
- Airbnb Occupancy Rate: 69%
- Top Fort Collins Investment Property for Sale
#6. The Boulder Real Estate Market
- Median Property Price: $1,139,514
- Price per Square Foot: $551
- Price to Rent Ratio: 39
- Monthly Traditional Rental Income: $2,449
- Traditional Cash on Cash Return: 1.4%
- Average Airbnb Daily Rate: $270
- Monthly Airbnb Rental Income: $3,476
- Airbnb Cash on Cash Return: 1.7%
- Airbnb Occupancy Rate: 60%
- Top Boulder Investment Property for Sale
Related: 10 Best Places to Invest in Real Estate in 2021
Ready to Invest in Colorado Real Estate?
The Colorado housing market forecast for 2021 is generally positive. So if you’re ready to jump in and get a piece of this market, start your search right now with Mashvisor. Find and analyze top-performing Colorado investment properties for sale in any of the cities listed above in 15 minutes or less. Click here to start your property search.