Denver Colorado Real Estate Market

Real Estate News, Statistics & Current Events

Real Estate Sales and Rental Markets Denver, Colorado 2015

January's Real Estate Market (2015)
 Year over year median sales prices are up 14.47% and average sales are up 11.22%. Year-to-date, a total of 53,719 homes closed, the average price was $325,634. Condos had a huge increase in sales volume year over year with an increase in sales volume of 56%.

Residential (Single Family plus Condo)

Active Inventory: 4,355    -19.65% prior month 
Sold Homes: 3,869   +2.9% prior month
Average Price: $340,448   +3.41% prior month
Median Sold Price: $287,000   +2.50% prior month
Average Days on Market: 46   +17.95% prior month
Looking at February,
2015 should be a great for new construction, and the real estate market in general.  Although, we see a decrease in sold homes mostly due to low inventory and time of year, there is also an increase in buyer demand.  This combined with extremely low inventory results in a strong seller’s market.  For the foreseeable future, the low inventory will continue to drive prices up.  There are over 20,000 less properties on the market today than in 2008.  
Active Inventory: 4,171    -4.23% prior month 
Sold Homes: 2,328    -42.74% prior month
Average Price: $332,767   -1.96% prior month
Median Sold Price: $285,000   -0.35% prior month
Average Days on Market: 43, -6.52% prior month

Keep in mind we had almost 28,000 homes on the market in 2006 and we are back to 2006 prices.  

Denver’s Rental Market 2015

Vacancy Rate
Vacancy rates in Denver remain low and continue to be under 5%.
Residential building permits are up 49.8 % from November 2014 to December 2014.  In 2014 residential building permits were up 15.7 % for the year, through December.
4.7 % - Vacancy decreased 0.8 percentage points from 3Q 2014 to 4Q 2014.
Even with increased inventory in the fourth quarter of 2014 and over the last two years, rental increases and low vacancy rates are both expected to continue.  This is due to the low Denver metro unemployment rate, desirability of the region, immigration and population growth.  Many 20-30 year olds who moved to California, Vegas or Phoenix originally are now looking at Denver as another alternative.  


Real Estate Through an LLC

Investors are looking for more protection and more privacy, holding real estate through an LLC or Limited Liability Company could be the answer.  However there are important issues to consider when holding real estate through a limited liability Company.

Negatives to owning real estate through an LLC:

- “Due-on-Sale or Transfer” Clauses Deeds of trusts, the instruments that secure notes, commonly contain provisions known as “due-on-sale” or “due-on-transfer”.  These restrictions allow the lender to call the loan due if the title to the property has changed without the lender’s consent.  If this is the case with your deed and if you purchased the property in your name and had it transferred to an LLC, the lender can recall the loan.  You must check with your lender before making this decision.  

- Capital Gain Exclusion  If you transfer your primary residence into a multiple-member LLC, you may lose the ability to benefit from the IRS’ capital gain tax exclusion. If you have a gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse, so long as you’ve lived in and owned your home for at least two of five years. However, if you transfer your primary residence into a single-member LLC you may still take advantage of the capital gain exclusion because the LLC is treated as a “disregarded entity” for federal tax purposes.  
- Mortgage Interest Deductions  If you transfer your primary residence to a multiple-member LLC, you may no longer qualify for mortgage interest income tax deductions because you no longer own the property by yourself (which means you cannot take a personal deduction). However, in a single-member LLC, the owners are generally entitled to mortgage interest deductions. 

Benefits to owning real estate through an LLC:

- Privacy  Many people like to have their privacy.  A limited liability company can do that. 
- Personal Liability  Owning a property through a limited liability company may provide legal protection from liability for the owner because law suits will be directed towards the LLC, rather than the individual that owns the LLC.  In most cases they cannot sue you personally so the liability would go no further than what assets were held through the LLC.  However, owners that manage a property may find themselves party to a lawsuit (especially went negligent) as an LLC may not protect you from all claims against you relating to your property.

Some owners find the combination of privacy and liability protection make it well worth it, especially with investment properties.  However, everyone should consult with a tax attorney and/or accountant before making any decisions.  


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