As a nationwide boom in housing slows, analysts are predicting continued gains in home values for the Denver metro area in 2019.
"On the whole, we expect home prices to continue rising — they'll be up 2 percent (nationwide) next year," said said Danielle Hale, Chief Economist for Realtor.com. "That's lower than we've seen in last few years and that's because we expect to see rising inventories."
Realtor.com predicts the median home value in Denver will rise 6.8 percent in 2019, which is higher than Zillow's forecast of 5 percent.
Buyers may face less competition in 2019, but they'll have to contend with rising mortgage rates. Hale said those looking to buy a home should be practical and make sure it's something they can afford right now.
Affordability remains a challenge because developers have mostly built larger, more expensive homes.
"We know there's high demand for entry-level homes from potential first-time buyers and that's what market needs, but builders have a hard time building those homes at a profit," Hale said.
Demand for higher-priced homes will be driven by millennials, with many now looking to buy their second home, a step up from an entry-level home.
Realtor.com is predicting mortgage rates will end 2019 at 5.5 percent. Zillow predicts an slightly higher level of 5.8 percent.
Overall, Realtor.com said Denver remains an attractive city with a booming tech sector that will see continued population growth.
"As long as Denver remains an attractive place to live and continues to attract new residents, I think that’s going to continue to boost the housing market," Hale said. "One thing that the market could do to keep prices at a sustainable level that’s more in line with income growth in the area is make sure they’re creating enough new places for those residents to live."
Also on Thursday, the real estate website Trulia released the top housing markets to watch in 2019. Colorado Springs was No. 1 on the list. Many of the markets featured on the list are near cities with higher costs of living, like Denver.
Trulia’s top ten markets to watch in 2019:
- Colorado Springs, Colorado
- Grand Rapids, Michigan
- Jacksonville, Florida
- Bakersfield, California
- Austin, Texas
- Fresno, California
- Phoenix, Arizona
- Columbia, South Carolina
- El Paso, Texas
- Oklahoma City, Oklahoma