Metro Denver Real Estate – A Sure Bet?

January 10, 2020 | Market Trends

Your odds of winning the Colorado Lottery … 1 in 5.3 million.
Your odds of winning PowerBall … 1 in 292 million.
Your odds of winning (making money) when selling residential real estate in metro Denver sometime in the last 26 years … better than 4 in 5!

No matter when you bought or sold a residential property in the Denver area over the last two and a half decades, there is an 82% to 86% chance that your sale price was more than your purchase price.

How do we know this?
We have 26 years of historic data! on the average monthly sale price of homes.

In a time frame that included some strong periods of growth, a time of stagnant growth and the biggest market downturn since the great depression. We looked at various ownership periods ranging from 2 to 10 years starting w/ August of ’94 and going through December of ’19.

For example, we looked at buying an average house on August 1, 1994 and selling it on July 31,1996. Then we looked at buying the average house a month later on September 1, 1994 and selling it a month later on August 31, 1996. We kept doing that for every 2-year period over the entire 22 years – a total of 282 separate 2-year time periods.

We repeated that process for every 3-year, 4-year, 5-year, 6-year, 7-year, 8-year, 9-year and 10-year time period.
In addition, we did this separately for single family homes and multi-family homes.
In total, we analyzed 4,212 different scenarios. The results:

    • 86.42% of all scenarios showed a gain in value for single family homes.
    • 82.05% of all scenarios showed a gain in value for multi-family homes.

Longer time frames provide the greatest protection from a loss. There was not a single 10-year scenario with single family homes where you would have lost money. With multi-family properties, there was only 11 out of 186 possible 10-year periods where you would have experienced a loss.

Buying a lottery or PowerBall ticket is optional.
But, you HAVE to live somewhere.

So, it’s good to know that the odds of making money on your residence are very much in your favor when you are privileged to live in metro Denver.

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