Why is Colorado Real Estate so Expensive

Home values have increased in the Centennial State due to a variety of reasons that include booming population, the focus on luxury homes and low interest rates. Let`s take them one at a time.

Population growth

There is no secret that Colorado has become a very popular state that keeps driving people to move here, mainly due to the quality of life and job opportunities. The metro area is a great place to grow a career in a variety of industries that are thieving here: oil and gas, manufacturing, tourism etc. Colorado has one of the lowest unemployment rates, even with the current pandemic situation. In summer 2020, this rate was 7.4% compared to 10.2% unemployment rate at a national level. These numbers have different consequences: a rise in payment, but an increased cost of living.

Statistics show that 35 people move into the city of Denver each day. The higher the number of people who move here – the more housing in demand. That may sound great for some, but builders have a hard time to keep up with the new demand, not to mention that there is a finite amount of land. These aspects alone can cause real estate prices to skyrocket.

Prices in Colorado may still seem reasonable compared to California for example (median home price is about $430,000 compared to more than $600,000!), but these prices are not expected to go down soon, on the contrary. The population growth will increase the housing shortage and drive prices up, which is one of the downsides of Colorado’s significant overall success.

The recession in 2008

2008 may seem long gone now, but actually we must take into account the Great Recession to understand the housing boom of the Centennial State.

Many other places became overdeveloped back in 2008, but not Colorado. As a consequence, home builders sought after the safer bet with higher margins – wealthy homes. As a result, the real estate market for Southlands homes has seen an excess of luxury homes, but fewer options for people looking to downsize, in order to cope with the effects of the crisis. Unfortunately, affordable housing only further increases the median price, due to low profit margins.

Southlands homes

Besides, Colorado has the most high-income renters in the country, who drive up prices throughout the real estate market and keep builders’ interest away from lower housing options.

Interest Rates

In Colorado, most people need a mortgage to buy a home, and interest rates have been low lately, which means that prospective buyers can actually afford more expensive homes without spending more than 30% of their monthly income on housing.


This is a part of the reality this year and has affected most industries, including real estate. Considering that a large number of people work from home now, they also consider more space to allow them to work and relax. It is hard to achieve this when things pile up into a small apartment, therefore many individuals leave town to move toward single family homes into suburbs.