Record Prices Despite Fewer Sales
Central Denver Apartment Market Report: Cover page of our 2017Q1 newsletter
The average price of Central Denver apartment transactions rose to a record of over $164,000 per unit in 2016. That figure excludes the sales of recently-constructed buildings, and is a 6.7% increase over 2015’s average of $154,000. These figures include all sales between 10-100 units in the Central Denver neighborhoods east of downtown.
The growth of sales prices has slowed down from its recent skyrocketing trajectory. The 6.7% growth rate and $10,000 increase in the average prices per unit from 2015 to 2016 are the lowest figures in five years.
We saw several sales of Central Denver buildings above $200,000 per unit last year, and 2016 was the first year without a single sale below $100,000 per unit. It’s unlikely we’ll be below that price level again soon; the initial sales of 2017 have maintained robust prices.
There were only 41 transactions in 2016, noticeably below the recent average of 50+ sales. Many investors are wondering when will the market reach its peak. Declining transaction volume is one possible indicator that we are nearing the top. Rising interest rates, new construction projects, and job growth are all factors to watch closely in 2017.
by Greg Johnson