Cranes, Cranes, Cranes… and Still No Condo Hi Rise

Glass House View

Sure, almost every single block downtown has cranes actively working.

There are cranes in Union Station. Cranes adding office buildings like the Triangle, Mixed Use Apartment projects such as the Platform (21 Stories High). There are even cranes building higher cranes.

But there are NO cranes building residential high rise development projects.

As we have reported before, the Denver construction frenzy continues to lack any new residential projects that were once a standard in our new development builds during the 2000’s. Remember when the Glass House, SPIRE and ONE Lincoln were in all the headliners.

Those days are long gone. As reported in the Denver Business Journal earlier this year “More on the cover story: Condo defects law spurs Denver-area apartment development

As recently as 2006 and 2007, 26 percent of new housing starts for the Denver area were for for-sale condo units rather than for rentals, according to Metrostudy, a Greenwood Village-based market research firm. That number dropped to just 2 percent in 2013.

Just 2 percent in 2013… and we don’t expect that to change much in 2014 without some new legislation.

So let’s talk about what that means for Real Estate buyers and sellers.

For both buyers and sellers the laws of Supply and Demand seem to be doing everything you would expect. Prices in the Glass House, SPIRE, and other Downtown Denver condo buildings continue to rise. We are seeing asking prices increase not just from year to year, but from month to month. With the population growth of Denver combining with the parcels that are being grabbed for apartment buildings owning a residential condo downtown is getting to be more valued.

But there are still great buys to be had. Denver is certainly still growing and the combination of rising rental costs with the lack of any new residential high rise projects for sale (or for that matter even breaking ground) it may make a great deal of sense to make the transition from renter to owner now.

Of course for our sellers, it’s a great time to list a condo. Inventory continues to move fast and prices have held strong.

It’s hard to predict when Denver will see a new residential tower offering. Some believe that the Development community will hold out until legislation changes allowing for more protection from HOA liability. Others predict that many Developers are constructing their apartment projects to a higher quality level in anticipation of converting them to “for sale” projects once the time limit for liability expires.

Both of these options could be years, and years, and years, and years, and years away. Don’t forget that even if a developer jumped into the market today announcing a new project it would still take a long time to get a project from concept to construction and ultimately move in condition.

Long story short, if your goal is to live in a condo downtown consider making the leap sooner than later.

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