Premium home prices across Colorado’s Front Range have had buyers in a pinch for the past five years. Those seeking an affordable home in or around Denver have struggled through stressful multiple offers and price tags that they simply couldn’t afford. Real estate experts agree that this extreme seller’s market is due mostly to the area’s listing shortage.
And yet, a ballot measure is working its way into the November elections that would limit new housing growth to 1% or less of the existing homes in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer, and Weld counties. Colorado initiative #66 would clearly have a wide-reaching impact on Denver’s housing market.
In a recent update, as reported by The Denver Business Journal, "The Colorado Supreme Court has ruled against an effort to keep an initiative limiting Front Range housing growth off the November ballot." Backers of initiative #66 now have the go-ahead to begin collecting signatures.
If this measure passes, the math will be simple; metro Denver’s inventory shortage plus less inventory will equal more expensive housing and an even stronger seller’s market.
This equation would not only make home purchasing more expensive, but would also continue the cycle of low listings we’ve seen in more than one way:
2017 saw a deficit of about 32,000 homes and apartments, meaning that metro Denver could sell an additional 32,000 homes if they were available on the market. If Initiative #66 passes, that housing deficit will increase by about 13,000 homes per year. -Shift Research Labs
In addition to lagging new construction in the Denver area, Denver has seen record low home listings (of existing builds) over the last several years. This is largely due to would-be-sellers' fears that they won’t be able to afford their downsizing or upsizing plans once their home is sold. Clearly, tighter inventory will only amplify this cycle.
Additionally, with homes under the $400K price point already very difficult to come by, further inflating home prices would make these homes more competitive to purchase. If this ballot measure is passed, those seeking affordable homes will find it extremely difficult to live in the Denver area. Furthermore, new builds are likely to skew even farther in the luxury direction, given that each home sale will have to produce a higher profit margin. Essentially, metro Denver could make affordable homes a thing of the past if Initiative #66 is put into action.