Zip Codes Where Home Values Have Soared by 100%
The Denver Business Journal had a great story last week on home value increases by zip code since 2009 using data from Zillow. The zip codes that saw the biggest increases shared these 3 common traits. First, prices plunged in these zip codes during the Great Recession. Second, these 6 zip codes have some of the lowest median household income levels in the metro area. Third, 3 of the zip codes were close to the urban core of downtown Denver. Here are the 6 zip codes with their price increases and median household income—
- 80204—119% price increase with a median household income of $36k
- 80219—105% price increase with a median household income of $44k
- 80223—105% price increase with a median household income of $48k
- 80010—132% price increase with a median household income of $39k
- 80239—105% price increase with a median household income of $54k
- 80011—100% price increase with a median household income of $44k.
I would not be surprised that the homeownership rate in these 6 zip codes is very low, probably less than 40%. Why? If an owner occupant didn’t buy or already own several years ago they could not afford to buy a home in these neighborhoods. Second, a traditional owner occupying borrower rarely buys at the bottom of the market out of fear; whereas, a wise investor is much more likely to buy at the bottom of the market.