Downtown Denver
Downtown Denver © Blaine Harrington III/Corbis

One of the strongest property markets in the US is not where you might expect it. New York City, Dallas and Miami have all seen sustained rises in values over the past few years, yet Denver, Colorado’s capital in the shadow of the Rocky Mountains, has outpaced them all.

House prices rose 13.1 per cent in the 12 months to August, according to the Denver Metro Association of Realtors; prices have risen 43.8 per cent since 2011. That rise is among the highest of any major city, according to the S&P/Case-Shiller home price indices. Only San Francisco posted stronger numbers during the same period.

The mountains, where one can ski or hike in national parks and where pronghorn, elk and moose meander among the snow-capped peaks, have long been a draw. The city also exudes a laid-back cosmopolitan vibe. But the latest surge in house prices is fuelled by a steady stream of young professionals, attracted by a strengthening local economy.

More than 100,000 out-of-state residents moved to Denver between 2010 and 2014, according to the US Census Bureau, the fifth-largest migration in the country. For the first time, people aged 20 to 34 outnumber baby boomers in the city, the census data show.

“Denver has always been a magnet for people from the Midwest and parts of the west,” says estate agent Anthony Rael, chair of the Denver Metro Association of Realtors’ market trends committee. “But we’re now seeing large numbers of newcomers from the east coast and California.”

Denver map

Growing technology and telecoms sectors are driving the population increase, as is general economic growth. Colorado’s economy grew 4.7 per cent last year, which was more than double the national average and the fifth-strongest US state, according to the US Department of Commerce. IBM, Oracle and Lockheed Martin are among the tech companies that have expanded in Denver, bringing tens of thousands of new jobs to the city. Much of the expansion is due to job-training programmes and tax incentives launched by the city in recent years.

The increase in new buyers is keeping the supply of properties tight, says Jackie Long, owner and managing broker at Fresh Air Real Estate. “When you adjust for population, the number of available listings is nowhere near enough for the demand,” she says. “We’re seeing multiple offers on almost everything that comes to the market and it’s creating a frenetic pace where many properties are sold within a week.”

Rents are also high. In August, Denver’s average rental prices increased 6.9 per cent from August 2014, compared with 2.3 per cent nationwide, according to a report by Apartment List, a research firm that tracks rental rates nationwide. “People are seeing rents that are higher than most mortgages,” says Michelle Ackerman, managing broker at estate agency Redfin.

Well-heeled residential areas include districts outside the city centre and closer to the mountains, such as Evergreen, Cherry Creek and Englewood, leafy areas lined with expensive housing and smart boutiques and restaurants.

Four-bedroom house in Cherry Creek North, $4.65m
Four-bedroom house in Cherry Creek North, $4.65m

A four-bedroom house in Cherry Creek North is on sale for $4.65m through Christie’s International Real Estate. Finished in 2013, the 10,000 sq ft home includes a fitness room, an 800-bottle wine room and a 12-seat cinema.

But downtown areas such as Five Points and LoDo are seeing the most building activity in the city. New condominiums and town houses in these areas are mostly targeted at younger buyers.

A condo in a newly completed set of town houses in the city’s Highland district is on sale for $1.27m through Keller Williams. The three-bedroom home measures 2,928 sq ft and has oak flooring and more than 800 sq ft of shared outdoor space.

Though demand for condos was weak after the financial crisis in 2009, about 9,000 new units are in the pipeline this year, says John Covert of Metrostudy, a housing research firm. Condo prices were 18 per cent higher in August this year than in August 2014, according to Denver Metro Association of Realtors. They have risen 43 per cent since 2011.

Market Street and Coors Field baseball park
Market Street and Coors Field baseball park © Charles Cook/Getty Images

A mixed-used development called 250 Columbine, which has 71 condo residences, is under construction in Cherry Creek North. The project, developed by Western Development Group, will include 30,000 sq ft of retail space. Prices for one-bedroom apartments range between $560,000 and $770,000. A penthouse is priced at $3.69m. The complex, due to be finished this year, includes a rooftop pool and terrace, and the apartments have outdoor balconies. Only three of the units remain for sale, the developer says.

“The condo market hasn’t really seen this kind of building activity and price gains since the oil boom in the 1980s,” says Chad Ochsner, a broker at estate agent RE/MAX in Denver. “There’s a real sense the market has room to grow.”

Buying guide

● Denver is located 5,280ft above sea level and has a population of 650,000

● There are an average of 300 days of sunshine a year; winter temperatures average a daily high of 7.2C, summer 30C

● There are no restrictions on foreign buyers in Colorado

What you can buy for . . .

$500,000 A three -bedroom, 3,000 sq ft home in the Englewood district

$1m A four-bedroom home in the Cherry Creek neighbourhood

$3m A five-bedroom house with a two-car garage in Highland

For more properties, please visit ftpropertylistings.com

Photographs: Blaine Harrington III/Corbis; Charles Cook/Getty Images

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