Colorado and California are two parts of the West with very different environments. Colorado is known for its Rocky Mountains, deep green forests, and frigid winter snows. When you picture California, you imagine sandy beaches, dark blue waters, and warm year-round sun. However, despite these differences, there is a lot of synergy between Colorado and California. These two states share a lot in common, and in the past few years, they are beginning to share many residents in common. A large number of Californians are packing their bags and migrating to Denver.
Denver is Colorado’s biggest city, and it has experienced a significant economic and population boom over the past several years. The Denver Metro Area is rapidly growing right now, drawing in large investments from tech companies and other businesses and fostering an extremely appealing environment for professionals. This trend of growth appears poised to extend to the future. According to data from Best Places, the Denver Metro Area is expected to have a future job growth rate of 45% over the next ten years, significantly higher than the US projected growth of 33%.
Colorado’s booming economy and gorgeous natural scenery are big reasons for domestic migration, and a significant contingent of the people heading to the state are Californians. According to data from Stacker, 30,000 people moved to Colorado from California in 2019 alone. This was the second-highest number of any state and almost double the number of people that moved from Colorado to California.
There are lots of things drawing Californians to Colorado. For starters, the lower cost of living makes a significant impact. According to Allied, Colorado’s cost of living is 31% higher than the national average. For many, that would be a reason not to move. But for Californians, the Colorado cost of living is a dramatic step-down. California’s cost of living is 35-40% higher than Colorado’s.
Taxes are also more reasonable in Colorado. The state income tax rate of 4.5% is significantly lower than the 8-12.5% that most Californians are paying, and property taxes in Colorado are significantly lower than the ones in California. A reduced cost of living and lower taxes makes a move to Colorado an economic decision, although the increasing demand for homes in Denver has led to a drop in supply and rising prices.
The cost of a home in Denver has risen dramatically over the past five years. According to Redfin, in February 2017, the median sales price for a home in Denver was $350,000. In February 2022, that price had reached $550,000. This is a $200,000 increase in just five years, and even if that scope is narrowed to the start of 2021, the increase is still substantial. In January 2021, the median sales price was $465,000.
The culprit for these rising prices is the lack of supply to meet the demand. While thousands of Californians are packing their bags to head for Denver and Colorado every month, the number of homes available simply can’t match this influx of interest. According to Norada, the Denver Metro Area has 0.4 months supply of homes available. The market’s number that is considered healthy is six months’ supply. A growing population hungry for homes and a housing supply that can’t match that demand is a recipe for surging home prices.
There are many reasons for Californians to want to head to Denver. This is not to say there isn’t a lot to love about living in California. But the high costs of living may be wearing some residents down, and many are seeking a change of pace. Denver and Colorado overall make for the perfect place to relocate.
It is easier and more proximate for Californians to relocate to Colorado than states like Texas or Florida, which have also seen population surges. Denver still has the urban, cosmopolitan feel that many Californians seek out and combines that with an incredible, growing economy. Of course, the gorgeous natural scenery, established luxury real estate market, and some of the best skiing in the world a short distance away doesn’t hurt.
