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Thinking about investing in real estate in Aurora in 2025? You might want to reconsider.
While real estate has been a popular investment choice, the market in Aurora is showing signs that it might not be the best option in the coming year.
In this blog post, we will explore the reasons behind this trend using reliable data and statistics.
We have gathered information from multiple trustworthy sources to ensure our analysis is accurate and comprehensive.
By the end of this post, we will share our own conclusions based on a full analysis of the data. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) Aurora's "price-to-rent ratio" is 28.4, indicating a significantly high level
Signal strength: strong
The price-to-rent ratio in Aurora is at 28.4, which is considered quite high. This ratio is a key indicator that helps potential investors understand whether buying a property is financially sensible compared to renting it out.
When the price-to-rent ratio is high, it suggests that property prices are significantly higher compared to the rental income they can generate. This means that the return on investment from renting out the property might not be as lucrative as expected.
In simpler terms, you might pay more for the property than what you can earn back through rent, making it a less attractive investment. Investors typically look for a lower price-to-rent ratio to ensure that the property can generate a good rental income relative to its purchase price.
If the price-to-rent ratio were closer to 15, it would indicate a more balanced market where buying could be a better investment option.
Sources: USCensus, Redfin, Zillow
2) In Aurora, it typically takes about 5.3 years for a local to afford a house, which is quite a long time
Signal strength: moderate
In Aurora, it would take around 5.3 years for a local to be able to buy a house, which is considered high. This is a signal that buying property might not be a good investment because it indicates that homes are not easily affordable for the average resident.
The median household income in Aurora is about $89,300, while the median home price is approximately $477,295. This means that the cost of homes is significantly higher than what most people earn, making it difficult for locals to purchase property without financial strain.
When the time it takes to buy a house is long, it suggests that the market might be overvalued or that incomes are not keeping pace with housing prices. This can lead to a situation where fewer people are able to buy homes, potentially reducing demand and affecting property values negatively.
If the time it took for a local to buy a house were closer to 3 years or less, it would indicate a healthier balance between income and home prices, suggesting a more favorable investment environment.
Source: USCensus
We created this infographic to show how property prices in Aurora compare to other big cities in Colorado. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) Aurora, Colorado, is expected to see a drop in its population
Signal strength: moderate
The population of Aurora, Colorado, is projected to decrease, which can be a significant factor when considering property investment in the area.
Historically, Aurora has experienced consistent population growth, with a notable increase of 117,990 people from 2000 to 2023, representing a 42.59% growth over 23 years. This growth trend has contributed to a robust real estate market, as a growing population typically drives demand for housing, leading to potential increases in property values.
However, the forecast for Aurora's population shows a potential decrease, with projections indicating a population of 396,522 in 2025, down from the estimated 404,219 in 2024. This anticipated decline could impact the housing market negatively. A shrinking population often leads to reduced demand for housing, which can result in stagnant or declining property values.
Investors should consider that a decreasing population might also affect the local economy, as fewer residents can lead to lower consumer spending and potentially impact businesses and services in the area. This economic shift could further influence property values and rental demand, making real estate investment in Aurora potentially less attractive.
Sources: Neilsberg, Aterio, Common Sense Institute, Aurora Government
4) Airbnb or short-term rentals in Aurora are not very profitable, with a "profitability" rate of just 3.0%
Signal strength: moderate
The cash-on-cash return on Airbnb in Aurora is 3.0%, which is considered quite low for real estate investments.
This low return suggests that the income generated from short-term rentals may not be sufficient to cover expenses and provide a desirable profit. Aurora typically attracts short-term tenants and tourists who are visiting for nearby attractions or events in Denver, rather than for Aurora itself.
These visitors often prefer to stay in Denver for its vibrant city life, which can limit the demand for Airbnb properties in Aurora. As a result, the occupancy rates and rental prices in Aurora may not be as competitive as in more popular tourist destinations.
If the cash-on-cash return were to increase to around 8% or higher, it might indicate a more favorable investment opportunity in the area.
Source: Mashvisor
Our team designed this infographic to show how competitive the real estate market in Aurora is vs. other major cities in Colorado. It shows the percentage of sales above the list price, a key indicator of market competition.
5) Aurora's long-term rental "cash-on-cash return" of 3.0% is notably low
Signal strength: moderate
The cash-on-cash return of 3.0% in Aurora is a key indicator that buying property there might not be a wise investment.
This low return suggests that the income generated from the property is not sufficient to justify the investment. In Aurora, the typical long-term tenants are often families and young professionals who are looking for affordable housing options.
These tenants usually prefer renting over buying due to economic constraints or lifestyle choices, which can limit the potential for rental price increases. As a result, the rental income growth in Aurora tends to be slow, further impacting the investment's profitability.
For this signal to indicate a good investment, the cash-on-cash return would need to be significantly higher, ideally above 8% to 10%.
Source: Mashvisor
So, is investing in Aurora's real estate a good idea for 2025? Probably not.
Investing in real estate in Aurora in 2025 might not be the best move. The price-to-rent ratio is at 28.4, which is quite high, indicating that property prices are much higher compared to the rental income they can generate. This means you might pay more for the property than what you can earn back through rent, making it a less attractive investment.
Additionally, it takes about 5.3 years for a local to afford a house, which is a long time. This suggests that homes are not easily affordable for the average resident, potentially reducing demand and affecting property values negatively. Moreover, Aurora's population is expected to decrease, which could further impact the housing market negatively by reducing demand for housing.
Lastly, the cash-on-cash return for Airbnb and long-term rentals is just 3.0%, which is quite low. This low return suggests that the income generated from these properties may not be sufficient to cover expenses and provide a desirable profit. All these factors combined make real estate investment in Aurora potentially less attractive for 2025.
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