Denver enjoying a Goldilocks housing market!
The recent cold snap made us all appreciate the return to more seasonal weather, which felt absolutely balmy after braving below zero temperatures. Now, the cold-snap seems but a distant memory. The same is true about the Denver-area real estate market.
Denver is experiencing a Goldilocks housing market – not too hot, not too cold. Not long ago, the housing market, was in a deep freeze. It wasn’t just in Denver. Real estate markers across the country were ice cold during the Great Recession.
The only people in the market wanted to snap up distressed properties – either foreclosures or short sales, where the lender agrees to take less than the mortgage amount when the home is sold. Unfortunately, there was no shortage of those kind of properties, as unemployment rose and housing prices plummeted like the mercury in a thermometer. Too many consumers had overpaid for homes that were financed with risky mortgages.
Today, those type of distressed properties are far and few between in Denver. Most of the homes with subprime mortgages have worked their way through the system, much like an arctic front that has been replaced with more seasonal and less severe weather. Denver housing has been showing about a 10 percent year-over-year increase in value, while other markets, such as Las Vegas and Phoenix are red hot, experiencing home appreciation at two or three times that rate. Like extremes in weather, that is not good.
Denver is in a much more enviable position than those other markets, where values are rising so fast that they could be facing another bubble. When you look back at the dark days of 2009-2011, as bad as it was, Denver’s housing market never suffered as much as many other cities across the country. Denver and Dallas were the first major markets to return to pre-recession prices. Other markets are still below the peak prices they reached in 2006, despite their recent huge gains. Yet, housing affordability in Denver remains strong and if you are thinking of buying a home, Denver is the place to be.
A 25 percent or 30 percent year-over-year gain is not sustainable. You don’t want to buy a home in a market where your risk vastly overpaying, as the market corrects itself. Denver’s housing forecast is a lot like the weather. Yes, there will be some periods of dips, but the long term outlook is sunny skies and pleasant temperatures. But like the weather, the housing market is subject to change without warning.
Today, Denver is basking in a market where homes are still reasonably priced and interest rates are incredibly low by historical standards. If you want to take advantage of this Goldilocks market, please don’t hesitate to call. Thank you!