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Old 01-16-2017, 08:54 AM
 
Location: Denver CO
21,193 posts, read 11,814,728 times
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How do they even define "overvalued"? California and the Northeast are all showing as undervalued.
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Old 01-16-2017, 10:08 AM
 
Location: Just south of Denver since 1989
10,916 posts, read 29,418,729 times
Reputation: 7150
It's another computer algorithm. Loosely based on real life.
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Old 01-16-2017, 10:20 AM
 
Location: Denver, CO
760 posts, read 590,984 times
Reputation: 1482
Quote:
Originally Posted by emm74 View Post
How do they even define "overvalued"? California and the Northeast are all showing as undervalued.
It's by income mainly.

And it isn't as simple as just taking the median sale price over the median income. It's by how many people have incomes that can support the top of the market.

Because inventory is extremely low right now, the high prices are supported because there are so little homes on the market. But once the migration slows down, and more homes come onto the market, there will not be enough people around to support to ever growing high prices.

For example, if only 1/100 homes are for sale in a given neighborhood, and that home sells for $800k, it doesn't mean that all of the other 100 homes are worth 800k. If the next year, 20 of those homes go onto the market, there would need to be 20 buyers who could afford $800k to maintain that price. A good way to think about it would be to average what every single home in Denver sold for.

The North East and California have a much higher population, along with higher density, meaning a very low ratio of home owners to renters. If those regions are undervalued, it means that there are plenty of high income earners around to push the prices even higher and keep them high. It doesn't matter if the median income is only 45K, and the average home price is say...1 million.

Denver won't become "undervalued" unless our population grows astronomically, or until Denvers high median sale price has maintained itself throughout a couple real estate cycles, increasing the amount of people that have paid for a home at the median price.

I don't believe we will have a bubble pop/crash, but I do believe we will see some correction in the next few years, most likely a result of economic slow down or recession. It would be naive to think Denver is immune from a recession...but at the same time, it would also be naive to believe that Denver won't pick up where it left off, and continue to boom again once a recession passes.

Denver did just fine during the last recession because it had a relatively low cost of living. The problem today is that because the COL is so much higher here, if we hit another recession, we are going to lose a lot of people because there are so many around barely making ends meet as it is.
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Old 01-17-2017, 10:26 AM
 
Location: Golden, CO
63 posts, read 42,486 times
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Quote:
Originally Posted by MN_Ski View Post
I don't believe we will have a bubble pop/crash, but I do believe we will see some correction in the next few years, most likely a result of economic slow down or recession. It would be naive to think Denver is immune from a recession...but at the same time, it would also be naive to believe that Denver won't pick up where it left off, and continue to boom again once a recession passes.
Given that, do you buy now or wait until a recession? It seems the opportunity cost will be a wash either way. If you wait (say 2 years) then you're out $15k+ on rent and there's no guarantee prices will drop enough to justify the wait.
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Old 01-17-2017, 10:46 AM
 
Location: Castle Rock, Co
1,614 posts, read 2,678,847 times
Reputation: 959
Quote:
Originally Posted by Scot5 View Post
Given that, do you buy now or wait until a recession? It seems the opportunity cost will be a wash either way. If you wait (say 2 years) then you're out $15k+ on rent and there's no guarantee prices will drop enough to justify the wait.
and interest rates will likely be higher so your buying power will be lower.
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Old 01-18-2017, 10:31 AM
 
5,444 posts, read 4,860,225 times
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Quote:
Originally Posted by Scot5 View Post
Given that, do you buy now or wait until a recession? It seems the opportunity cost will be a wash either way. If you wait (say 2 years) then you're out $15k+ on rent and there's no guarantee prices will drop enough to justify the wait.
You buy a house when you feel you are ready to buy a house. If you want a house now and you have the financial standing to do so, then buy a house. Why wait? There is no 'perfect' time to buy a house especially if you are constantly playing the 'what-if' game. What if rates go up? What if rates drop? What is home prices drop? What if home prices continue to go up? What if nothing I like is available? What if.... blah blah blah?
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Old 01-18-2017, 08:29 PM
 
214 posts, read 193,689 times
Reputation: 380
Quote:
Originally Posted by Tim Tim Tim View Post
and interest rates will likely be higher so your buying power will be lower.
Higher interest rates plus a recession would destroy Denvers growth driven economy. You will probably be able to get a better deal on a home, but you might not have a job.
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Old 02-07-2017, 08:48 AM
 
Location: The Berk in Denver, CO USA
14,049 posts, read 20,382,028 times
Reputation: 22835
Default U.S. News picks best places to live; here's where Denver ranks

U.S. News picks best places to live; here's where Denver ranks

http://www.bizjournals.com/denver/ne...res-where.html

Living & Working in Denver, CO | US News Best Places to Live

"Over the last few years, Denver has experienced a population boom, and it doesn't seem to be slowing down anytime soon. As a result, the cost of living has dramatically increased since 2009, with housing costs seeing one of the biggest hikes. The average home price in Denver is now significantly higher than the national average."

Lotts of info.
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Old 03-03-2017, 05:10 PM
 
Location: Colorado Springs
4,851 posts, read 4,967,060 times
Reputation: 17348
Default Denver's housing inventory lowest in 32 years.

Good luck, homebuyers. Denver’s housing inventory is lowest in 32 years – The Denver Post

"Metro Denver had a record low number of homes for sale at the end of February, but a surge in sales can’t be blamed for the empty shelves.

There were 3,878 residential properties available for sale at the end of February, the lowest monthly total in records going back to 1985. The inventory was 2.14 percent below the previous bottom reached in February 2016, according to a report Friday from the Denver Metro Association of Realtors."
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Old 03-03-2017, 05:19 PM
 
Location: Washington Park, Denver
6,964 posts, read 6,573,338 times
Reputation: 7492
Crazy times
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