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Old 04-19-2016, 03:33 AM
 
Location: Denver, CO
942 posts, read 1,253,318 times
Reputation: 1036

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If the Denver housing market continues to increase, employers will find Denver cost of living too high and the economy will slow creating a bubble.
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Old 04-19-2016, 05:07 AM
 
Location: Colorado Springs
4,788 posts, read 4,893,732 times
Reputation: 17130
At some point the boomers will have to sell. We all eventually get old and feeble no matter how much we deny it. Eventually, walking up those stairs with weak knees will become too much of a burden.

At that time there will be a huge supply coming to market. So I expect prices at best to flatten out.

Moreover, if interest rates ever go back up that will create a significant headwind to price growth.

So my advice is to buy a house to live in and don't think of it as an investment.
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Old 04-19-2016, 09:32 AM
Status: "Celebrating 30 years as a Broker" (set 18 days ago)
 
Location: Just south of Denver since 1989
10,882 posts, read 29,307,638 times
Reputation: 7085
Quote:
Originally Posted by alloo66 View Post
If the Denver housing market continues to increase, employers will find Denver cost of living too high and the economy will slow creating a bubble.
That is not what creates a bubble.

At this point, most properties have equity. Most people have jobs. Credit is not easily obtained.

Unemployment is near record lows. Interest is near record lows. Foreclosure filings are below "normal" in the state. Properties for sale is 1/3 of what would be a normal market.

See Colorado Economy at a Glance
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Old 04-19-2016, 09:54 AM
 
43 posts, read 46,050 times
Reputation: 81
Quote:
Originally Posted by Vision67 View Post

So my advice is to buy a house to live in and don't think of it as an investment.
Best for advice for any market.
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Old 04-19-2016, 10:46 AM
 
Location: Denver CO
20,970 posts, read 11,615,689 times
Reputation: 31807
Quote:
Originally Posted by Vision67 View Post
At some point the boomers will have to sell. We all eventually get old and feeble no matter how much we deny it. Eventually, walking up those stairs with weak knees will become too much of a burden.

At that time there will be a huge supply coming to market. So I expect prices at best to flatten out.

Moreover, if interest rates ever go back up that will create a significant headwind to price growth.

So my advice is to buy a house to live in and don't think of it as an investment.
emoticons aside, the baby boomers covers a huge number of years. It's not like there is some key event where suddenly millions of people all at one time get too old to climb stairs and sell their homes. So I don't think there will be any sudden onslaught of new listings coming to market all at once. At best, we maybe increase listings closer to normal a opposed to being so abnormally low.

Personally, I'd be fine with values leveling out a bit. Well, not the values themselves, but a bit of flattening of the rate of appreciation. But I still don't see that happening until demand levels out as well, and with population growth - not people already in Denver who want to buy or move, but the 10s of thousands moving here from elsewhere - that's not changing so fast.
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Old 04-19-2016, 11:11 AM
 
Location: Denver, CO
898 posts, read 987,183 times
Reputation: 1366
Blame:
The baby boomers
The tech bros
The government
Obama
The liberals
The conservatives
The weed

Don't you want somebody to blame? Don't you neeeeed somebody to blame? Wouldn't you like somebody to blame you better find somebody to blame....

Jokes aside I've seen all of the above blamed for the cost of living and housing "bubble" on this forum. Which one is the root cause? Is there a root cause?
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Old 04-19-2016, 11:21 AM
 
Location: Prescott Valley, AZ
2,658 posts, read 2,304,927 times
Reputation: 2656
Hello $500k median home prices in 2020, it will happen.
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Old 04-19-2016, 12:33 PM
 
5,444 posts, read 4,811,646 times
Reputation: 15020
Quote:
Originally Posted by ayoitzrimz View Post
Blame:
The baby boomers
The tech bros
The government
Obama
The liberals
The conservatives
The weed

Don't you want somebody to blame? Don't you neeeeed somebody to blame? Wouldn't you like somebody to blame you better find somebody to blame....

Jokes aside I've seen all of the above blamed for the cost of living and housing "bubble" on this forum. Which one is the root cause? Is there a root cause?
I blame the economy. Stupid growing economy. Why can't the economy suck like it did back in 2008?
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Old 04-19-2016, 12:53 PM
 
Location: Denver, Colorado U.S.A.
14,174 posts, read 23,211,765 times
Reputation: 10428
Quote:
Originally Posted by headingtoDenver View Post
I blame the economy. Stupid growing economy. Why can't the economy suck like it did back in 2008?
If we could just crash the economy, take away things that make Denver desirable, close down the ski resorts, and force businesses to leave Colorado, housing would be way cheap here!
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Old 04-20-2016, 12:51 PM
 
6 posts, read 4,319 times
Reputation: 15
I have been a real estate appraiser for almost 30 years now, with no axe to grind. I have to say how nave I find most people to be. I realize that the beginning of this period of appreciation (coming off of the 'great recession') began at a period where property values were unrealistically low. But now prices have been increasing at ridiculous levels of yearly appreciation for many years, surpassing bubble values by a considerable amount. I have seen this mania take place in many markets, many times before (including California). Prices are not only driven by the economy and prevailing interest rates, but mostly by group think. When prices are appreciating at a rapid rate there is the fear of missing out and being priced out forever. People gloat of their smart timing and great gains/appreciation. At the present time, prices are being driven by low interest rates, a somewhat stronger economy, but mostly by fear (priced out forever). It is pushing future demand forward. Ask yourself the question, how long can such levels of yearly appreciation continue, with only minor gains in income. What makes the Front Range suddenly so desirable that people would pay almost any price to live here? Lastly, to the person who posted that real estate rarely goes down, please do some research. Yes, in the long haul prices typically go up, but there are often great swings in value, especially in markets as volatile as this one has been.
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