Denver metro housing costs, do you think it will come back down? (Boulder: real estate, rent)

[Phil P]

Originally Posted by 2bindenver

The Denver market will continue to appreciate in the near future. 10-12% for 2017. Inventory needs to be twice what it is for the appreciation to slow.

We did not lose 20% or more of our equity in the downturn.

Interest rate rise only affects a small portion of the home buying public.

If you don't buy, then you rent.

You can make up whatever fear in your head. Having a fear in no way makes that a reality.

That seems overly optimistic IMO. 12% is a LOT, and I don't know that Denver can keep pulling off these #s. Look at rental prices, they have stagnated. They might come back, but they might not. There's a lot of new construction that's going to be on the market by summer. They haven't been building SFHs at the same rate though.

At my workplace, a moderate sized tech company, I'd estimate that about 1/3 of people there rent. Buying a home is already borderline unaffordable (that's why so many in their late 20's and 30's are renting) and if the Fed does go through with 3 more rate hikes, that would essentially be another 10% or so rise on the total price of the house.

Here's the thing, if it's investors buying, they don't care about the interest rates, but that would mean Denver could be in bubble territory and have a drop.

If it's millennials buying who used to rent, the interest rate sensitivity will be pretty big, because most buyers will have at least 80% of the house on a loan.

My bet is on the latter...

And all this is going to make the death road from CO Springs to Denver even worse because more people will hyper commute due to prices.

[Vision67]

Denver area still lags in new home construction – The Denver Post

"Covert said everyone is watching to see when metro Denver will hit its “price ceiling,” but so far buyers seems willing to pay up on new and existing properties.

Strong home price appreciation year after year in markets like Denver has raised fears of another bubble. But Eisenberg notes that despite the run-up in home values, total mortgage debt has remained flat for years and home construction remains anemic.

“We are not in a housing bubble. There are tons of problems in housing. None of them have to do with too much credit,” Eisenberg said."

another key point: "Another factor that creates low inventory: Older Americans, in large part, are choosing to age in place, locking up larger homes that young families desire but can’t find, Eisenberg said.

Covert said builders in metro Denver are finding success with “move-down” homes for baby boomers. But the key is building homes that will sell for less than the older homes empty-nesters are leaving behind."


As an aging boomer living in a way too big house, I can relate. The "move down" houses cost as much as the too big house we're living in. Also, that new place is on a postage sized lot. So we stay put.

[himain]

I hope it does somewhat so I can get in on it possibly

[emm74]

I would say that it's possible that things will level off and prices won't continue to go up 10% or more a year, not that they will drop and go from 350K to 200K. But as long as inventory stays low and demand stays high, even a leveling off seems unlikely without a major change in the economy as a whole.

[davebarnes]

Facts—ignore them at your peril.

1. The US economy is doing quite well. Calculated Risk: Comments: Another Solid Employment Report

2. 50K people have moved into greater Denver each year for the last decade. Could this drop to zero soon? Maybe, not likely. https://en.wikipedia.org/wiki/Denver_metropolitan_area

3. For sale inventory in greater Denver is 20% of normal. Will we see improvement this Spring? Maybe. Will we see a five-fold increase? Highly unlikely. http://www.city-data.com/forum/47086780-post343.html

4. Are builders constructing lots of new houses? Yes, but if over building happens in Dacano how much will that impact house prices in Littleton?

[headingtoDenver]

I can't even imagine what would happen to this area if housing prices were to be cut in half. According to the US Census, Colorado was ranked 4th in population growth when compared to the other 49 states. Cut housing prices dramatically, and I would expect CO to be #1. Also, this would be counter productive since a huge influx of people would cause home prices to rise again.


https://en.wikipedia.org/wiki/List_o...on_growth_rate


So, as long as our growth rate continues to climb, I don't see housing costs going down anytime soon, even with interest rates rising.

[MN_Ski]

I just hopped on Redfin and Zillow, and I am finding tons of listing under 250K...well, it might not be a whole lot, but it's a massive increase compared to last summer/fall.

I think if anything, the median price will stabilize, and we will see more diversity with pricing and housing type. So older and more out dated homes will go for more of a fair price, and good quality homes in decent neighborhoods will continue to appreciate.

[Timmyy]

Originally Posted by MN_Ski

I just hopped on Redfin and Zillow, and I am finding tons of listing under 250K...well, it might not be a whole lot, but it's a massive increase compared to last summer/fall.

I think if anything, the median price will stabilize, and we will see more diversity with pricing and housing type. So older and more out dated homes will go for more of a fair price, and good quality homes in decent neighborhoods will continue to appreciate.

Where are these properties located and what kind of shape are they in?

[emm74]

Originally Posted by Timmyy

Where are these properties located and what kind of shape are they in?

243 S Eliot St, Denver, CO 80219 | MLS #8504141 | Zillow

[N610DL]

It's only a matter of time before it does. But with light rail construction in the suburbs to Downtown, I'd expect those areas to rise in price and Denver proper to settle down.