Denver Housing Market..........

[MantaRay]

It's just sad to see nationwide that prices had gone up WAY out of lock-step with supply/demand (plus local labor and materials costs). It seems utterly ridiculous to me to have approximately the same ratio of homes on the market to people seeking homes to live in and have housing values increase 25%-50% in 3-5 years. That sort of thing tends to price newcomers and median wage earners out of the market and makes the American Dream that much harder to reach for the common American. Market principles are fine with me. If NYC has a significant undersupply of homes for the population they have, prices should be high. But people expecting their home should double in value in 7 years just because "that's what homes do" just seems like fantasy land to me. So I'm glad for the price drop. The market was artificially inflated well beyond true supply/demand and that means it was one huge bubble waiting to be popped. And as far as it has fallen in some places, it STILL hasn't fallen back to where it should be for actual supply/demand forces (plus local labor and materials costs).

I totally agree with the3Ds 2nd and 3rd paragraphs. Our mortgage broker was rather surprised or befuddled that we were buying a house that was much less than "what we could afford." Our realtor was great in showing us what we said we were looking for, but I know others try hard to up-sell. Houses should be like money market investments or Treasuries. When people try to treat them like stocks and expect the return of a stock, they take on the behavior of stocks. And anybody who knows anything about stocks knows that they go up and down, especially when there is a lot of speculation going on rather than movement based on fundamentals. And when you look around the nation, cities whose home values rose more like a money market return are generally still stable and still rising like a money market return, and the cities with the biggest price drops have been places where the home values acted like the Dot Com stocks in the '90s.

[Jerry Bckr]

When I came out here 34 years ago, I was told that historically the Colorado economy moves counter to the rest of the country. Since then, I've seen it happen several times. We started out mess in 2003 and right now we're on the tail end. You will read about average house prices declining, however, you have to remember, it's just averages. That's because the mix has changed. There is approximately a 30 month supply of homes in the million dollar plus range on the market. The $250-$300 range is doing pretty well, while the low end is pretty hot, as these are being snapped up by investors. It's not unusaully to see multiple offers on many of thes homes. Take all together you get an average. It's like you had a dealership where you sold Chevys and BMWs. You used to sell 7 BMWs for every 3 Chevys, but now you sell 4 BMWs for every 6 Chevys. Guess what? Your average sales price dropped even though you're selling the same amount of cars. Our inventory continues to drop as homes continue to sell.

[ds495]

Speaking of LA, it raised up 200% in 3 years. So when they say rates have fallen 25% or 40%, its from that overinflated rate. Over 5 year it can still be over what was paid.

I agree with the poster that the value is what someone is willing to write a check for.