Denver Real Estate Discussion / Opinion Thread (NO Data Charts) (selling a house, activity)

[Phil P]

I think right now would have to be one of the worst times to buy a home in Denver. Interest rates are expected to inflate housing costs 8% of total loan value next year. The prediction peeps are claiming an addition 7% of housing price increases next year for the Denver area. That would mean a total of 15% increase in price, and I just don't think that will materialise. If the interest rates hikes don't happen, it's because the economy isn't hot, which means prices probably won't rise either.

On the rental side, it looks like prices are staying steady, so I'd think you'd want to continue to rent if you are doing so already here.

[2bindenver]

Originally Posted by Phil P

I think right now would have to be one of the worst times to buy a home in Denver. Interest rates are expected to inflate housing costs 8% of total loan value next year. The prediction peeps are claiming an addition 7% of housing price increases next year for the Denver area. That would mean a total of 15% increase in price, and I just don't think that will materialise. If the interest rates hikes don't happen, it's because the economy isn't hot, which means prices probably won't rise either.

On the rental side, it looks like prices are staying steady, so I'd think you'd want to continue to rent if you are doing so already here.

Prices for residential real estate do not compensate for rising or falling interest rates.

Economic principles of supply and demand rule. Right now there is more demand, so prices rise.

If you personally need housing, you must make an independent decision whether to pay your mortgage, or someone else’s. If you plan on moving in less than two years it may not make sense to buy.

Colorado’s state office of demography still shows more incoming migration.

[MN_Ski]

Rising Prices =/= Rising home values.

The only reason why the median sale price keeps rising is because there are more luxury homes on the market than lower end homes. That's really it. The MLS data is showing a different story with a large amount of flat prices or price reductions.

I have been passively looking at homes around 375-450K, and many of them have price reductions, or have been relisted some time later at the same price.

I am definitely waiting this one out. I'll get a little more serious come spring time.

[davebarnes]

Originally Posted by MN_Ski

I have been passively looking at homes around 375-450K, and many of them have price reductions, or have been relisted some time later at the same price.
I am definitely waiting this one out. I'll get a little more serious come spring time.

My personal belief is that you are making a mistake.
You are saying that you will buy within 6 months. Barring an overall collapse in the economy, prices will not change that much.
Demand is lower now in the dark of [upcoming] Winter.
Demand will be higher in the Spring.

Making an offer between now and January 1st makes the most sense. Sellers want to feel good during the holidays and selling their house accomplishes that goal. When you make an offer, their agent will tell them: "slow season, you probably won't get any other offers".

[MN_Ski]

Originally Posted by davebarnes

My personal belief is that you are making a mistake.
You are saying that you will buy within 6 months. Barring an overall collapse in the economy, prices will not change that much.
Demand is lower now in the dark of [upcoming] Winter.
Demand will be higher in the Spring.

Making an offer between now and January 1st makes the most sense. Sellers want to feel good during the holidays and selling their house accomplishes that goal. When you make an offer, their agent will tell them: "slow season, you probably won't get any other offers".

Yeah but the current inventory is crap. I feel like it's just bad homeowners trying to make a quick buck to get rid of their bad investment. A lot of stuff out there has been on the market for a while.

If finding a higher quality home means paying an extra 3-5% in Spring, cool.

[illinoisphotographer]

Originally Posted by MN_Ski

Yeah but the current inventory is crap. I feel like it's just bad homeowners trying to make a quick buck to get rid of their bad investment. A lot of stuff out there has been on the market for a while.

If finding a higher quality home means paying an extra 3-5% in Spring, cool.

Right. My friends are moving here in Jan and want to buy. There's only a handful of <$400k houses in the SW burbs

[brown_dog_us]

Originally Posted by MN_Ski

Yeah but the current inventory is crap. I feel like it's just bad homeowners trying to make a quick buck to get rid of their bad investment. A lot of stuff out there has been on the market for a while.

If finding a higher quality home means paying an extra 3-5% in Spring, cool.

You will pay more in the spring when there is more competition for the new inventory, so you will pay 3-5% more for the same level of house. Right now there are sellers that will accept lower offers, but in the spring with more buyers that isn't very likely. Nov-Dec is when there are deals.

[vwgto]

Originally Posted by MN_Ski

Rising Prices =/= Rising home values.

The only reason why the median sale price keeps rising is because there are more luxury homes on the market than lower end homes. That's really it. The MLS data is showing a different story with a large amount of flat prices or price reductions.

I have been passively looking at homes around 375-450K, and many of them have price reductions, or have been relisted some time later at the same price.

I am definitely waiting this one out. I'll get a little more serious come spring time.

Being following the market as well for several months, though at a slightly higher price point. While I realize there is going to be seasonality in Denver, it certainly seems like prices are pulling back a bit. Still expensive, and assume some of the pricing was just too ambitious.

[Phil P]

Originally Posted by 2bindenver

Prices for residential real estate do not compensate for rising or falling interest rates.

Economic principles of supply and demand rule. Right now there is more demand, so prices rise.

If you personally need housing, you must make an independent decision whether to pay your mortgage, or someone else’s. If you plan on moving in less than two years it may not make sense to buy.

Colorado’s state office of demography still shows more incoming migration.

Hahaha, believe that rates don't matter if you will, but for most peoples real estate history, they've lived in a falling 30 year fixed mortgage rate environment, and they extrapolate based off of data from these times. Just sit and watch what happens when the rates go the other way... https://fred.stlouisfed.org/graph/?g=NUh

Basic supply and demand is that when prices rise, demand falls. There's demand for Denver, but that demand is influenced by price, and most people don't drop $600,000 in cash for a house, they use a loan.

Eventually housing will return to a consumable good instead of an investment vehicle, especially as the US population growth rate drops, and it will catch a whole lot of people off guard. Don't know when that will happen, but I'd rather be a new home owner in a place with $250,000 averaged priced homes than $500,000+.

It would really suck to be on the hook for a home you stretched to afford, and then have that home drop in value significantly below what you paid for it. Your stuck in that home until you can find the money to get out. Most every new home buyer in Denver is stretching with prices as they are now.

[LHS79]

Originally Posted by Phil P

Hahaha, believe that rates don't matter if you will, but for most peoples real estate history, they've lived in a falling 30 year fixed mortgage rate environment, and they extrapolate based off of data from these times. Just sit and watch what happens when the rates go the other way... https://fred.stlouisfed.org/graph/?g=NUh

Basic supply and demand is that when prices rise, demand falls. There's demand for Denver, but that demand is influenced by price, and most people don't drop $600,000 in cash for a house, they use a loan.

Eventually housing will return to a consumable good instead of an investment vehicle, especially as the US population growth rate drops, and it will catch a whole lot of people off guard. Don't know when that will happen, but I'd rather be a new home owner in a place with $250,000 averaged priced homes than $500,000+.

It would really suck to be on the hook for a home you stretched to afford, and then have that home drop in value significantly below what you paid for it. Your stuck in that home until you can find the money to get out. Most every new home buyer in Denver is stretching with prices as they are now.

I think we saw this around 2008 and it did not turn out so well!