Denver Housing Bubble (Aurora, Broomfield: homes, neighborhoods, to buy)

[TCHP]

Originally Posted by sheerbliss

Speaking of starting points, I linked to a page with Case-Schiller's graph going back to the 90s--the EIGHTEEN nineties. And yes, it starts with an index of 100 (not 0) as economic indices typically do, Mr. Investor Relations.

Tangentially speaking of bubbles, I can recall reading a bit about the Leadville silver boom in the 1870s where some properties were selling for so much that when the market crashed in 1883, some of those prices were not seen again for another 110 years.

Now that's a bubble...

[MN_Ski]

I wonder if Denver could experience what is currently happening to Cape Town. Crazy double digit appreciation currently hitting the brakes due to the drought with no relief in sight. While the question of a bubble is still debatable, they are running a huge risk of a catastrophic collapse.

Personally, my opinion on Denver's bubble is always changing by the day. I'm still going to try to buy this year because I know that in the long run, even if it's not for 10 or so years, I'll still come out ahead. But I'm kind of expecting to see a correction right after I buy...and I know I'll be kicking myself for it.

There is also this:
190,000 People Moved OUT of CO Last Year

[Mike from back east]

Going by the numbers in the Case-Shiller Index, it appears housing prices are at bubble levels in many cities. This article in Seeking Alpha has a number of charts showing home prices in quite a few cities have reached the same level as the prior housing bubble that led us into the Great Recession (GR).

This article will only be available for a short time before it's viewership reverts to paid subscribers only.

The charts bear out that Denver didn't have a huge run-up seen in other cities before the GR, but the charts do show that Denver prices are now 50% higher than were prices before the GR.

[Count David]

Originally Posted by Mike from back east

Going by the numbers in the Case-Shiller Index, it appears housing prices are at bubble levels in many cities. This article in Seeking Alpha has a number of charts showing home prices in quite a few cities have reached the same level as the prior housing bubble that led us into the Great Recession (GR).

This article will only be available for a short time before it's viewership reverts to paid subscribers only.

The charts bear out that Denver didn't have a huge run-up seen in other cities before the GR, but the charts do show that Denver prices are now 50% higher than were prices before the GR.

So you're saying it's time to sell?

[Mike from back east]

Originally Posted by Count David

So you're saying it's time to sell?

It may be time to sell for some home owners, but it depends on their situation.

If a Denver home owner is sitting on major home price appreciation AND looking to retire to go elsewhere then now is a good time to do just that -- cash out and go.

Buyers will have to think twice about buying now, prices are high and it appears we are at the late stages in housing price appreciation so if they buy now and the bubble deflates or bursts then they are underwater for years to come.

I think we've another year to run before the pain is felt, but who knows for sure, it could start tomorrow or it could start several years out. Unforeseen events here or abroad, aka "black swan" events, could wreck markets around the world at any time, though not very likely.

[Quietude]

Originally Posted by Willy702

Is that what this so called writer thinks is supposed to happen?

No, s/he thinks there was a deadline, so Oh My GOD IT'S ECONOMICS!

[bluescreen73]

It's too bad a certain user who only posts when he sees "Denver housing bubble" appears to be on double-secret probation. It's gotta be killing him that Mike revived this thread and he can't jump on it.

[Willy702]

So houses (or any asset) can never be at all time highs without being a bubble? If half the world is thinking about and talking about a bubble, its probably not a bubble. When the skeptics convert to being positive, then you get bubbles.

[Count David]

Originally Posted by Mike from back east

If a Denver home owner is sitting on major home price appreciation AND looking to retire to go elsewhere then now is a good time to do just that -- cash out and go.

We're thinking of doing that to downshift (nowhere near retirement, and in theory we could work from anywhere).

I was going to put it at a stop-gain of double what we owe (which could not be that far off), but we'll see.

[Mike from back east]

The bubble aspect coincides with tax cuts for the wealthy that are not needed. Such tax cuts create tons of easy money that floods various markets looking for a return on investment. Stock and housing markets are primary recipients of this dynamic as cash chases hard assets. The tax cuts in 2001 also put a lot money out there and recent tax cuts are a repeat which will end the same way next year. Another tipoff that things are getting bubbly is sky high prices for works of art, which I've seen lately.

If there were no recent tax cuts and money was put into infrastructure there'd be a lot more money in the hands of working people to support housing prices, but the bulk of the money went to the very wealthy who just park it in stocks and rental properties which drives up the price of each and then one day the music stops.