So many people have asked us if, or when, the bubble will burst or the market will crash here in the Denver area. Home prices have been slowing their rise and we are seeing a lot more price reductions, so it's easy for many to say that it's starting to happen. We don't have a crystal ball, but while the market is changing, we don't believe we are seeing a crash or bubble burst here.
Slowing Market
Not long ago, as the economy was in recovery, we were seeing double-digit yearly appreciation gains in Denver metro home prices. Home prices rose so much that the median surpassed the median wages, so it's not surprising to see a bit of a correction in our market now. Affordability is an important factor for buyers and many are shying away from purchasing when it would take such a big chunk of their income. With this is mind, you can see why home prices might plateau in 2020 or even dip slightly. This could be a really great thing for buyers in our market.
Supply and Demand
There's still the basic question of supply and demand, though. The Denver market still has a shortage of housing inventory for the population we have here, especially considering the continued population increases we are seeing every year. As we all learned in basic economics, a high demand for something in short supply will push prices up. This indicates to us that prices are not likely to drop dramatically, and that they can, in fact, keep rising, even if it's at a slower pace.
The Future
We cannot guarantee what will happen in the market of course, but we love talking real estate, and would be happy to talk over market trends with you at any time. We can even talk specifically about your goals and what might be the best timing for you to make your next move. Just give us a call!