In our last blog, we considered whether unemployment due to COVID-19 would be a cooling factor to the hot Denver metro housing market. There has been speculation that we could see a 10% decline in home values this spring. However, here are a few factors beyond unemployment that we should consider:
- Supply and Demand – Denver metro inventory is still at record lows.
- Though rising slightly, interest rates continue to be at historic lows.
- Presently more people are moving into Colorado than out. Will this last?
- Millennials have named Colorado the number one most desirable relocation destination. Will this impact the home buying marketplace?
- According to a recent Google study, Colorado is number one in the US for searches related to saving for housing. Other states lead in saving for retirement, education, vacations, and vehicles.
- There appears to be somewhat of an exodus from the populous coastal cites to the Midwest due to COVID-19. Will this become a factor?
- Denver Metro housing prices have appreciated during 4 of the last 5 recessions.
- According to First Alliance Title, in 45 years, we have only seen 4 years where home prices decreased. If you would have purchased a home at the peak of the market in 2007, your home would likely be worth, on average, 57% more today than when you bought it in 2007.
Again, no one can predict with complete accuracy where Denver’s or Colorado’s housing markets will go. There is a significant tug-of-war going on. At this moment, it appears to be a seller’s market, but that could change quickly.
It is a time not to over-react to predictions. Seers of the future are working in an unprecedented environment right now. Carefully evaluate your own needs. That will determine whether or not you can wait until the dust settles in the marketplace.