With 2019 coming quickly, it is time for an overview of some of our Colorado housing market predictions. Colorado continues to have low housing inventory, massive population growth from all around the country, and high-interest rates. Attempting to buy or sell a home in or around Colorado can be difficult. The market is hard to navigate, especially for first-time homeowners and first-time renters. Although home buyers may be tempted to rush into buying a house, renting may be the more affordable option.
Below are some market predictions for the coming months in the Colorado housing market:
The U.S. economy has been strong for the last half of the year before reaching its height this summer and ebbing into a mild recession early next year, as predicted by economist Alan Beaulieu, a specialist in long-term economic cycles.
The coming recession may be mild, but could still result in two-quarters of declining gross domestic product. The stock market should correct on its own as well as the Colorado housing market. Colorado is likely to hold up better than most states during the potential coming slowdown. Higher living costs will also complicate the search for workers, making it unaffordable for some to live here. Rising interest rates could further hinder the market in 2018 by reducing affordability. Mortgage rates were predicted to rise in 2017 but actually went lower or stayed the same most of the year.
Fact: Borrowers in Colorado need nearly $80,000 in salary to qualify for a typical home. The Colorado housing market has been deeply impacted by rising interest rates and increased cost of living. Estimates are that home prices have increased 8-10{ec1d25302c0c3e829886c092caa623e779a888dbf9e1057900a08c9ab9a85bb1} each year for multiple years in a row. Surprisingly, the average price of a single-family home in Denver is now over a half million dollars.
Colorado was once a place where you could buy a home in a central neighborhood for less than $350,000. Today that is unheard of in our real estate market. When it comes to housing, general affordability can be a challenge, and monthly rent is likely to offer you more value than buying a house can.
A geographic research and data mining company, Location, Inc., took into account more than 200 different variables to look at housing trends in Denver, Boulder, Greeley, and Ft. Collins. Overall, they predicted that the Colorado housing market will begin to wane in late 2019. Home prices in some areas may drop more than 30 percent. They found that there will be an average drop in housing prices of 9.3 percent over the next five years beginning in late 2019. Those homes are losing value and now is a perfect time to rent.
In 2017 alone, there were 13,000 new apartment units expected to come online in Denver and this increase in inventory has had a positive effect on rent affordability for the people of Colorado. This trend is great news if you are just moving into the Colorado area because it is advisable to rent for six to twelve months before you buy a home anyway.
Homeownership comes with its own set of unique problems. You’re spending a large portion of your savings on a large and looming asset. Taking care of your home can be hard to maintain and it may be extremely difficult to sell. There’s no guarantee that you’ll want to live in the same area in two years, much less that your work or family situation will remain constant.
Unfortunately for most, the Colorado housing market has become unaffordable to many of the state's residents. Hopefully, in 2019, we can bounce back, but if you are looking to rent in Colorado, now may be the perfect time.
Learn more about renting in Colorado by visiting us at www.allpropertyservices.com.
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