Will there be a housing crash in Colorado in 2020?
Denver/Lakewood: If you’re going to buy a house, if you’re looking to buy a house in 2020 or you’re looking to move within Colorado or specifically in the Denver area you might be wondering if the housing market will crash soon. I mean can this appreciation that we’ve seen over the last several years or really the last 10 years ever since the great recession can this continue? Is it sustainable? Is housing going to keep going up?
Well, you know no one has a crystal ball, but a couple of things to keep in mind, especially with the Denver Metro and the Front Range area, is that this is a very popular place to live. There’s a large influx of people moving here right now. So what that means is housing, like any product, is a supply and demand type situation. There’s just more demand still than there is supply. Builders can’t build homes fast enough to accommodate all the people that want to buy. There’s still not a lot of listing inventory on the market. There’s a little bit more than there was but we’re still short on houses that are listed for sale that you could potentially buy.
From a supply and demand perspective there’s still way more demand than there is supply which is something that drives prices up. Now will this continue? Who knows.
Again, no one has a crystal ball. But the good thing about the Denver metro area specifically in the front range is that we have a wide diversity of different industries right now meaning a diverse economy.
If you look back at Denver in the 80s and earlier we were very focused on basically oil and gas was the biggest industry here and 40, 50% something like that of the economy was tied to oil and gas. I’ve heard statistics that currently there’s not one industry that has more than 10% of the jobs in the front range area so that means that we have a wide diversity of different jobs. There’s a lot of jobs available in the Denver area and that’s going to also continue to drive the economy.
So is it good that housing goes down, if it does go down, no of course not but if you’re not going to sell the house and you’re going to be in the house for the long term housing historically is a very good investment. You’re going to pay down the mortgage over time. And I’ve seen statistics, now I haven’t verified this on the accuracy of this but I’ve seen statistics something like five and a half percent, 5.75% over the last 30 years in the Denver Metro area average appreciation. And that takes into account the terrible years we had in ’07, ’08, ’09 when housing in a lot of areas was going down.
These are just some things to consider. I think housing is always a good investment. If you look at just a rent payment if your rent payments the same as a housing payment the rent payments is just going to the landlord. Whereas the housing payment a portion of that housing payment goes towards paying down the principal balance of your loan so it goes towards equity, it’s like a savings account.
My opinion is that housing is going to continue to be strong maybe not quite as strong as it has been but Denver is a very strong economy with people moving in every single month.We have a positive influx of population so these are indicators that tell me it’s likely that housing will remain stable.
Once again my name is RJ Baxter, Fairway Independent Mortgage. I hope that helps you out.
If you need help with a preapproval on a home loan, we can help you out with that or if you have any questions about the market or whether it’s the right time to buy we’d be happy to answer those questions as well.