2019 is officially here and many are wondering what lies ahead for the Denver real estate market. Pondering whether we will see falling prices and a sudden surge of foreclosures or continued growth and persistence that we've seen for the past several years. I think what is to come may surprise you.
Towards mid to end of 2018 we saw interest rates and total inventory rising which caused many to say correction or start of the downturn. Luckily I don't think we are any major crisis, better yet I think we are on track for a solid year especially in Denver!
Trulia recently came out with their, "Top Ten Housing Markets To Watch in 2019." Number one on the list...Colorado Springs. With many young residents and strong employment growth over the past years Trulia has put Colorado Springs at number one. Without a doubt Denver is impacted by the growth.
Colorado and Denver can also relate to the national market with an increase in total inventory. Just a year ago all kinds of real estate folks were pleading for more active listings and saying prices can't continue to climb like this. Well their call was answered! With more listings we are seeing a slight slow down in prices increasing. More inventory means less bidding wars for buyers especially in the more affordable prices. Many buyers have been hoping for this after being beat out. What hasn't changed much is the amount of people moving into Colorado and Denver. Colorado was recently ranked the 7th fastest growing state in the US with over 80,000 new residents! With companies moving into the state many people are staying employed. Nationally 4% unemployment here in Colorado we are seeing around 2%.
Interest rates were rising through 2018 and experts are predicting another rise in rates. However it isn't nearly as drastic as many would think. Zillow is predicting 5.8% for a 30 year mortgage by the end of 2019. Realtor.com isn't far behind predicting 5.5%. Buyers right now who are wondering whether its a good time to wait or to buy may want to look at how much a rise in interest rates affect how much they will pay. Zillow is also predicting home prices nationally to increase by 3.79% in 2019.
Overall I have a positive view of what 2019 has to bring for Denverites. I'm not the only one who is coming to this conclusion. 100 real estate experts were questioned and 94% said they do not expect any downturn in the housing market this year. Additionally a very interesting fact is that in 5 out of the 6 last recessions home prices actually increased. Since 2008 was the last and closest recession we remember, our minds make us think it will be a repeat of the same thing. Yet things have vastly changed in the lending and real estate world since the previous downturn with certain "safeguards" put into place. Additionally with the population continuing to rise here in Denver, increasing jobs, and a positive national housing market I predict to see prices increase but not nearly at the rate they have been for the past several years. I think we will see somewhere around 5-7% here in the metro area. I also think that buyers who are looking to get into the market should get in if they can. With inventory increasing and interest rates expected to rise again now is a fantastic time. For sellers It always depends on your situation but its still a good time to sell with plenty of buyers looking and historically low interest rates. Buyers are still shopping some may take longer as sticker price may hit them but once they realize rent prices are still comparable to mortgages its a no brainer.
Let's make 2019 a great and prosperous year!
Buildings and Residences Denver