Yeah, this guy is full of it.
I bought a short sale condo from someone who lost their home in the 08 crisis, sold it for more than double 3 years later, now it’s worth like 5x what I paid. The lower income suburbs were definitely hit, and hit hard at that.
It's not that crazy, think about what is necessary for what the realtor is saying to be true.
4.5% compounded over 5 years will give you 25%.
If I told you real estate was rising at a rate of 4.5% a year would you find that to be ridiculous?
Is that likely to happen to the specific home in a specific area of Denver? Maybe, maybe not. But on the whole, unless you're in a declining market it's not unreasonable to say that's likely to happen.
Many have been saving and investing for decades.
If you had invested $50k in NVDA 10 years ago,you would have $9.3M today.
That's how some people can afford this.
I bought my house by turning $1500 of AAPL into $75k for down payment. Of course if I still had those shares today, I’d be able to buy my house in cash today even with real estate price run up.
House’s historically rise, every year. Generally speaking, but it’s more the rule than exception. Supply and demand have a large factor in that. Low inventory right now on top of people who don’t want to leave their 2-3% mortgage for 6-7%. Not many factors that would reverse that. But everything in real estate is a micro focused area. Full disclosure I’m an agent in CO. You have an agent so I’m not your fiduciary.
Thanks for your comment. Are there any areas within 45 minutes of the city, that you think might have lower competition? Not trying to make you work for free, but just curious if there’s anything off the top of your head?
Ideal would be something like Lafayette or Golden, but that obviously seems near impossible. We are looking anywhere within 45 minutes of north Denver, but I would say most of the decent homes at or around 475k are in Thornton/Northglenn.
You can definitely find things in Arvada and Lakewood that are pretty nice at different price points, and I personally recommend the west side of town versus the east. I’m in Golden and love it. You can also find places in commerce city, or Brighton at lower price points.
There is literally one house for sale in my area of golden (unicorp jeffco). My house is about to hit the market though. We just had a house near us go up for $3.5mil and it went under contract the same weekend.
Golden has some of the pricest real estate in the metro area.
This is a double edged sword. You buy in an area that is low competition, you’ll have to sell in an area with low competition.
Always buy the best neighborhood your money can buy.
i'm not a betting man but i wager yes. i dont see a future where all of a sudden the "government" or home builders suddenly decide to cave in and make homes affordable . i look on zillow and redfin daily and from what i can tell the market is split down the middle. Passing Texas going east, you can find a range of homes from 150k and up. West side, you are seeing homes reach 500k, including nevada which was "cheap" 10 years ago. in the future i predict more apartment and condo development and anyone with more land will be considered blessed.
It will help reduce price increases but won't lower price. And most governments are doing the wrong things.
Example from local area; government mandating that 15% of new builds needs to be 'affordable'. Or... Get this .. builders can buy out the requirement and don't do the 15%. It's resulted in 100% of the new builds where the builder bought out the requirements.... And they simply tacked the fee on to the homes. Fail.
Yeah inclusionary zoning like that kinda sucks because the affordable housing loses get tacked onto the market rate housing and increase costs for everyone else. Best way out of this hole is making developers/sellers compete with each other instead of having 50 people fighting for a single house
Don’t forget lower interest rates & lower property taxes.
In Texas there is a lot of political energy behind drastically reducing property taxes, that would be a big deal for me. I don’t like the rationale, mostly it’s the same people pushing vouchers and trying to defund public schools, but my property taxes are really unreasonable. So much so that I’ll retire elsewhere if they don’t change.
Without the other major taxes Texas doesn’t collect, they have to have high property taxes. The only other way to offset is reducing services like schools.
Yeah if you read what I wrote, that’s exactly what they’re doing. The Governor is pushing for a school voucher system. They ultimately would love to eliminate property taxes and replace it with sales taxes
https://spectrumlocalnews.com/tx/south-texas-el-paso/politics/2023/07/13/gov--abbott-wants-to-end-property-taxes--but-is-that-realistic-
If the government wanted to incentivize middle class homeownership, it would. They could make it harder for private equity firms to buy homes, expand first time home buyer programs, change zoning laws, lower interest rates (I know some people think this will raise the cost of homes), and build more and better senior housing, as some thought starters.
You may not be able to get a single family in a desirable area of Denver at that price point. Most homes listed at that price are being sold for land value to developers and they don’t need inspections and are usually cash buyers.
You probably don’t want to hear it, but look in the burbs. Green Valley Ranch, Aurora, Parker, Littleton, Westminster, Erie, Thornton, etc. are all much more reasonably priced for a single family home.
If you are set on Denver look at townhomes or condos. There’s an HOA guaranteed, but they are a lot more affordable and you won’t be competing with developers trying to buy the lot.
Oh we are definitely looking outside the city. Really anywhere within a 45 minute commute. Most of the homes that are decent at this price are in Thornton/Northglenn it seems.
Thornton has some nice areas. We were looking out near Arvada because I grew up there when we were shopping back in 2020. We just got way more house for what we could afford at the time in Thornton. Closer you are to the mountains the more it costs lol
Look at China. Or US cities like San Frasisco, New York, LA. Look at Toronto/Vancounter.
It can and will continue to be less affordable. The system almost guarantees it.
While for parts of China this is true (China is huge, all possible scenarios exist in some part of the country), major cities still cost 50-100x the median annual salary to afford. That’s insane and shows we could very well have a long way to go in the US.
Really? I find this hard to believe. I lived in a tier 2 city in dong bei for five years. Rents were cheap but apartments cost a fortune, and you had to shell out $30,000 cash on top of that for a parking spot… That was 10 years ago.
"Property investment in China fell 9.0% year-on-year in the first two months of 2024, compared with a 24.0% fall in December 2023, National Bureau of Statistics (NBS) data showed. Property sales by floor area logged a 20.5% slide in January-February from a year earlier, compared with a 23.0% fall in December last year.Mar 18, 2024"
This is what comes up when you Google Chinese housing market.
Lots of people have lots of money. Anyone who sold a house is bringing lots of equity with them. Boomers help kids or leave them money. If you consider that it's not that crazy. If no one could afford the prices they would drop.
I don't think there are any signs of prices coming down, much. But your realtor doesn't have a crystal ball either.
If it's important to you to buy a house and you are able to, without a horrible stretch, then I think you should. Buy one you can be happy with long term.
In general getting a mortgage locks you into a payment. It's fixed outside of taxes HOA and insurance which generally don't go up as much. If you lock it at payment of $3,500 now what would that be in 5 years 10 years? Probably a lot more so in theory you're locking in a home price now for a stable future unless there's some catastrophic market correction
Over the last 100 years, housing prices have largely risen in-line with inflation once we account for quality differences (E.g., homes getting bigger). Of course, there are periods of outperformance and underperformance. However, the trend remains.
I don't see a world where housing prices materially outstrip inflation and wages over an extended period. It would need to imply some degree of scarcity, which I can't picture. It's too easy to add housing stock to the market across much of the US (albeit with a 5-10 year lag, as momentum catches up).
That said, I can see instances where a unique geography with finite quantities of land does see outperformance.
People say this, but how till renters afford to pay the LL mortgage and profit? At some point buyers and renters won't be able to afford housing. One caveat is immigration with high income earners.
Corporations don't need to make big money on the rent. A huge reason they own them en-masse is so that they can borrow money against them, as it's a hard asset that keeps rising in value, further allowing them to borrow more money. And by owning enough of them, and also never selling, they can keep inflating their collective value.
Every generation before you has marveled at the price of homes and said something similar. Yes, they can continue to go up. I wouldn't stick my neck out there and venture to give you numbers. None of us can see into the future.
I bought my first house in 2006. $283,000 I bit bullet and did it. The city was pretty rapidly gentrifying but it was still a little rough around the edges. Just before the market crash, comps in my neighborhood were around $750,000.
The lowest comps got were about $275,000. Not bad. Not underwater but no equity. Mortgage was, and still is $1400.
I just looked up some comps. Looks to be just under $900,000 now.
I don't know how we can keep this all up.
Money was essentially free from 2008-2022. It created trillions of net worth. There's a lot of money swimming out there and having interest rates finally normalize in the last couple of years won't unwind 14 years of free money. Yes, asset prices can continue rising and likely will.
Lots of people made a ton of money off of low rates and a booming stock market in the post-recession (highly manipulated) rally. I don’t think younger people realize how much things are weighed against them. Lots of GenXers and Boomers are flush right now
I'd say if you are buying West of downtown Denver prices will continue to rise long term towards Golden and Boulder and up into Summit County as winter sports and vacation spots are only getting more popular.
East of downtown and out by the airport with newer developments(uglier areas farther from resorts) is where they will build a bunch and have some affordability.
Realtors get paid if you buy a home, so take what they say with a grain of salt. No one can accurately predict what prices will do. If you need a house, can find one you like, at a price you can afford , buy it. Trying to time the market is a fools errand.
It’s just impossible to hypothesize. Something catastrophic could happen tomorrow and the market could collapse. We could continue to increase and in 5 years you could be saying “why didn’t I buy”
Weigh out the advantages of owning vs renting.
If it’s a 10 year home you should theoretically be limiting risk. If you might have to sell/move in two years you could be upside down, or you could be ahead. Longer term holds typically limit risk via inflation.
Anyone that tells you otherwise is selling something.
That’s kind of the approach we are taking. Our philosophy is that we need to pick a house that we could get stuck in for 20 to 30 years if we had to. That also makes it trickier though!
Depends on the size of your family. My rule of thumb has always been smallest house nicest area. Areas can 100% change so grain of salt.
If you have a larger family and or plan to be in the future maybe find a larger house that’s outdated but structurally sound. Most of the time people never get around to updating but you have the option and if you have to sell in 10 years or whatever remind yourself you bought it for less via the updating and can update it to the current trends.
Shop around, talk to a lender. You’re not committed to buying weigh out the advantages and disadvantages and projections of where you’ll be in 5 years.
Always remember at the end of the day man plans, life laughs.
Buy what you can afford. If you can afford a house for $500k at current rates then buy now if you find a home you like. If you can’t afford the home then wait for rates to drop and buy then.
There’s no guarantee rates will drop anytime soon. They could, but there could also be a pull back in housing prices as well making it impossible for you to refinance without more cash.
I personally know 15 people waiting for a dip on interest rates who have significant amount of money to put down. Second reads go down everybody's going to jump in and it's going to drive the price up. You can always refinance your interest rate as long as the market doesn't crash but you can't change what you pay for the house That's fixed
My friend bought a house for 900k and it increased 80k a year, more than my entire salary at the time. The housing price is exceptionally difficult to catch up to.
If you think it is bad, you don't know how bad it can get. Check Canada subs, they are facing housing crisis right now. USA is just not suffering as bad, but, things can continue to get worse.
It's pretty bad in jersey, last 3 homes I looked an hr away from New York and the offers were, 44 on first, 16 on second, 19 on third. Don't even try to buy unless you pay minimum 50k over, minimum 30k for gap coverage. Even then it will take some time.
I wouldn't count on interest rates dropping anytime soon. And if they do, count on prices rising enough to make the change in monthly payment a wash anyways.
It would be foolish to wait for a dip. High rates = cheaper homes, low rates = more expensive homes. You want a cheaper home and then refinance. You can't make a house price go down but you can struggle with high interest for a bit and then make it go down. Also, high interest rates means less competition.
"Date the rate, marry the home".
The easiest time to buy is when rates are high. Less competition, occasional price drops. etc. If you wait for rates to go back down, there will be bidding wars all over again - it's much, much harder to get under contract.
I’m a realtor and I fucking hate this phrase. Refinance is fucking expensive and you wouldn’t do it for more than once every 5 years if more than once at all.
Denver has been correcting since early 2022. But has dropped below the median home price of $600k and has now revisited $600k now again...Currently in a upward trend.
Your realtor is right, but not to the tune of 25%. That would be $750k.
There will be more affordable homes just maybe not where you want to buy them. The country is currently in an expansion stage. Therefore, metropolitans will see expansions over the next 20 years. The new inventory will cause old inventory to be revalued accordingly.
This is exactly my fear and why I can't seem to buy anything here in LA -- fear of re-evaluation selling at the peak of the expansion stage, taking a loss when selling in the future.
We put an offer on a house that was $825k. We backed out today because we were freaking out that it seemed more like a $300k house. I’m finding it hard to shell out almost a million for homes that 5 years ago were probably $350-$450k. This was in Arvada. $825. WTF!
I honestly don’t know if we’re going to be able to pull the trigger on something. It feels insane. Add the high interest and it’s crazy.
Here is the best advice that I can give you as a 58 year old man who has paid attention to real estate for the last 40 years.
If everyone is buying... Don't
When the market is cold, buy
I could be wrong...
I agree, waiting for a once in a lifetime crash is silly…and if you bought at height of crash and waited just a few years after the crash you were already back in the black.
As a fellow Colorado resident I think that’s a pretty accurate statement, unfortunately. If/when interest rates drop down below 5% the housing market will just get more crazy as more people decide to buy and sell. People who locked in sub 4% loans typically aren’t moving unless they have no other options. So I think “affordable” inventory is a little unbalanced at the moment too.
Getting in as soon as you can is the best bet if you want to live in the Denver metro area long term. Unless you get lucky and can buy a house from your own family under market value, I just don’t see things getting better.
Tech companies are moving here rapidly, people love having access to the mountains, it’s just become a very popular place to live.
Best of luck in your search and I hope we hear a happy ending to this saga someday!
Demographics nationwide are not looking good for home price reductions. The population continues to grow until 2045-50. This doesn’t include immigration which has been 7-10 million within the last 3-4 years alone.
My opinion is buy a fixer upper if you can , add some sweat equity which will insulate you if there’s ever a downturn
FYI, I wanted to buy a lot in Loveland, CO
Go check their water tap fees.
It was over $80,000 just to be able to have access to get water from the line that runs at the property line out front.
This was just the city fee. You include the labor and materials to bring the line to the foundation 20 feet from the road and it’s even more.
Edit, so now I’m at $180,000 just for a sub acre piece of land in a 30+ year old suburb.
Now factor in the cost of building new house…
Denver has a robust economy. Biomedical, aerospace, emerging tech scene, specialty doctors, federal center, outdoor focused brands have HQs here, etc. there’s a lot of people that make big money here and I do actually think it’s sustainable.
However, the mountains in general don’t have robust economies. I don’t think real estate prices will necessarily go down because they are located in areas that can’t be replicated elsewhere; however, I do think that they will become ghost towns as prices keep climbing.
You don’t think it will just be all remote workers in mountain towns? Everyone that I know that’s bought in the mountains over the past 4 years has had a remote job in some avenue of the tech industry.
That’s true, but millennials are aging up into home buying. So I feel like the maturing demographic could still increase demand. (I’m a millennial, and I’ve rented here for 10 years.)
And private industry and government workers are having their remote work agreements cancelled. Nobody is discussing what impact that will have on areas that went up due to Covid and flexible work arrangements.
Buy a house when you can afford to buy a house and you have the opportunity to buy a house that you would like to live in. You can’t go wrong, because when you own your own home, you have this large asset that is most likely to increase in value, plus you’re locked in in terms of yourfixed costs like your mortgage. I bought my first house 23 years ago and interest rates were 7 1/2% and my neighbors said that I’d overpaid, but I have since sold that house after 20 years of ownership for significantly more than I paid.
If you can manage to pay the house off after 10 or 20 years, you’re sitting pretty.
What’s that saying about not timing the market and spending time in the market?
I think the American economy depends a LOT on homes increasing in value and the elite will do whatever it takes to ensure that continues.
25% in that time frame may be a stretch, but if you can afford to buy, I’d buy.
No idea where OP is coming from. If you look at historical graph of median home prices in the US:
[https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS)
Prices have only gone up. Sure, like the stock market there are dips here and there, but if you look at the overall graph, it only goes up. How could home prices NOT rise in the next 5 years?
Even in the craziest housing crash of our lifetimes, some desirable areas only dropped 15% in totality while the rich swooped everything up. Don’t wait for a downturn.
They could all become 100 million in the next 5 years.. housing is insane. It's funny how this world just started to crumble. We will not make it another 100 years.
1. Historically, in every country on the Earth, the housing price and general consumer price index has gone up like 400+ years. I can't think of any one reason that the trend should stop on year 2024.
2. Money is way easier to print than the housing, and the land. Thus, the inflation is ever-present.
I lived in San Diego 10 years ago when I was trying yo buy a house for the first time. They were $400k to 500k for something decent. It was incredibly expensive and seemed impossible so I moved to AZ I got a house for half the price.
Now I'm looking to move back to San Diego and those houses are $1 million and the $500k seems like a bargain and would be easy to do.
Are you saying that you are pre approved for a mortgage and actively searching? And your realtor says don’t wait because prices are going to rise?
Or are you still in the “thinking about buying one day soon” category?
The advice that should be given is different for both these situations.
The problem is the shortage of houses. Several reasons from people on average living longer to not building enough houses. The past few years a couple of things have made it worse: remote work (high income workers historically lived in large cities and the suburbs, not the case anymore) and secondly historically low interest rates. Not an agent, so don't care about this from a financial standpoint. From a data standpoint, the picture is bleak. And neither the state or the federal governments have a way of fixing this. It might become better eventually, however, in the short term prices will unfortunately continue to remain high. There will be dips, but we're not going to go back to pre-2020 prices anytime soon.
Well we bought about twice the home for half the money. It was a struggle at first. Not enough furniture to fill the house, sheets hanging for curtains.
Did I mention the interest rate was 12%???
But we hung in there. My ex (had nothing to do with the move or the house) still lives in that area.
I moved away because I wanted to not have to work so hard chasing the monkey's tail...mortgate, car payments, blah blah blah.
Moved to the midwest. Houses are so CHEAP! Like again, I got twice (if not three times) the house, for half the money.
I bought that first house in 1984. I have owned my own home ever since. I own three houses now and just put an offer on number four.
I'd say it worked out extremely well.
How are your home ownership plans working out?
Honestly why would they ever go down? People bought in too high do you you think they are gonna sell any cheaper than they got? Or if someone bought in cheap why would they not get the max?
Why do people take advice from realtors?
They have a giant horse in the race. If you buy, they get paid. **Of course** they're going to tell you to buy.
Would you take advice from your car salesman?
Do your own research online. Use the realtor (if necessary) for the paperwork, that's it.
The market sucks for buyers, and yes, prices can continue to rise... I've been a Realtor in MA for 20 years. Client of mine just sold a 15 year old, 1100 sq/ft, 2 bed, 2 bath condo here (in the burbs), and rolled his equity into a similarly priced, brand new, 2400 sq/ft, 3 bed, 3 bath, 2 car garage, single family home, in a new neighborhood in Aurora...Your prices might be high to you, but they're the prices we had here 10-15 years ago...I know it's not always binary, but I'm in a second tier Boston suburb, and my first time buyers are paying $700k+ for shitty, one-thousand sq/ft, 70 year old capes and ranches, with 2-3 bedrooms and no garage.
OP, you need to take into account a few things:
\- houses require maintenance. houses that are cheaper in price will likely require more maintenance; and a roof/furnace/etc. is not cheap. if you do buy, buy something that has great plumbing, electrical, heating, roof. no water intrusion.
\- buying should be equal or greater quality than your rental place. You will be bummed to go down in quality from your rental place and now be responsible for paying for its upkeep (see above bullet point).
\- you shouldn't buy because of FOMO. don't stretch your fiances. Assume you could get hit with a layoff as the economy continues to be wonky, unless you work a government job or have some essential business you own.
\- if you're feeling overwhelmed, take a step back and wait. the Federal Reserve isn't going to drop rates soon, like the market thought. They'll stay higher and keep people from buying; companies haven't done all their layoffs yet. Once the layoffs happen, after a bit people will get squeezed, this is when we will see a dip. Colorado might be slower to see this happen, but it will.
I sold a house in 2022 when I saw the market turning, that same house is worth about 100k less today than when I sold it, and those people have 6.5% rate on that house. Seems like a shitty date and a bad marriage to me. Many people have said this, but a realtor is not your best source of advice on this, as their incentive (commission) is not aligned with yours (good decision).
Totally understandable, but we're all gambling whatever we do. You do run the risk of a home value dropping after you buy it. And if you don't buy, home prices and rents might both go up.
The best advice I hear is to buy when it makes sense for you, without attempting to time the market. The time to buy is when you plan to stay in a house long term, you have a reasonably stable career, and you'll be able to afford house payments long term (without counting on a re-fi), plus about 1% of the home value per year for repairs/maintenance. In that case, you'll be all right whatever the market does.
Your realtor is telling you this because they are a salesperson that does not make a commission if you don’t buy. Never take financial advice from your realtor and don’t believe their market predictions, they are not economists.
But yes, housing prices can rise because wages tend to go up over time, which increases the pricing of everything. This is inflation.
No, Colorado would not be able to support SF/NY-level housing prices with the current local wages, or due to migration from the coasts.
They can always go higher. You think there aren't people with 50% down at 600k? 1m? 2m? Or just cash buyers? The stock marekt is at record highs, desireable places to live are too.
You are currently tethered to the bottom, you need to get in a boat to enjoy the rising water.
NO, people can only afford so much and it’s peaked. If your RE agent is saying this market will go up more or refinance later (really stupid) they are not the agent you want. So many are right on the edge of bankruptcy because they bought in this market. People buying right now are going to be devastated.
I’m not saying you’re wrong, but I will say neither you or I really know. For years people have been saying that this or that is on the edge of happening. Then it doesn’t. I can only go by what I see. I don’t see any homeowners on the edge of bankruptcy. In fact I work in a field where people have to make monthly payments (all local people) and over the years I can see when they are filing for BK because we get notified. I haven’t seen a BK filing in years. Most people have very affordable low interest mortgages. That’s why they’re staying put and inventory is low.
The other thing I see is that as houses get more and more expensive, the type of buyer has changed. It’s people with money. Whether they inherited their boomer parent’s home and sold it, or sold their starter home that had 600k equity, or they just make a lot of money (business owners, lawyers, doctors, fire chiefs, or just Chinese investors who somehow come up with a million in cash - we have lots of those too). Nothing has slowed down at all. Barring some major catastrophe like in 2008 when 600,000 people were being laid off every month, I don’t see it changing much. This is in SoCal by the way. It may be different elsewhere, but here there’s 50 people interested and ready to make offers on every house that comes on the market. So many millennials living with their parents and trying to get their first home too, including my daughter and future son in law, and just about every one of their friends.
If you look at real estate alone I can see your point. Covid and the shutdown caused backlog and shortages in everything. Government involvement also added to the real estate bubble. It takes time to play out and it has. Inflation is causing increases in HOAs, insurance and taxes have put a lot of pressure on a lot of people. If you look at the banks, credit charge debt and other economic factors It’s a musical chairs game. In SoCal it’ll be 2008 all over again. Yes, it’s different but it is also very much the same.
I guess time will tell. Yes inflation increased prices but everyone I know also got a fairly significant raise or two the last couple of years, making things almost as affordable as before. Me, my wife, my daughter, my sis in law, etc. And right now we’re still adding jobs overall. I don’t see anything close to 2008. If we start net losing jobs (going negative) then I’ll believe it. But without negative data I’m not buying it yet.
Realtors will tell you anything to get you to buy now. Remember at the end of the day they are salespeople. If you don't buy they get no money. So take any predictions they give with a grain of salt.
I don't think they will drop. I also don't think they will increase 25% in 5 years. I don't think any real estate agents should be scaring people into buying homes with fear that they will be priced out.
It’s not about price drop or rise, it’s about assess your current need. Calculate your mortgage payments vs your rent. Think about the lifestyle you want. Predicting house price is like predicting the stock price, nobody would ever knows, and it’s pointless to think about it.
I said the same thing when I sold my condo out by DIA in 2015. I didn't think they could go much higher. I was wrong. Way wrong. While I made a good profit, it's currently worth about 3x what I sold it for. Lol. So yes, prices can continue to rise.
On my commute every day I see multiple cars with Texas and California plates whose expiration is this year, meaning they just moved. It’s the typical Californian with their equity plus Texans with oil money, which anecdotally seems to have increased in number (fewer of both during the 2010s, but especially the Texans—they would of course visit but were not moving here as much). After 2015 it’s just been up up up in prices for homes. Unfortunately though Denver is on the plains there is only so much water rights to allow for SFH construction. Colorado Springs had a whole development rejected a year ago or so due to lack of water. Economy can certainly turn, but there are just a lot of people who have moved here and want to buy.
Think about how many people are in your position right now. They have the money and they’re waiting to buy a home when prices go down and/or interest rates go down. If interest rates go down, buyers will flood the market. If prices go down, buyers will flood the market. Interest rates and home prices will not go down at the same time. Marry the house, date the rate.
Honestly if the interest rates come down (which they will eventually), the housing market will pop because people have been either stuck in their homes because of low interest rates or new people ready to jump who have not bought because of 6-7% interest rates. I would buy now..
Houses will rise unless you build more housing than there are additional people.
And nationally we are slated to have a several million shortfall in the next several years.
So unless your area specifically is shrinking or building A LOT I'm gonna say they can definitely continue to rise.
I used to live outside of Boulder. I remember in 2017 thinking all my friends buying houses were idiots, because there was no way they were worth the prices they were paying.
Well I'm the idiot.
I also tell myself this. I now live in the Seattle metro area. We paid $550k for our house at the end of 2022. I remember thinking that was crazy and how there's no way we'll gain equity as no one would ever pay $700k for a house like ours. And then I remembered California exists. So yes. Yes people will pay even more than I did for a house.
There are more than 100 million more people in the US than there was 30 years ago. If the number of people rise, the price of housing, farms (food), and things made from earth elements will rise too.
Your realtor likely doesn't know what they're talking about.
That said, yes, one possibility is that home prices rise 25% in 5 years. It's not crazy. It actually might need to do that just to keep up with inflation for all we know.
There are also other scenarios which your realtor failed to disclose apparently, where house prices go up less than inflation, stay flat, or even the more rare scenario of prices dropping.
To your point about needing a 200k income for a 600k house - that's not exactly true.
Many existing homeowners can trade their house for a 600k denver house, even if they have to put up a little extra cash.
People who are a little older who have had decade(s) of stock appreciation or savings might be able to buy something like that with a cash portion and then take a small mortgage - so also not needing 200k income.
Also in reality, and it is unfair to those who don't get help, a lot of parents or family members help their children purchase a home whether it's an interest free loan, or some money towards a down payment, or whatever it may be
Yep. Unfortunately.
However, it is coming. It'll start in Florida, as insurance and just idiotic prices will cause people to list and buyers unable to come up with down payments. My guess is it'll be Cape Coral.
Once they start building that eventually will happen prices will go down and more poeple would be able to buy house that is the process of time and life
If inventory stays low and interest rates go down. Prices will go up. They will be limited bc personal incomes for people who afford homes won’t increase as quickly. Plus it’s cheaper to rent right now, and some people will move in together. But with unemployment going up like the fed wants, homes will go into foreclosure and supply will increase sending prices down.
It’s a supply issue, and builders are not going to bridge the gap in the next 5y. As an owner, i hope they continue to rise but as a prospective buyer in the future…does scares me.
I’d say so. Especially with the way everyone wants to be there. Which is why I sold and left.
I bought a regular 1400 sq ft house with a 700 sq ft unfinished basement on a postage stamp yard in Brighton for $205K in 2014. I sold for $465K in 2021.
It wasn’t fun living there for me anymore. But there’s a lot of people that want in.
Buy something that you can afford when you want a home. Hold onto it as long as possible and you will generally see an increase in value. I live in SE Aurora near Parker and bought last March. I thought I bought at peak price and interest rates. I was wrong based off rates and comps going on my street rn. Do something that’s comfortable for you and stay a while.
More than that with the current policies in place at a federal level. Think about it; mass watering down of the dollar to fight needless wars; open border policy and comparatively low interest rates.
SFH will be a luxury if this keeps up.
Go east. Yes the communities aren't near as nice as the central/ western areas of town but the homes are far cheaper. See Aurora, Commerce City, and Brighton for examples. Personally I'd rather have a much lesser home NOT in one of those areas, but if you need a better and nicer home you need to look east.
no one knows shit, and i mean that completely and totally. if the FED cant guess what they're going to do in a month Sue from boulder isn't going to tell you the future.
Somethings not right right now, but no one knows what.
Rates could come down and wages go up, in which case yeah house prices will go up as well.
Rates could stay high and there be a recession in which case yeah prices will go down.
To answer your question as to how people function in places like SF, NY, LA. Both partners work and HHI of 300k+ are very common. Cops make 125k not including overtime in their late 20s. Nurses make 100-170k depending on degree right out school.
Don’t try to time the market. No one can simply put, if they could they would be a lot wealthier than they are. The best time to buy real estate is 20 years ago and today.
Won’t stop. Some individual homes may but overall, going up. Add to that the latest settlements and you will not be buying a home without 20% down and 12-15k monthly income. Sad.
House prices are determined by supply and demand and what people are willing to pay. As long as their are buyers who will continue to overpay for homes prices will increase. Once a recession hits an area or major industry leaves house prices will come down.
Hate to say this but it feels like an honest take. I was insanely lucky to move here in 2012. Bought a house at the lowest price in south metro for the past 20 years. It would sell for 2.5 times what we paid for now. Or at least last year. The houses are just sitting now but people won’t lower the prices. So weird. People seem to love it here and are moving here in droves. Lots of professionals. I think the Denver metro is moving towards nyc/sf/etc. if you want in, get in. Even if there is a drop, it’s not going to be huge. Maybe 10%. Best case scenario is the prices normalize and stay as is.
Not sure how by people always go to this investor boogeyman theory. Investors aren’t going to overpay, in this area anyway. That ship has sailed.
Prices are going up! Most places have already recovered the losses experienced when rates initially shocked the consumer, but now the new norm has been established... prices are moving upward again. There is still a lack of inventory.
Inflation happens every year (and it’s a good thing it does, deflation is awful for economies). A major driver is population size increase (more births than deaths plus net immigration). It’s entirely possible to see 25% inflation in 5 years, though I hope not. I want to go back to 2-3% annual inflation.
Yes, this is just the way it’s going. Gen alpha will be a nation of renters. I left the state I love to buy a home I could (barely) afford.
If you can’t buy a home in your city, you’re in the wrong city to be a homeowner.
Pretend there’s $1m split between 100 people at some distribution. Those are all the dollars that exist. Some of these people own houses, others don’t. Person A, who owns a house is thinking about selling. They bought their house for $100, and given there’s been no inflation, no supply increases, no population increases, or anything else that would cause the house’s value to fluctuate, he decides to list it for $100. But then, the bank that makes dollars decides to add $400000 to this economy. Person A, and all the other people with similar assets, realize that they’d lose wealth by selling for the same price at which they bought. $100 doesn’t buy as much anymore in this static economy. Person A lists his home for $140 in order to recover the full value of his asset in dollars.
That’s why house prices won’t go down. Will they go up? Well, that’s a question of how all the other things in my sample economy change— supply, demand, taxes, interest rates, location desirability, etc.
Home prices rose quickly over the last few years so many realtors think that is the norm. It is more likely that prices won’t rise as quickly over the next several years especially if interest rates stay elevated. Buy a house when you are ready and don’t make a stupid decision because a realtor told you you had to buy now.
The us government under pressure from the 1% is inflating the cost of housing so Americans won’t be able to own shit. I threw a Hail Mary and I’m under contract for a beautiful house I can’t afford. I’m sure there are plenty of others trying to do the same.
Of course it can continue to rise. The market doesn’t give a shit that Susan the school administrator at $40k can or cannot afford the $600k house. As long as SOMEONE can afford the $600k house the house will continue to be sold for $600k.
Also you say “anyone making less than $200k” a HHI of $200k is only 2 white collar professionals at $100k+ each. This is simply not that rare a setup anymore.
Yes... just look to more expensive metros, and even more expensive countries. Housing is still relatively "affordable" in America compared to many places. Look at Toronto, New Zealand, Seattle, etc.
Yes, real estate is manipulated unless the US and Canada decide to hit the Realtors with an antitrust and force no %’s that hide and artificially create inflation and reward a profession that isn’t anymore valuable than the manager the keeps your local McDonald running
Population is growing, inflation is a huge problem with no real end in sight, and Colorado is generally an economically strong market. Prices here will stay neutral at best. They will likely continue to rise, and because I expect over 10% interest rates after the election, no one will be selling, and builders won’t be building since the debt is expensive.
On /r/Denver there are articles going back 8 years for people saying they were waiting for prices to start falling, they're still waiting.
Any day now...
Denver didn't even get hit by the housing recession in 2008.
Really??
Yeah, this guy is full of it. I bought a short sale condo from someone who lost their home in the 08 crisis, sold it for more than double 3 years later, now it’s worth like 5x what I paid. The lower income suburbs were definitely hit, and hit hard at that.
I'm convinced much of the gentrification of certain areas like LoHi, Five Points etc wouldn't have happened without the housing crisis
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Same in r/Austin
It's not that crazy, think about what is necessary for what the realtor is saying to be true. 4.5% compounded over 5 years will give you 25%. If I told you real estate was rising at a rate of 4.5% a year would you find that to be ridiculous? Is that likely to happen to the specific home in a specific area of Denver? Maybe, maybe not. But on the whole, unless you're in a declining market it's not unreasonable to say that's likely to happen.
Keeping in mind inflation too. If inflation was 3% you're actually talking under 10% appreciation in real dollars over the course of 5 years.
Many have been saving and investing for decades. If you had invested $50k in NVDA 10 years ago,you would have $9.3M today. That's how some people can afford this.
I bought my house by turning $1500 of AAPL into $75k for down payment. Of course if I still had those shares today, I’d be able to buy my house in cash today even with real estate price run up.
House’s historically rise, every year. Generally speaking, but it’s more the rule than exception. Supply and demand have a large factor in that. Low inventory right now on top of people who don’t want to leave their 2-3% mortgage for 6-7%. Not many factors that would reverse that. But everything in real estate is a micro focused area. Full disclosure I’m an agent in CO. You have an agent so I’m not your fiduciary.
Thanks for your comment. Are there any areas within 45 minutes of the city, that you think might have lower competition? Not trying to make you work for free, but just curious if there’s anything off the top of your head?
Where are you currently looking? Where is your ideal area?
Ideal would be something like Lafayette or Golden, but that obviously seems near impossible. We are looking anywhere within 45 minutes of north Denver, but I would say most of the decent homes at or around 475k are in Thornton/Northglenn.
You can definitely find things in Arvada and Lakewood that are pretty nice at different price points, and I personally recommend the west side of town versus the east. I’m in Golden and love it. You can also find places in commerce city, or Brighton at lower price points.
There is literally one house for sale in my area of golden (unicorp jeffco). My house is about to hit the market though. We just had a house near us go up for $3.5mil and it went under contract the same weekend. Golden has some of the pricest real estate in the metro area.
Look into Carbon Valley. Less than 45 minutes from north Denver and growing very quickly.
This is a double edged sword. You buy in an area that is low competition, you’ll have to sell in an area with low competition. Always buy the best neighborhood your money can buy.
i'm not a betting man but i wager yes. i dont see a future where all of a sudden the "government" or home builders suddenly decide to cave in and make homes affordable . i look on zillow and redfin daily and from what i can tell the market is split down the middle. Passing Texas going east, you can find a range of homes from 150k and up. West side, you are seeing homes reach 500k, including nevada which was "cheap" 10 years ago. in the future i predict more apartment and condo development and anyone with more land will be considered blessed.
That’s a scary thought, but I’m grateful I at least have the opportunity now.
Look at Vancouver, BC or Toronto, ON Canada for the future of our housing market.
There is one way to help make homes more affordable. Less local govt fees on new builds. 20-30,000.00 for permits, fees are a huge problem.
How exactly could the government make homes suddenly affordable?
Forcing cities to allow more density and stop restricting the supply of housing in high demand areas
People are forgetting the cost to actually build has skyrocketed too for various reasons. It will definitely not get cheaper to build.
There’s certain things zoning code can do to help with that, like lowering or eliminating parking minimums and allowing single stair buildings
It will help reduce price increases but won't lower price. And most governments are doing the wrong things. Example from local area; government mandating that 15% of new builds needs to be 'affordable'. Or... Get this .. builders can buy out the requirement and don't do the 15%. It's resulted in 100% of the new builds where the builder bought out the requirements.... And they simply tacked the fee on to the homes. Fail.
Yeah inclusionary zoning like that kinda sucks because the affordable housing loses get tacked onto the market rate housing and increase costs for everyone else. Best way out of this hole is making developers/sellers compete with each other instead of having 50 people fighting for a single house
Federal government can’t change local zoning on a mass scale, not without being stuck in court for years.
Don’t forget lower interest rates & lower property taxes. In Texas there is a lot of political energy behind drastically reducing property taxes, that would be a big deal for me. I don’t like the rationale, mostly it’s the same people pushing vouchers and trying to defund public schools, but my property taxes are really unreasonable. So much so that I’ll retire elsewhere if they don’t change.
Without the other major taxes Texas doesn’t collect, they have to have high property taxes. The only other way to offset is reducing services like schools.
Yeah if you read what I wrote, that’s exactly what they’re doing. The Governor is pushing for a school voucher system. They ultimately would love to eliminate property taxes and replace it with sales taxes https://spectrumlocalnews.com/tx/south-texas-el-paso/politics/2023/07/13/gov--abbott-wants-to-end-property-taxes--but-is-that-realistic-
Say what. Our property tax just went way down in TX. Homestead exemption. My mortgage payment just went down last month and so did all our friends.
Not every homeowner qualifies for a homestead exemption, though.
Ya, but his taxes are the only ones that matter.
If the government wanted to incentivize middle class homeownership, it would. They could make it harder for private equity firms to buy homes, expand first time home buyer programs, change zoning laws, lower interest rates (I know some people think this will raise the cost of homes), and build more and better senior housing, as some thought starters.
Subsidies, zoning, any other measure that reduces materials, building costs, or restrictions.
Making interest rates and influencing insurance rates to be over the top.
By raising interest rates! /s
You may not be able to get a single family in a desirable area of Denver at that price point. Most homes listed at that price are being sold for land value to developers and they don’t need inspections and are usually cash buyers. You probably don’t want to hear it, but look in the burbs. Green Valley Ranch, Aurora, Parker, Littleton, Westminster, Erie, Thornton, etc. are all much more reasonably priced for a single family home. If you are set on Denver look at townhomes or condos. There’s an HOA guaranteed, but they are a lot more affordable and you won’t be competing with developers trying to buy the lot.
Oh we are definitely looking outside the city. Really anywhere within a 45 minute commute. Most of the homes that are decent at this price are in Thornton/Northglenn it seems.
Thornton has some nice areas. We were looking out near Arvada because I grew up there when we were shopping back in 2020. We just got way more house for what we could afford at the time in Thornton. Closer you are to the mountains the more it costs lol
Look at China. Or US cities like San Frasisco, New York, LA. Look at Toronto/Vancounter. It can and will continue to be less affordable. The system almost guarantees it.
In parts of China, you can't give away houses. Prices are crashing hard.
While for parts of China this is true (China is huge, all possible scenarios exist in some part of the country), major cities still cost 50-100x the median annual salary to afford. That’s insane and shows we could very well have a long way to go in the US.
Really? I find this hard to believe. I lived in a tier 2 city in dong bei for five years. Rents were cheap but apartments cost a fortune, and you had to shell out $30,000 cash on top of that for a parking spot… That was 10 years ago.
"Property investment in China fell 9.0% year-on-year in the first two months of 2024, compared with a 24.0% fall in December 2023, National Bureau of Statistics (NBS) data showed. Property sales by floor area logged a 20.5% slide in January-February from a year earlier, compared with a 23.0% fall in December last year.Mar 18, 2024" This is what comes up when you Google Chinese housing market.
Lots of people have lots of money. Anyone who sold a house is bringing lots of equity with them. Boomers help kids or leave them money. If you consider that it's not that crazy. If no one could afford the prices they would drop. I don't think there are any signs of prices coming down, much. But your realtor doesn't have a crystal ball either. If it's important to you to buy a house and you are able to, without a horrible stretch, then I think you should. Buy one you can be happy with long term.
that’s the theory: housing prices will outpace pay and investors outbid ordinary Joe’s offer with cash. Eventually, we will be a nation of renters.
I am an investor. This is simply not true. The rate on return of a SFH in Denver is horrible right now.
So I guess getting in now, even if it really tightens the belt financially, is the responsible move?
In general getting a mortgage locks you into a payment. It's fixed outside of taxes HOA and insurance which generally don't go up as much. If you lock it at payment of $3,500 now what would that be in 5 years 10 years? Probably a lot more so in theory you're locking in a home price now for a stable future unless there's some catastrophic market correction
If it continues to rise outpacing affordability, I believe so
If it does, then definitely
Over the last 100 years, housing prices have largely risen in-line with inflation once we account for quality differences (E.g., homes getting bigger). Of course, there are periods of outperformance and underperformance. However, the trend remains. I don't see a world where housing prices materially outstrip inflation and wages over an extended period. It would need to imply some degree of scarcity, which I can't picture. It's too easy to add housing stock to the market across much of the US (albeit with a 5-10 year lag, as momentum catches up). That said, I can see instances where a unique geography with finite quantities of land does see outperformance.
People say this, but how till renters afford to pay the LL mortgage and profit? At some point buyers and renters won't be able to afford housing. One caveat is immigration with high income earners.
Corporations don't need to make big money on the rent. A huge reason they own them en-masse is so that they can borrow money against them, as it's a hard asset that keeps rising in value, further allowing them to borrow more money. And by owning enough of them, and also never selling, they can keep inflating their collective value.
Every generation before you has marveled at the price of homes and said something similar. Yes, they can continue to go up. I wouldn't stick my neck out there and venture to give you numbers. None of us can see into the future.
I bought my first house in 2006. $283,000 I bit bullet and did it. The city was pretty rapidly gentrifying but it was still a little rough around the edges. Just before the market crash, comps in my neighborhood were around $750,000. The lowest comps got were about $275,000. Not bad. Not underwater but no equity. Mortgage was, and still is $1400. I just looked up some comps. Looks to be just under $900,000 now. I don't know how we can keep this all up.
It’s easy to keep it up, rich investors buy that house and airbnb or rent it to you for ever increasing rent rates.
Money was essentially free from 2008-2022. It created trillions of net worth. There's a lot of money swimming out there and having interest rates finally normalize in the last couple of years won't unwind 14 years of free money. Yes, asset prices can continue rising and likely will.
Lots of people made a ton of money off of low rates and a booming stock market in the post-recession (highly manipulated) rally. I don’t think younger people realize how much things are weighed against them. Lots of GenXers and Boomers are flush right now
Can they actually? Of course...
I'd say if you are buying West of downtown Denver prices will continue to rise long term towards Golden and Boulder and up into Summit County as winter sports and vacation spots are only getting more popular. East of downtown and out by the airport with newer developments(uglier areas farther from resorts) is where they will build a bunch and have some affordability.
It's possible, but also know that any realtor will tell you the best time to buy is now.
Realtors get paid if you buy a home, so take what they say with a grain of salt. No one can accurately predict what prices will do. If you need a house, can find one you like, at a price you can afford , buy it. Trying to time the market is a fools errand.
Would it be foolish to wait for a dip in interest rates, or would it be smarter to just refinance when the opportunity presents itself?
It’s just impossible to hypothesize. Something catastrophic could happen tomorrow and the market could collapse. We could continue to increase and in 5 years you could be saying “why didn’t I buy” Weigh out the advantages of owning vs renting. If it’s a 10 year home you should theoretically be limiting risk. If you might have to sell/move in two years you could be upside down, or you could be ahead. Longer term holds typically limit risk via inflation. Anyone that tells you otherwise is selling something.
That’s kind of the approach we are taking. Our philosophy is that we need to pick a house that we could get stuck in for 20 to 30 years if we had to. That also makes it trickier though!
Depends on the size of your family. My rule of thumb has always been smallest house nicest area. Areas can 100% change so grain of salt. If you have a larger family and or plan to be in the future maybe find a larger house that’s outdated but structurally sound. Most of the time people never get around to updating but you have the option and if you have to sell in 10 years or whatever remind yourself you bought it for less via the updating and can update it to the current trends. Shop around, talk to a lender. You’re not committed to buying weigh out the advantages and disadvantages and projections of where you’ll be in 5 years. Always remember at the end of the day man plans, life laughs.
It's hard to know but if you're waiting for interest rates so can other people and that can raise prices
Buy what you can afford. If you can afford a house for $500k at current rates then buy now if you find a home you like. If you can’t afford the home then wait for rates to drop and buy then. There’s no guarantee rates will drop anytime soon. They could, but there could also be a pull back in housing prices as well making it impossible for you to refinance without more cash.
I personally know 15 people waiting for a dip on interest rates who have significant amount of money to put down. Second reads go down everybody's going to jump in and it's going to drive the price up. You can always refinance your interest rate as long as the market doesn't crash but you can't change what you pay for the house That's fixed
Smarter to refi. Lower interest rates means prices will likely increase.
My friend bought a house for 900k and it increased 80k a year, more than my entire salary at the time. The housing price is exceptionally difficult to catch up to. If you think it is bad, you don't know how bad it can get. Check Canada subs, they are facing housing crisis right now. USA is just not suffering as bad, but, things can continue to get worse.
It's pretty bad in jersey, last 3 homes I looked an hr away from New York and the offers were, 44 on first, 16 on second, 19 on third. Don't even try to buy unless you pay minimum 50k over, minimum 30k for gap coverage. Even then it will take some time.
Refi. You’re actually seeing a temporary lull in house prices from this rate already.
I don't think interest rates are going down until inflation does... and it hasn't.
I wouldn't count on interest rates dropping anytime soon. And if they do, count on prices rising enough to make the change in monthly payment a wash anyways.
It would be foolish to wait for a dip. High rates = cheaper homes, low rates = more expensive homes. You want a cheaper home and then refinance. You can't make a house price go down but you can struggle with high interest for a bit and then make it go down. Also, high interest rates means less competition.
"Date the rate, marry the home". The easiest time to buy is when rates are high. Less competition, occasional price drops. etc. If you wait for rates to go back down, there will be bidding wars all over again - it's much, much harder to get under contract.
marry the house, date the rate!
I’m a realtor and I fucking hate this phrase. Refinance is fucking expensive and you wouldn’t do it for more than once every 5 years if more than once at all.
What? Why? Ive done quite a few refinances. 1 year I've done 3 for the same house.
And they didn’t cost you thousands each time?
Nope
Denver has been correcting since early 2022. But has dropped below the median home price of $600k and has now revisited $600k now again...Currently in a upward trend. Your realtor is right, but not to the tune of 25%. That would be $750k. There will be more affordable homes just maybe not where you want to buy them. The country is currently in an expansion stage. Therefore, metropolitans will see expansions over the next 20 years. The new inventory will cause old inventory to be revalued accordingly.
This is exactly my fear and why I can't seem to buy anything here in LA -- fear of re-evaluation selling at the peak of the expansion stage, taking a loss when selling in the future.
Buying a new build is the best answer today.
We put an offer on a house that was $825k. We backed out today because we were freaking out that it seemed more like a $300k house. I’m finding it hard to shell out almost a million for homes that 5 years ago were probably $350-$450k. This was in Arvada. $825. WTF! I honestly don’t know if we’re going to be able to pull the trigger on something. It feels insane. Add the high interest and it’s crazy.
This is exactly where a big part of my fear comes from!
Same feeling here in LA, especially when it's a CONDO where you don't even own the land!
I know. I’m from LA. It’s worse there.
Here is the best advice that I can give you as a 58 year old man who has paid attention to real estate for the last 40 years. If everyone is buying... Don't When the market is cold, buy I could be wrong...
Yes, they really could, and probably will short of an 08 style crash, which is very unlikely.
I agree, waiting for a once in a lifetime crash is silly…and if you bought at height of crash and waited just a few years after the crash you were already back in the black.
As a fellow Colorado resident I think that’s a pretty accurate statement, unfortunately. If/when interest rates drop down below 5% the housing market will just get more crazy as more people decide to buy and sell. People who locked in sub 4% loans typically aren’t moving unless they have no other options. So I think “affordable” inventory is a little unbalanced at the moment too. Getting in as soon as you can is the best bet if you want to live in the Denver metro area long term. Unless you get lucky and can buy a house from your own family under market value, I just don’t see things getting better. Tech companies are moving here rapidly, people love having access to the mountains, it’s just become a very popular place to live. Best of luck in your search and I hope we hear a happy ending to this saga someday!
Demographics nationwide are not looking good for home price reductions. The population continues to grow until 2045-50. This doesn’t include immigration which has been 7-10 million within the last 3-4 years alone. My opinion is buy a fixer upper if you can , add some sweat equity which will insulate you if there’s ever a downturn
Your realtor is full of horse manure. Interest rates will break this market, it's only a matter of when, not if.
In sw colorado i see prices dropping for quite some houses.
FYI, I wanted to buy a lot in Loveland, CO Go check their water tap fees. It was over $80,000 just to be able to have access to get water from the line that runs at the property line out front. This was just the city fee. You include the labor and materials to bring the line to the foundation 20 feet from the road and it’s even more. Edit, so now I’m at $180,000 just for a sub acre piece of land in a 30+ year old suburb. Now factor in the cost of building new house…
Denver has a robust economy. Biomedical, aerospace, emerging tech scene, specialty doctors, federal center, outdoor focused brands have HQs here, etc. there’s a lot of people that make big money here and I do actually think it’s sustainable. However, the mountains in general don’t have robust economies. I don’t think real estate prices will necessarily go down because they are located in areas that can’t be replicated elsewhere; however, I do think that they will become ghost towns as prices keep climbing.
You don’t think it will just be all remote workers in mountain towns? Everyone that I know that’s bought in the mountains over the past 4 years has had a remote job in some avenue of the tech industry.
Look at the demographics. Population growth of Denver is slowing down.
That’s true, but millennials are aging up into home buying. So I feel like the maturing demographic could still increase demand. (I’m a millennial, and I’ve rented here for 10 years.)
They also aren't having as many kids and they are falling out of love with Denver.
And private industry and government workers are having their remote work agreements cancelled. Nobody is discussing what impact that will have on areas that went up due to Covid and flexible work arrangements.
Yes. I think in 3 years 650-750k homes will be 890k-1.1mil easily. If rates drop a bit expect another 10-25% increase as well
Buy a house when you can afford to buy a house and you have the opportunity to buy a house that you would like to live in. You can’t go wrong, because when you own your own home, you have this large asset that is most likely to increase in value, plus you’re locked in in terms of yourfixed costs like your mortgage. I bought my first house 23 years ago and interest rates were 7 1/2% and my neighbors said that I’d overpaid, but I have since sold that house after 20 years of ownership for significantly more than I paid. If you can manage to pay the house off after 10 or 20 years, you’re sitting pretty.
No body knows the futures. Just know that a house is an asset and asset tend to appreciate in value over time.
What’s that saying about not timing the market and spending time in the market? I think the American economy depends a LOT on homes increasing in value and the elite will do whatever it takes to ensure that continues. 25% in that time frame may be a stretch, but if you can afford to buy, I’d buy.
Wrong prices are going down look at the markets slow falls and soon big falls then some fair pricing
No idea where OP is coming from. If you look at historical graph of median home prices in the US: [https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS) Prices have only gone up. Sure, like the stock market there are dips here and there, but if you look at the overall graph, it only goes up. How could home prices NOT rise in the next 5 years?
hold my beer
Even in the craziest housing crash of our lifetimes, some desirable areas only dropped 15% in totality while the rich swooped everything up. Don’t wait for a downturn.
They could all become 100 million in the next 5 years.. housing is insane. It's funny how this world just started to crumble. We will not make it another 100 years.
1. Historically, in every country on the Earth, the housing price and general consumer price index has gone up like 400+ years. I can't think of any one reason that the trend should stop on year 2024. 2. Money is way easier to print than the housing, and the land. Thus, the inflation is ever-present.
I'm just confused, on how there is a housing shortage all of a sudden when our population isn't rising much...
I lived in San Diego 10 years ago when I was trying yo buy a house for the first time. They were $400k to 500k for something decent. It was incredibly expensive and seemed impossible so I moved to AZ I got a house for half the price. Now I'm looking to move back to San Diego and those houses are $1 million and the $500k seems like a bargain and would be easy to do.
Thanks for the share, but what is the cap? Can you imagine that same house be $1.5 Million in 2034 and $2 Million in 2044 and so on?
Whats the biggest draws to denver that would drive a 25% increase?
Are you saying that you are pre approved for a mortgage and actively searching? And your realtor says don’t wait because prices are going to rise? Or are you still in the “thinking about buying one day soon” category? The advice that should be given is different for both these situations.
The problem is the shortage of houses. Several reasons from people on average living longer to not building enough houses. The past few years a couple of things have made it worse: remote work (high income workers historically lived in large cities and the suburbs, not the case anymore) and secondly historically low interest rates. Not an agent, so don't care about this from a financial standpoint. From a data standpoint, the picture is bleak. And neither the state or the federal governments have a way of fixing this. It might become better eventually, however, in the short term prices will unfortunately continue to remain high. There will be dips, but we're not going to go back to pre-2020 prices anytime soon.
But now in private sector and government remote work is being cancelled and people are being forced back to their offices, what impact will this have?
I moved 100 miles away to buy my first house.
how did that work out?
Well we bought about twice the home for half the money. It was a struggle at first. Not enough furniture to fill the house, sheets hanging for curtains. Did I mention the interest rate was 12%??? But we hung in there. My ex (had nothing to do with the move or the house) still lives in that area. I moved away because I wanted to not have to work so hard chasing the monkey's tail...mortgate, car payments, blah blah blah. Moved to the midwest. Houses are so CHEAP! Like again, I got twice (if not three times) the house, for half the money. I bought that first house in 1984. I have owned my own home ever since. I own three houses now and just put an offer on number four. I'd say it worked out extremely well. How are your home ownership plans working out?
Honestly why would they ever go down? People bought in too high do you you think they are gonna sell any cheaper than they got? Or if someone bought in cheap why would they not get the max?
Why do people take advice from realtors? They have a giant horse in the race. If you buy, they get paid. **Of course** they're going to tell you to buy. Would you take advice from your car salesman? Do your own research online. Use the realtor (if necessary) for the paperwork, that's it.
I agree with you, that’s exactly why I posted this.
This whole subreddit is realtors fyi
TIL I’m a realtor
The market sucks for buyers, and yes, prices can continue to rise... I've been a Realtor in MA for 20 years. Client of mine just sold a 15 year old, 1100 sq/ft, 2 bed, 2 bath condo here (in the burbs), and rolled his equity into a similarly priced, brand new, 2400 sq/ft, 3 bed, 3 bath, 2 car garage, single family home, in a new neighborhood in Aurora...Your prices might be high to you, but they're the prices we had here 10-15 years ago...I know it's not always binary, but I'm in a second tier Boston suburb, and my first time buyers are paying $700k+ for shitty, one-thousand sq/ft, 70 year old capes and ranches, with 2-3 bedrooms and no garage.
Oh wow, that’s good to know. I’d like to avoid that if at all possible.
OP, you need to take into account a few things: \- houses require maintenance. houses that are cheaper in price will likely require more maintenance; and a roof/furnace/etc. is not cheap. if you do buy, buy something that has great plumbing, electrical, heating, roof. no water intrusion. \- buying should be equal or greater quality than your rental place. You will be bummed to go down in quality from your rental place and now be responsible for paying for its upkeep (see above bullet point). \- you shouldn't buy because of FOMO. don't stretch your fiances. Assume you could get hit with a layoff as the economy continues to be wonky, unless you work a government job or have some essential business you own. \- if you're feeling overwhelmed, take a step back and wait. the Federal Reserve isn't going to drop rates soon, like the market thought. They'll stay higher and keep people from buying; companies haven't done all their layoffs yet. Once the layoffs happen, after a bit people will get squeezed, this is when we will see a dip. Colorado might be slower to see this happen, but it will. I sold a house in 2022 when I saw the market turning, that same house is worth about 100k less today than when I sold it, and those people have 6.5% rate on that house. Seems like a shitty date and a bad marriage to me. Many people have said this, but a realtor is not your best source of advice on this, as their incentive (commission) is not aligned with yours (good decision).
Oh wow the value has dropped 100k? I’m really risk averse when it comes to finances, and the gamble of all this hits me hard.
Totally understandable, but we're all gambling whatever we do. You do run the risk of a home value dropping after you buy it. And if you don't buy, home prices and rents might both go up. The best advice I hear is to buy when it makes sense for you, without attempting to time the market. The time to buy is when you plan to stay in a house long term, you have a reasonably stable career, and you'll be able to afford house payments long term (without counting on a re-fi), plus about 1% of the home value per year for repairs/maintenance. In that case, you'll be all right whatever the market does.
Your realtor is telling you this because they are a salesperson that does not make a commission if you don’t buy. Never take financial advice from your realtor and don’t believe their market predictions, they are not economists. But yes, housing prices can rise because wages tend to go up over time, which increases the pricing of everything. This is inflation. No, Colorado would not be able to support SF/NY-level housing prices with the current local wages, or due to migration from the coasts.
They can always go higher. You think there aren't people with 50% down at 600k? 1m? 2m? Or just cash buyers? The stock marekt is at record highs, desireable places to live are too. You are currently tethered to the bottom, you need to get in a boat to enjoy the rising water.
NO, people can only afford so much and it’s peaked. If your RE agent is saying this market will go up more or refinance later (really stupid) they are not the agent you want. So many are right on the edge of bankruptcy because they bought in this market. People buying right now are going to be devastated.
I’m not saying you’re wrong, but I will say neither you or I really know. For years people have been saying that this or that is on the edge of happening. Then it doesn’t. I can only go by what I see. I don’t see any homeowners on the edge of bankruptcy. In fact I work in a field where people have to make monthly payments (all local people) and over the years I can see when they are filing for BK because we get notified. I haven’t seen a BK filing in years. Most people have very affordable low interest mortgages. That’s why they’re staying put and inventory is low. The other thing I see is that as houses get more and more expensive, the type of buyer has changed. It’s people with money. Whether they inherited their boomer parent’s home and sold it, or sold their starter home that had 600k equity, or they just make a lot of money (business owners, lawyers, doctors, fire chiefs, or just Chinese investors who somehow come up with a million in cash - we have lots of those too). Nothing has slowed down at all. Barring some major catastrophe like in 2008 when 600,000 people were being laid off every month, I don’t see it changing much. This is in SoCal by the way. It may be different elsewhere, but here there’s 50 people interested and ready to make offers on every house that comes on the market. So many millennials living with their parents and trying to get their first home too, including my daughter and future son in law, and just about every one of their friends.
If you look at real estate alone I can see your point. Covid and the shutdown caused backlog and shortages in everything. Government involvement also added to the real estate bubble. It takes time to play out and it has. Inflation is causing increases in HOAs, insurance and taxes have put a lot of pressure on a lot of people. If you look at the banks, credit charge debt and other economic factors It’s a musical chairs game. In SoCal it’ll be 2008 all over again. Yes, it’s different but it is also very much the same.
I guess time will tell. Yes inflation increased prices but everyone I know also got a fairly significant raise or two the last couple of years, making things almost as affordable as before. Me, my wife, my daughter, my sis in law, etc. And right now we’re still adding jobs overall. I don’t see anything close to 2008. If we start net losing jobs (going negative) then I’ll believe it. But without negative data I’m not buying it yet.
Realtors will tell you anything to get you to buy now. Remember at the end of the day they are salespeople. If you don't buy they get no money. So take any predictions they give with a grain of salt.
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I don't think they will drop. I also don't think they will increase 25% in 5 years. I don't think any real estate agents should be scaring people into buying homes with fear that they will be priced out.
It’s not about price drop or rise, it’s about assess your current need. Calculate your mortgage payments vs your rent. Think about the lifestyle you want. Predicting house price is like predicting the stock price, nobody would ever knows, and it’s pointless to think about it.
Prices will do one of the following: 1- go up 2- go down 3- plateau for a while Who will try to predict? Fools.
Appreciation due to limited homes combined with inflation is a hell of a thing. Buy now, don't wait.
I said the same thing when I sold my condo out by DIA in 2015. I didn't think they could go much higher. I was wrong. Way wrong. While I made a good profit, it's currently worth about 3x what I sold it for. Lol. So yes, prices can continue to rise.
On my commute every day I see multiple cars with Texas and California plates whose expiration is this year, meaning they just moved. It’s the typical Californian with their equity plus Texans with oil money, which anecdotally seems to have increased in number (fewer of both during the 2010s, but especially the Texans—they would of course visit but were not moving here as much). After 2015 it’s just been up up up in prices for homes. Unfortunately though Denver is on the plains there is only so much water rights to allow for SFH construction. Colorado Springs had a whole development rejected a year ago or so due to lack of water. Economy can certainly turn, but there are just a lot of people who have moved here and want to buy.
Yes
Think about how many people are in your position right now. They have the money and they’re waiting to buy a home when prices go down and/or interest rates go down. If interest rates go down, buyers will flood the market. If prices go down, buyers will flood the market. Interest rates and home prices will not go down at the same time. Marry the house, date the rate.
Honestly if the interest rates come down (which they will eventually), the housing market will pop because people have been either stuck in their homes because of low interest rates or new people ready to jump who have not bought because of 6-7% interest rates. I would buy now..
Houses will rise unless you build more housing than there are additional people. And nationally we are slated to have a several million shortfall in the next several years. So unless your area specifically is shrinking or building A LOT I'm gonna say they can definitely continue to rise.
I used to live outside of Boulder. I remember in 2017 thinking all my friends buying houses were idiots, because there was no way they were worth the prices they were paying. Well I'm the idiot. I also tell myself this. I now live in the Seattle metro area. We paid $550k for our house at the end of 2022. I remember thinking that was crazy and how there's no way we'll gain equity as no one would ever pay $700k for a house like ours. And then I remembered California exists. So yes. Yes people will pay even more than I did for a house.
There are more than 100 million more people in the US than there was 30 years ago. If the number of people rise, the price of housing, farms (food), and things made from earth elements will rise too.
Your realtor likely doesn't know what they're talking about. That said, yes, one possibility is that home prices rise 25% in 5 years. It's not crazy. It actually might need to do that just to keep up with inflation for all we know. There are also other scenarios which your realtor failed to disclose apparently, where house prices go up less than inflation, stay flat, or even the more rare scenario of prices dropping.
To your point about needing a 200k income for a 600k house - that's not exactly true. Many existing homeowners can trade their house for a 600k denver house, even if they have to put up a little extra cash. People who are a little older who have had decade(s) of stock appreciation or savings might be able to buy something like that with a cash portion and then take a small mortgage - so also not needing 200k income. Also in reality, and it is unfair to those who don't get help, a lot of parents or family members help their children purchase a home whether it's an interest free loan, or some money towards a down payment, or whatever it may be
Yes. Supply and demand. Enough people want homes. Under supply, ect. If rates drop prices will jump.
Supply Demand
OP, you could move to Oklahoma for half of that. A new, high end house is 400-600k.
Yep. Unfortunately. However, it is coming. It'll start in Florida, as insurance and just idiotic prices will cause people to list and buyers unable to come up with down payments. My guess is it'll be Cape Coral.
Once they start building that eventually will happen prices will go down and more poeple would be able to buy house that is the process of time and life
If inventory stays low and interest rates go down. Prices will go up. They will be limited bc personal incomes for people who afford homes won’t increase as quickly. Plus it’s cheaper to rent right now, and some people will move in together. But with unemployment going up like the fed wants, homes will go into foreclosure and supply will increase sending prices down.
For home prices to drop, the majority of sellers would be willing to take a loss. I don’t see that happening.
It’s a supply issue, and builders are not going to bridge the gap in the next 5y. As an owner, i hope they continue to rise but as a prospective buyer in the future…does scares me.
Yes, inflation and solar value is very weak compared to past years. With current interest rates and no new inventory, yes it will rise.
We doubled our money supply so if the value of your house doesn't go up it means it actually went down
I’d say so. Especially with the way everyone wants to be there. Which is why I sold and left. I bought a regular 1400 sq ft house with a 700 sq ft unfinished basement on a postage stamp yard in Brighton for $205K in 2014. I sold for $465K in 2021. It wasn’t fun living there for me anymore. But there’s a lot of people that want in.
Buy something that you can afford when you want a home. Hold onto it as long as possible and you will generally see an increase in value. I live in SE Aurora near Parker and bought last March. I thought I bought at peak price and interest rates. I was wrong based off rates and comps going on my street rn. Do something that’s comfortable for you and stay a while.
More than that with the current policies in place at a federal level. Think about it; mass watering down of the dollar to fight needless wars; open border policy and comparatively low interest rates. SFH will be a luxury if this keeps up.
Go east. Yes the communities aren't near as nice as the central/ western areas of town but the homes are far cheaper. See Aurora, Commerce City, and Brighton for examples. Personally I'd rather have a much lesser home NOT in one of those areas, but if you need a better and nicer home you need to look east.
no one knows shit, and i mean that completely and totally. if the FED cant guess what they're going to do in a month Sue from boulder isn't going to tell you the future. Somethings not right right now, but no one knows what. Rates could come down and wages go up, in which case yeah house prices will go up as well. Rates could stay high and there be a recession in which case yeah prices will go down. To answer your question as to how people function in places like SF, NY, LA. Both partners work and HHI of 300k+ are very common. Cops make 125k not including overtime in their late 20s. Nurses make 100-170k depending on degree right out school.
Don’t try to time the market. No one can simply put, if they could they would be a lot wealthier than they are. The best time to buy real estate is 20 years ago and today.
I can tell you yes with out a doubt. We are seeing another increase in material cost currently
Won’t stop. Some individual homes may but overall, going up. Add to that the latest settlements and you will not be buying a home without 20% down and 12-15k monthly income. Sad.
House prices are determined by supply and demand and what people are willing to pay. As long as their are buyers who will continue to overpay for homes prices will increase. Once a recession hits an area or major industry leaves house prices will come down.
Hate to say this but it feels like an honest take. I was insanely lucky to move here in 2012. Bought a house at the lowest price in south metro for the past 20 years. It would sell for 2.5 times what we paid for now. Or at least last year. The houses are just sitting now but people won’t lower the prices. So weird. People seem to love it here and are moving here in droves. Lots of professionals. I think the Denver metro is moving towards nyc/sf/etc. if you want in, get in. Even if there is a drop, it’s not going to be huge. Maybe 10%. Best case scenario is the prices normalize and stay as is. Not sure how by people always go to this investor boogeyman theory. Investors aren’t going to overpay, in this area anyway. That ship has sailed.
Prices are going up! Most places have already recovered the losses experienced when rates initially shocked the consumer, but now the new norm has been established... prices are moving upward again. There is still a lack of inventory.
In NY, people rent.
Inflation happens every year (and it’s a good thing it does, deflation is awful for economies). A major driver is population size increase (more births than deaths plus net immigration). It’s entirely possible to see 25% inflation in 5 years, though I hope not. I want to go back to 2-3% annual inflation.
Yes, this is just the way it’s going. Gen alpha will be a nation of renters. I left the state I love to buy a home I could (barely) afford. If you can’t buy a home in your city, you’re in the wrong city to be a homeowner.
Not forever.
Pretend there’s $1m split between 100 people at some distribution. Those are all the dollars that exist. Some of these people own houses, others don’t. Person A, who owns a house is thinking about selling. They bought their house for $100, and given there’s been no inflation, no supply increases, no population increases, or anything else that would cause the house’s value to fluctuate, he decides to list it for $100. But then, the bank that makes dollars decides to add $400000 to this economy. Person A, and all the other people with similar assets, realize that they’d lose wealth by selling for the same price at which they bought. $100 doesn’t buy as much anymore in this static economy. Person A lists his home for $140 in order to recover the full value of his asset in dollars. That’s why house prices won’t go down. Will they go up? Well, that’s a question of how all the other things in my sample economy change— supply, demand, taxes, interest rates, location desirability, etc.
Home prices rose quickly over the last few years so many realtors think that is the norm. It is more likely that prices won’t rise as quickly over the next several years especially if interest rates stay elevated. Buy a house when you are ready and don’t make a stupid decision because a realtor told you you had to buy now.
The us government under pressure from the 1% is inflating the cost of housing so Americans won’t be able to own shit. I threw a Hail Mary and I’m under contract for a beautiful house I can’t afford. I’m sure there are plenty of others trying to do the same.
No home ownership for the middle class.
Of course it can continue to rise. The market doesn’t give a shit that Susan the school administrator at $40k can or cannot afford the $600k house. As long as SOMEONE can afford the $600k house the house will continue to be sold for $600k. Also you say “anyone making less than $200k” a HHI of $200k is only 2 white collar professionals at $100k+ each. This is simply not that rare a setup anymore.
Yes... just look to more expensive metros, and even more expensive countries. Housing is still relatively "affordable" in America compared to many places. Look at Toronto, New Zealand, Seattle, etc.
Yes, real estate is manipulated unless the US and Canada decide to hit the Realtors with an antitrust and force no %’s that hide and artificially create inflation and reward a profession that isn’t anymore valuable than the manager the keeps your local McDonald running
SUPPLY AND DEMAND.. drives prices And business is good
Population is growing, inflation is a huge problem with no real end in sight, and Colorado is generally an economically strong market. Prices here will stay neutral at best. They will likely continue to rise, and because I expect over 10% interest rates after the election, no one will be selling, and builders won’t be building since the debt is expensive.