“Will this Denver real estate market crash? ” That’s the most commonly asked question I am answering for my clients these days. So, I thought’s share my answer with this All Denver Real Estate Blog.
Only 2 Real Estate Crashes in 50 Years
Over the past 50 years real estate values in Denver have risen on average by 6.3% a year. Twice in those 50 years, the market has lost value. The first was from 1987 to 1989, when the Denver market lost about 10% across the board. During these years, the Denver economy was highly dependent on oil, gas and mining which all went through a large-scale reduction. Simultaneously, the Savings and Loan crises unfolded due in part to risky, low or no down payment loans and adjustable-rate mortgages. Adding to this was a 3-year run, prior to the fall, of both residential and commercial builders overbuilding relative to the demand.
Signs of Denver Real Estate Market Crash
In both previous market declines, the above warning signs were showing for at least 2 years prior to falling prices. Currently, builders are able to construct less than half the homes they can sell in any given month. Largely due to the labor shortage, they have no hope of increasing their output in the foreseeable future. Also, the average down payment of a homebuyer today is 17% of purchase prices. Because, 20% of purchases over the past eight years have been all Cash! That shocks me too!
Good Reasons to Still Consider a Move
Need More Space – Less Space – Different Layout – Relocating To Another State Or To The Other Side Of Town? Whether you are considering a move to an existing property or a new build, attached or detached living, we know the locations! We also have a nationwide network of trusted brokers to assist in relocations out of Denver. Please contact us early in your thought process to maximize options and minimize costs. Just use the form below to contact us.