Now this may be a somewhat unpopular opinion among realtors – who are often all to eager to cheer the market on (after all, it’s how we make money) but I think the Denver Colorado real estate market is, in fact, a real estate bubble. It may not crash down in the same fashion as in 2007, but I think we’re in for some pretty significant price drops in the coming years. Since my cat decided to go moth hunting at 4 in the morning, I’ve decided to make an article and video on the subject while I’m in that hazy, creative, half awake mode.
Why oh why would I, a real estate agent, suggest such a horrid thing? Prices are up! The market is hot! Yes, that all may be true, but I think there are some looming stats that can indicate a potential real estate bubble in the Denver metro area.
I would point you to the following articles that may give you some pause as a buyer in this crazy market .
Denver, northern Front Range real estate party ends in late 2019, new forecast predicts – The Denver Post
While these articles do make the important distinction that we do not have a high number of sub prime mortgages (and resulting foreclosures) as we did during the 2007 crash, a major factor in my opinion that the Denver metro could be a real estate bubble is pretty simple- the prices have soared a lot higher than the wages. The Westword article above is pretty sobering for us millennial first time home buyers.
Another factor that I see coming that could make Colorado a real estate bubble is something that I don’t hear a lot of other realtors talk about – but I actually just took a class on it – and that’s our marijuana boom and future bust. You’ll notice that shortly after Colorado ratified amendment 64, which legalized cannabis in the state, the housing prices soon shot up as well. With the 2016 election, California, Nevada, Massachusetts and Maine have all joined the ‘legal club’ that is going to cut largely into the influx of out of state Americans flocking to Colorado.
Again, this is just like, my opinion, man. I do still think it’s a great time if you’re a seller – and selling now could likely put you near the top of the market if it’s a good option for you or you’re planning on moving. However for buyers, it may be worth waiting a little longer to see if the prices start to drop as the Denver post articles allude to. Time will tell!
If you have any real estate questions or want to talk about buying or selling, give me a call at 720 260 0977.
Until next time,