Denver Real Estate Bubble

Dated: September 26 2018

Views: 386

Identifying and examining the Denver real estate has a contrasting point of view between individuals. Some presentation of realities and beliefs will be analyzed in relation to the present day situation in the first two paragraphs below.

 In accordance with the S&A Case-Shiller Index, Denver housing prices did not only far-exceeded the price bubble in 2007 but have had a continuous increase. This price increase or rise is as a result of lack of home inventory. There is a limited supply to meet up with the demand required, and it is more particular with the middle class. A balanced market, it is always perceived as having a six months availability inventory. But, it is not the case with Denver as it is having a supply, or availability of inventory, in just two months or less. Therefore, this helps the Denver real estate market to go up further.

The experience of a limited supply of rental assets have pushed renters toward buying. It should be noticed that rental rates in the Denver area have doubled as fast as wages. This has pushed potential buyers into the real estate market, generating additional rivalry for limited inventory. Perhaps this is one of the reasons why Denver real estate bubble.

The future of commercial real estate on the Denver bubble

Illustrating the housing bubble in the United States in 2008, diverse cities experienced a significant impact on countless levels and periods. While many cities had higher homepricing of about 80% which further led to a crash, Denver maintained a moderate home pricing at ten percent only, which didn’t make Denver feel the depth of the crisis. Since no individual is able to forecast the future, and with the flourishing Denver commercial real estate market, a sudden collapse on its bubble is highly unlikely to happen. This is because, its annual sales and sales in price growth have had stable growth levels, which places no reason of thinking about a collapse.

The rapid change of the city as an inland west’s destination has caused a spike in property values for relocators. With a result of a five-year annual net migration which currently stands at 20,000, with a percentage of high payment technology, science, and engineering jobs gives Denver an employment rate of 97.6%. Therefore a limited supply in housing inventory to keep with the demands which automatically create space for the Denver real estate market bubble. As demand drives prices higher and low supply rises home values, Denver will continue to have a strong housing market until there is a significant change between the supply and demand.

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Richard Bradley

Richard Bradley specializes in residential real estate sales and property management services. I am committed to helping homeowners, buyers & investors with their real estate needs. I spend my time in....

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