Denver's Real Estate Market - Is it a good time to buy?

On the national front, housing forecasters are saying that prices will bottom out this year, either in the third or fourth quarter. The National Association of Realtors has a more positive outlook, predicting that prices on existing homes will stabilize in the second quarter and rise in during the second half of the year. Economic indicators for 2008 show a steady inflation rate combined with a big increase in GDP (2.1% to 2.8%). Retail, industrial & office vacancy rates are set to decrease while mortgage rates and housing prices will remain consistent.

According to NAR economists the two markets most likely to make the quickest comeback are Denver and Austin. Overall, markets that saw the biggest run-up in prices, like Las Vegas, California and Florida will take longer to recover.

On a local level, the positive indicators are there, as well. A closely watched S & P Case-Shiller Home Price indices (which was released in October 2007) showed 5 consecutive positive months of price movement giving Denver the #1 slot in the nation for home appreciation in July and August. According to Maureen Maitland, an analyst and vice president at Standard and Poor's, "It looks like Denver may be one of the first markets in the turnaround mode." She goes on to say that "Denver real estate stumbled earlier than most cities in the country and in recent years didn't go through the double-digit price appreciation by other formerly hot markets on the coasts and in places such as Phoenix and Las Vegas."

Denver's housing market started its downturn in 2001-2002, but dodged the bubble-burst that many other parts of the country experienced. That is not to say that Denver isn't suffering. We are in our worst real estate market in 10 years, relatively speaking. Our home prices have leveled off and in some cases appreciated, but new home sales and the lower-end market have taken the big hits. As a result of the heavy foreclosure activity in cities around Denver, the subprime problems and adjustable rate mortgages coming due, there has been a surge in inventory and there are good deals to be had. Having said that, spring and summer are historically our strongest months for real estate activity, which means more competition from buyers and a potential increase in property values.

So, is NOW the time to buy? I say "Absolutely!" Property prices are low, money is inexpensive (lower interest rates and an increase in the conforming loan limits should help to spur activity) and spring is just around the corner, which means a potential surge in our market. Some people may want to wait things out due to the overwhelming doom and gloom on the news, but I say if you wait you may end up paying more.