What A Year! Dr. Denver Housing Bubble Celebrates Its 1 Year Anniversary With Its Predictions Coming True All Over The Front Range

Dr Denver Housing Celebrates Its One Year Anniversary With More Predictors for Housing 2020

What a year it has been, we started this blog exactly one year ago today to warn homebuyers to wait, sellers to sell immediately and investors to not dump more capital into the metro Denver residential market. Anyone who took our warnings from last year should be thanking us. Home prices in 2018 across the country grew at their slowest pace in four years, while construction has slumped, signaling that the housing market started is starting 2019 in a bad spot. The metro Denver area performed even worse than the country. In the metro Denver area, the average median price for a residential home was $400,000 in February 2018 when we started blogging. Housing inventory was at 4,084 in the same period.

In the most recent data available from January 2019, median prices were $395,000 and inventory was 5,881. Prices were down 1.3% when we started are warnings and inventory has exploded 44% higher as well.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 4.7% in the year ending in December. That was a significant slowdown from more than 6% in 2017 and the index’s worst performance for a calendar year since 2014.

Housing starts dropped 11.2% in December from the prior month to a seasonally adjusted annual rate of 1.078 million, the lowest level in more than two years. Overall, in 2018 single-family housing starts, which measure new-home construction, were up 2.8% in 2018—down from 8.5% growth the prior year. Residential investment subtracted from the growth rate in the first three quarters of 2018.

There are a couple of bright spots. The average rate for a 30-year loan has fallen to 4.35% in recent months, according to Freddie Mac. Wages are now growing around 3%, which should help buyers afford down payments and keep up with the smaller price increases. 

We are laser focused on the release of February’s numbers sometime early in March. This could give us additional insight into how the critical spring 2019 selling season will perform.

We have another prediction for February 2020, median prices will be down almost 5% and inventory will be up around 50%. You can take to the bank if they survive the housing crash.

Leave a Reply

Your email address will not be published. Required fields are marked *