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    The Forecast — and the BIG QUESTION [2019 and the Real Estate Market]

    The answers we have all been waiting for; what’s to come with the housing market in the upcoming year is likely one of the most conversated about and speculative topics out there right now. Although there is no short or precise answer to this question, here are the major predictive takeaways right now (in a nutshell).
    Bubbles
    Despite threats and talks of forlorn bubble burst and recession, in reality  what we will more likely see is a normalized version of a slowed economy reflected in appreciation rates around 3%. Although this number seems as dismal as the interest your earning on your Chase Savings account (in comparison to the double digit growth rates we have been experiencing), it is not a reason to put off buying. Even at this slowed rate, buyers will still be building equity while capitalizing on a still perspectively low interest rate environment. Things to keep in consideration; back in the early 2000’s a 8.5% interest rate was the norm. That said, we are fortunate to see rates still in the 5% range while being on the 7th year of an appreciation bull run.
    Inventory
    In terms of housing inventory, we will likely see even less housing available is 2019 than we did in 2018 due to stagnant sellers. Despite the reality of a higher interests rate environment, the psychology behind it is nonetheless decreasing seller’s motivation to put their homes on the market due to the fact it looks unfavorable to repurchase a new property when current properties are financed at lower rates. This in turn will cause a tighter market for transactions than we witnessed in 2018 and additionally shift purchasing demographics.
    Demographics
    With that, we will see far less first time home buyers in 2019 which made up of 50% of transactions in 2018. In the upcoming year we will instead see the market shift toward move up and repeat buyers due to the fact they have both more equity to work with and are not as swayed by slightly larger monthly payments caused by interest rates — or they are cash heavy and not affected by interest rates all together.
    Economy, Conclusions
    Denver is still a boomtown and our economy is GREAT.  We are growing at about a 5% annual pace putting us at 5th best in the country — with multiple diversified strong economy sectors including tech, real estate, healthcare, and financial. We are also a ‘2nd city’ Mecca with people moving here from other coastal ‘boom’ cities (ei; Seattle, San Francisco, and LA) due to our supple job growth numbers, perspectively lower housing prices, and lighter tax burdens. These factors are keeping our population growth steady, maintaining the economy of supply and demand, and allowing us to thrive is in a growth state built off of diversity. All good news for the future of our housing industry.

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