Rates are dropping: Due to inability to get inflation up to Fed’s desired target of 2% – Fed chair Jerome Powell has dropped interest rates to the lowest we’ve seen in years. With that, signs of an inverted yield curve have also been on the horizon (the inverted yield curve is the best indicator of a recession) leading to further talk of increased rate cuts in 2020. The translation of this data in terms of the real estate market: Lower interest rates almost always correlate with lower mortgage rates which always correlate with increased buying power +lower monthly payments — music to a home buyer’s ears.
Inventory is increasing: And also setting records. Like our recent afternoon showers, home choices have also rained down on buyers this month. With almost 9,000 homes for sale, this is the largest inventory we’ve seen since November 2013. In terms of year over year data, we are looking at a 38% increase since June of last year . While not to get exaggeratory in our celebrations and keep things in perspective, during pre-recession there were 26,000 homes on the market. Nonetheless, increased inventory has given buyers an advantage in both home selection and price while discounts become more commonplace.
Days on market is rising: The other side of the ‘increased inventory’ coin. As one may expect, number of days on market is also increasing as the market begins to cool. This year we are currently at an average of 32 days on market compared to last year’s 26. This date is noteworthy while not only representing the speed of the market, but also in indirectly representing the number of price reductions a home may have. Generally, the longer a home sits on the market, the more likely it is to see a discount in price. Again, skewering the market to a buyer’s advantage.
Reason to celebrate or to worry? The catching question. Although there is much more to this query than a few reports of isolated data (while omitting issues of trade wars and avocado tariffs) – it can be conclusivley stated that this data does not represent reason to worry. And yes for buyers, a likely reason for celebration.
On the whole, Denver has exceedingly healthy economy.
Population: Denver saw a net influx of 11,000 people over the course of a year. This is the 9th highest population growth in the country. More people moving here= more demand for housing. As long as the laws of supply and demand exist, this data represents a safeguard against recession, at least in terms of housing.
Attractiveness: US News and World Report Ranked Denve the 2nd best place to live. Hence, why people continue to move here. How could you turn down 300 days of sunshine, blue skies, craft beer, a thriving job market, and snow snowcapped mountains?
Strong job growth: Denver continues to be a hub for H2s, tech firms, and outdoor companies alike while attracting talent from across the country. With that, big companies generally also correlate to big (er) salaries and given the principle what goes around comes around: hello increased tax revenue. To name justa few, several major players in the game include: Aerospace, HomeAdvisor (technology), Love Grown Foods (agriculture), VF Corporation (apparel) Noodles & Company, Qdoba (grub), and of course the ‘duh’ industries of marijuana and Amazon. Denver and Colorado alike have no lacking in economic diversity or demand for a talented work force.