Denver Housing Slump

You probably heard the latest housing news: the number of homes sold in July plunged a record 27% compared with the same month a year ago. This was far worse than the most pessimistic forecast of economists.

So what does it mean for us here in Denver? It means our housing market’s recovery is not going to happen real soon. But we still are positioned better than most parts of the country. We have less homes on the market and our homes are selling quite a bit faster than most other places. But if you want to be one of the homes that sells you’ve got to have the home looking great and you’ve got to be priced aggressively.

When will it all end? When will we be back to healthy appreciation? My take – it’s all about job creation. Until we get unemployment back down to the 5% range we won’t see any real increase in consumer confidence. When people are concerned about their employment, they lack the confidence they need to take on the housing market. So fewer homes sell and they sell for less money.

But this also means that if you are in a position to buy, this is a great time. Interest rates are at historic lows – I mean, 4.5% for a 30-year fixed? You’ve got to be kidding me! And there definitely are deals to be had out there.

So keep your chin up, Denver. Someday we’ll be back to 7 or 8% appreciation yearly. Let’s just hope it’s sooner than later.