FROM OUR BLOG
January 22, 2016

Toward the end of 2015 and into 2016, some have had concerns that Denver could be approaching a housing bubble.

We asked expert Broker Dan Lucchesi for his insights on the Denver real estate market and his outlook for the year to come.
 
Will Denver see a housing bubble?
 
“I don’t think there is a bubble here in Denver. It is supply and demand at its simplest.
People keep moving here, and demand is just outpacing supply. However, the market has cooled off a little since last winter, which I think is good. Supply is getting a little better since people know it’s a great time to sell, thus increasing supply to meet demand. When they are in balance, a market should see relatively flat pricing.
 
Obviously, outside factors like affordable financing does drive demand up. The Fed has finally started to raises rates a little. They can only raise rates 0.25% per quarter, which they did last quarter for the first time. As they raise rates this should help push demand towards balance with supply.
 
As I predicted last year, the rapid increase in pricing has slowed. Homes are on the market a little longer these days than a year ago.
I personally feel these are good signs. Some people see it as the market slowing as support of all the doomsday bubble projectors.
 
While I totally agree that there are some red flags in the national market here and there, it is important to remember that real estate is made up of local markets. There is no such thing as the “national market” in a practical context. Denver has a very strong influx of people (demand for housing) and still somewhat limited supply. The Fed is moving in the right direction, given the increase in home sales and mortgage fundings.
 
I’ll be watching for Denver home builders starting to overbuild (supply outpacing demand), which will partially be observed by new home pricing remaining flat and sitting on the market for more than say 60-90 days.
I am not yet worried about the market collapsing. Supply and demand…”
 
Dan Lucchesi, MSRECM
Total Realty Advisors
(303) 999-1586 | dan@totalrealtyadvisors.com

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Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Regulated in Colorado by the Division of Real Estate #988320. To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.