Is Denver's Bubble About to Burst?
I get asked the question, “Is Denver’s bubble going to burst?” All. The. Time.
Between random articles on social media and your friend’s uncle who “understands the economy,” there is a lot of conflicting information out there. Each month I read a new headline about the bubble bursting, and each month it gets thousands of shares.
And while I can’t predict the future, I do believe that the Denver housing marketing is secure and poised for continuous growth.
Frontgate Realty experienced the 2008 bubble, survived, and came out on the other side with a deep understanding of the events and circumstances that caused it. Based on that experience, plus the past ten years of helping Denver locals buy and sell homes, a bubble-bursting seems implausible at this time.
Why The Rumors?
As mentioned above, there are countless articles about Denver’s bubble. While most of these articles actually support the strong Denver real estate market, many readers simply scan the headline and assume the worst. This isn’t completely your fault; news articles design their headlines to evoke a reaction (and a click).
But it’s important to understand where these rumors come from.
Denver has experienced massive home price increases over the past decade, but there is no burstable bubble in site. Instead, Denver’s home prices have steadily risen without much volatility. And as more businesses and professionals move to Denver, we expect home prices to keep growing.
In other words, while the growth is parallel to the 2008’s financial crisis, the likelihood of default is extremely low--and defaulting is what caused the bubble to burst ten years ago.
Why It’s Still a Good Time To Buy
If you’re suddenly feeling more confident in Denver’s strong housing marketing, it might be the perfect time to buy! Here’s why:
Rents Are Sky High: This is especially true for luxury apartment homes. Today’s median rental rate is over $2,000; for luxury homes and condos with 3 bedrooms or more, expect $3.5K+ monthly.
Interest Rates are still relatively low: While the Fed did increase interests rates in 2018, they are still low compared to historical rates. View today’s interest rates here.
Healthy Inventory: Denver’s cooldown has increased the amount of available inventory. Buyers have more options in more neighborhoods across Denver.
Investment Opportunities: Denver’s 2019 prices are projected to grow at a rate of 7.3 percent.
Control Your Living Space: Besides the financial reasons to purchase a home, one of the most important parts is controlling your living space, designing it to your fabulous tastes, and living in your own property for years to come.
If you’d like to buy a home in Denver, contact Frontgate Realty. We buy, sell, and partner with AJ Kirkegaard to remodel or build homes from the ground up.