What’s New with Real Estate?
 
With residential home prices continuing to appreciate at levels above historic norms, some are questioning if we are heading toward another housing bubble (and subsequent burst) like the one the nation experienced in 2006-2008. Some opinions are that the housing market is not being pushed by speculative behavior but is performing more or less as expected given underlying fundamentals.    
In a recent interview, David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices observed that, "Housing is not repeating the bubble period of 2000-2006. Price increases vary (by region) unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months' supply is declining, not surging." Home prices are tracking on the broader economic expansion of our country.

In our local markets supply still greatly lags demand, high-paying jobs in stable industries continue to flow into our market, and we have something few other markets have to the same degree - the lifestyle bonus. In addition, we no longer have the sketchy investment vehicles tied to home mortgages like we did with credit default swaps and their toxic brethren. In other words, THIS housing market is growing on real demand by real buyers. The pace of price increases should and will eventually moderate when supply catches back up to demand, but residential real estate continues to enjoy a solid fundamental environment in the Denver Metro market.