What will the Denver Real Estate market be like in 2012? Iwish I had a crystal ball to answer that, but since I don't, I guess I will doit the old fashioned way of looking at Real Estate trends and projections togive my best prediction. I believe 2012 could be the best Real Estate market wehave seen in years, but it all depends on a few key factors. To betterunderstand these factors and what the future holds, it is best to take a quicklook back at the Denver Real Estate market in 2011.
2011 was a very interesting year for the Denver Real Estatemarket. Home sales were up 1.5% over 2010, always a good sign. The median salesprice dropped to $230,000 from $235,000 which can be explained by theincredibly hot lower end market, homes under $200,000 that often get multipleoffers in a matter of days. This can be attributed to unbelievably lowerinterest rates, most buyers are still getting close to 4% which actually makesit cheaper to own than rent. Add in a rental market that is experiencing thelowest vacancy rate ever in Denver and buyers are realizing the advantages ofbuying over renting.
Looking to 2012, new home construction spending hasincreased for the sixth straight month signaling a sign of builder confidenceand hopefully more new construction for the Denver area this year. And thisshould be a number that continues to grow considering the inventory for Denverhomes is the lowest it has been in 10 years!
I believe more than anything, inventory is going to be thestory for Real Estate in Denver in 2012. I already have buyers complainingthere isn't enough to choose from on the market which makes finding the perfecthouse tough. I wrote a blog last month asking if we are in a buyer's market ora seller's market and with inventory so low right now, we really need to askwhere we are at.
With increased sales and such low inventory, on paper itwould seem we are transitioning back towards a seller's market, the wholesupply and demand thing. But we can only really be in a seller's market ifbuyers shed the mindset they are going to get a steal on every house and focusinstead on jumping on the right house when it becomes available, while makingsure it is still a good deal. And sellers need to see the extreme lack ofinventory that is available to buyers and be willing to put their homes back onthe market at reasonable prices. If we can abandon the œI want a steal mindsetand focus on everyone getting a good deal, this market could explode. Otherwise,I could see our market stalling with sales dipping this year despite therebeing a plethora of able and willing buyers.
So with interest rates staying near 4%, rents continuing toincrease and becoming harder to find, 2012 will remain a terrific time to buy.Buyers just need to be aware of the lack of inventory and be willing to commit tothe right house once they find it. And a seller, 2012 is the year for you! Youkeep saying you are waiting for the market to be right. If having multipleoffers on your house is what you have been waiting for, then 2012 willdefinitely be the time to sell your Denver home so get on it while the gettingis good.
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