Is Denver's real estate market headed for a reversal?

On Sunday, April 16th, The Denver Post published an article which predicted median prices across northern Front Range of Colorado will fall 20 percent from 2019-22, according toLocation Inc., a geographic research and real estate data firm.œAt some point, the fundamentals are, ˜Can people afford to buy it, and what are their alternatives if they can't afford to buy?' said Andrew Schiller, CEO of the Connecticutfirm. œPrepare for a reversal.

If you are a research company with a new product to promote, the most reliable way to get a lot of very free publicity is to make dire predictions about doom in thefuture. As they say in the publishing business, if it bleeds, it leads. Everybody loves bad news. This is why this article got so much attention.

I think that it is very difficult to predict when the next recession will occurand the magnitude of the correction, if any, that will take place next time. As an investor, I would rejoice to see a 20% correction, because that would mean a lot of bank foreclosures and amazing investmentopportunities like we had in 2010 through 2012. There is no way that I will be that lucky twice in one lifetime.

It does seem reasonable that a Denver real esate market reversal could take place in 2019 or 2020. I think that you will see appreciation come to a stop for a few years and then it will resume at a more normal rate of 6% per year. Barring some 9/11 disaster, I would anticipate that the next recession will not lead to any material decrease in prices.

Here's the article from the Denver Post:http://www.denverpost.com/2017/04/16/denver-northern-front-range-real-estate-slump-2019/

Author Lon Welsh, Chairman of Live Urban Real Estate and Your Castle Real Estate, is also a real estate investor, who purchased almost 50 homes and condos during the downturn. Welsh strongly believes a similar downturn is very unlikely. For example, two bedroom condos that sold in 2009 for $38,000 are now selling for $160,000.