Will Home Prices Drop in Denver?
With the influx of new residents, the home prices in Denver have risen significantly in the last decade. However, in the most recent years, the prices have started to slow. Home values have risen so much in the past seven years that people earning a median income in the Denver area had trouble affording median-priced homes.
This is a common problem when the housing market grows faster than the income in the area. Affordability problems crop up, and potential buyers steer clear of the market. The result is a reduction in housing demand.
With all this in mind, let’s talk about the 2020 expectations for the Denver housing market.
Will Denver home prices drop in 2020?
Since January 2010, the median home price in the Denver metro area has gone from $200,000 to $420,000. This is an average gain of around 7% a year, but compared to wage gains of 2.3% a year, this means that the majority of Denver residents would have trouble affording a house at the current prices.
The good news is metro Denver home prices are expected to plateau this year. In some places, the prices are actually falling. This is great for buyers looking to purchase a house because it means that with houses in a plateaued market, sellers will have to offer more value while corralling their price expectations.
With the plateaued home prices, this means that buyers must think of the purchase of a home as a long-term investment, not something that will appreciate tremendously in a short period of time. For sellers, a plateaued market means being competitive with pricing, and quality will be imperative to selling in a timely manner. With more houses to choose from, buyers will expect to negotiate.