In my last blog post, Colorado has largest Golden Handcuffs in the US, I launched my first Colorado to see what the readers of my blog thought, the results were different than I would have predicted. There was a clear consensus of where real estate prices are heading but also a possible upside surprise. It was also fascinating to see the difference in what people thought of real estate prices vs just Colorado. Thank you to everyone for your responses and insight it is invaluable. Below I’ll share the details.
About my email list
My email list in Colorado is large and all organic that includes realtors, appraisers, property owners, assessors, various real estate media, etc… It is a diverse group throughout Colorado. For example there could be a realtor in a ski town selling a 50 million dollar home as opposed to a realtor in Denver selling a 150k property. The viewpoints are diverse based on geography, specialization within real estate (title company versus commercial property owner versus county assessor), etc… This allows a unique cross perspective on real estate trends that you can’t get anywhere else.
What was the question in the Colorado survey?
Will Golden Handcuffs increase or decrease real estate prices in Colorado over the next 6 months?
- 10-20% Prices Fall Substantially
- 5-10% Prices Fall Modestly
- Golden Handcuffs keep prices the same
- 5-10% Prices Rise Modestly
- 10-20% Prices Rise Substantially
What is the root cause of Real estate prices rising or falling in Colorado?
What were the results from the Colorado survey?
I was amazed at the diversity in the answers but there is definitely a trend
- 40% felt prices would fall 5-10%
- 25% felt prices would fall 10-20%
- 25% felt prices would stay the same
- 10% felt prices would increase
Long and short 65% felt that prices would either stay the same or fall modestly with 10% expecting an upside surprise while 25% expect a downside surprise. This is fascinating as on a similar survey to my entire list nationwide, they were considerably more pessimistic with 67% predicting falling prices in the 5-10% range.
I also asked what the reasons behind the choices were and here is an AI generated summary of the responses
The feedback regarding the root causes of real estate price fluctuations in Colorado reveals several prevailing concerns among respondents. Key themes emerged around the concepts of affordability, supply and demand dynamics, and economic conditions.
- **Affordability Issues**: A significant number of respondents noted that prices have become too high in Colorado, highlighting that economic pressures, including high taxes, contribute to the unaffordability of homes. Many expressed that the prices have become “overpriced,” especially accentuated during the pandemic when demand surged in conjunction with low-interest rates.
- **Supply and Demand Imbalances**: Participants frequently referenced the balancing act between supply and demand. Several responses indicated a growing supply of homes hitting the market, yet a noted lack of buyers willing to pay high prices exacerbates downward pressure on prices. This implies a mismatch where, although there may be more listings, economic hesitation and external factors (such as interest rates and people preferring to hold onto their current low-rate mortgages) hinder aggressive market activity.
- **Economic Factors**: Economic uncertainty and external variables, such as rising interest rates, were pointed out as dampeners on both buyer sentiment and price escalations in the housing market. Respondents also touched on how market conditions, including rising treasury rates, influence real estate pricing and convey a cautious approach among potential buyers navigating the current valuation environment.
Overall, the feedback paints a picture of a complex real estate market in Colorado, where factors of oversupply, high living costs, and economic hesitations coincide to create a situation of inflated prices that many feel may need an adjustment. Summary
Summary
Thank you everyone for your participation and insights in my first survey. The overwhelming sentiment is that there will be a price declines in the 5-10% range with also a strong probability of price declines going much deeper to 10-20% but on the flip side at least 10% think the prices could see an upside surprise. If I contrast this against the national survey I did Colorado is much more optimistic than the rest of the country. If this survey holds true Colorado should outperform other markets on the whole. Stay tuned for future surveys and results.
Additional Reading/Resources:
- https://coloradohardmoney.com/colorado-has-largest-golden-handcuffs-in-the-us/
- https://www.fairviewlending.com/90-percent-probability-prices-will-fall/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Glen resides in Colorado, lends in Colorado, owns property in Colorado, and services loans in Colorado which provides a unique real estate prospective of what is actually happening on the ground both in Denver and throughout Colorado. My goal of this real estate blog is to provide an honest assessment of what I see happening in Colorado real estate and how it will impact real estate owners, buyers, realtors, mortgage professionals, etc…
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