In my blog last week Colorado real estate sales plunge 28%, will prices fall off the cliff I asked the question what happens to real estate prices in Denver next year. The experts have spoken and the results were resounding, and a bit surprising.
What do real estate experts predict for Denver real estate prices?
A whopping 80% felt that real estate prices would fall 5-10% (50%) or drop even further (30%). On the flip side about 5% felt prices would rise and 15% predicted prices basically flat. The surprising part of this survey is that my list has title companies and realtors on it which are typically an optimistic bunch so to have 80% predicting falling prices is a huge shift in market sentiment.
Why do real estate experts predict a drop in Denver real estate prices?
The comments were very interesting from the survey, here are the top few that echo the general consensus:
- I think we are still in unknown territory till after elections. My Gut feeling is the state of Colorado is not a place to move to and many people & businesses are leaving. Many new govt rules & zoning, taxes are not user friendly and people have options especially if you are a 2nd home owner or retired. – Heidi https://www.theappletreegroup.com/
- Currently, we are in political turmoil, in an endless war w/ no idea how to extract ourselves, inflation will be challenging to curtail with our deficit continuing to grow. It is tough, but this is a cycle. The question is, how long is the cycle? Long-term, Denver and the surrounding area are a good investment with our lifestyle desirability; the question is our state business legislation.
- I have seven listings and we’ve already dropped them somewhere in the 5 to 8% range and still struggling to get showings. Way too much inventory.
- Price reductions are already coming in at 10-15% for motivated sellers. The buyer pool is extremely limited for anyone who needs financing as very few can afford the prices at the current mortgage rates or even just the prices.
- Denver and the front range have built a lot of apartments, the cost of ownership (interest rates being one of the biggest) today has put pressure on homes under a million dollars as rental investments. Small time landlords are competing against governments that offer tax-funded low-income rentals. Who knew we were going to be competing against our own tax dollars! Don-Crested Butte.
Will Denver real estate prices actuallyfall and how far?
From the survey responses, there is a definitely a negative tilt to where real estate prices head. 80% think that we will have prices decline at least 5-10%, with 30% of those predicting even further declines. The reasons for the declines are varied from apartment overbuilding to Colorado’s unfriendly business environment. Regardless of the reason, it is a pretty sure bet that real estate prices will decline somewhere in the 5-10% range with a high probability of a bigger drop. On the flip side there is around a 15% chance of basically the same in regards to prices.
I would agree with the survey as my guess is another 5-10% decline from where were are today with even more downward pressure especially on condos. Regardless of how far the market falls, it is important to remember that in every cycle there are huge opportunities and I think there will definitely be some upcoming buying opportunities in Denver metro. Thanks again to everyone who participated in the survey and remember in future surveys you can put in your name and website and I will put a link to it if I select your comment.
Additional reading on Denver Real Estate price predictions
- https://coloradohardmoney.com/colorado-real-estate-sales-plummet-28-will-prices-fall-off-a-cliff/
- https://coloradohardmoney.com/has-colorado-turned-into-whole-foods/
- https://coloradohardmoney.com/low-snow-year-impact-on-colorado-ski-real-estate/
- https://coloradohardmoney.com/denver-inventory-surges-and-yet-prices-rise/
- https://coloradohardmoney.com/vail-loses-major-lawsuit-should-you-only-buy-real-estate-in-a-vail-resort/
- https://coloradohardmoney.com/colorado-property-taxes-jump-40-percent/
- https://coloradohardmoney.com/category/survey-results/
- https://coloradohardmoney.com/is-affordable-housing-causing-the-surge-in-ski-town-home-prices/
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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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