After year of tough sledding, weather ahead is chilly…but you wouldn’t want to be living anywhere else than Denver
By Mark Samuelson
So, what does the year ahead look like for our refrigerated town on the High Plains? After 12 months of tough sledding real-estate-wise, don’t expect a thaw anytime soon…but don’t pack your bags, either. People who make a living predicting the market are saying, all things considered, you’re better off here.
Jack O’Connor, author of a market report for RE/MAX Professionals, sees chilly weather ahead for the highest price ranges, and solid appreciation for people who own homes under $250,000.
“I’m still very bullish on Denver,” economist Patty Silverstein told me this week. She’s president of Research Development Partners, consulting chief economist for the Metro Denver Economic Development Corp. and for the Chamber.
The big factor impacting residential real estate is employment, and Silverstein sees slightly brighter prospects there. “Year 2010 will see a glimmer of hope,” she said, adding that we’re likely to continue losing some jobs early on…firming up later, with the odds favoring a slight increase for the year
That kind of late growth, however, will do little to jump-start the high-end housing market, says Jack O’Connor, who authors a monthly report for RE/MAX Professionals that was surprisingly accurate in predicting lower-end appreciation this past year. At the highest end, the Denver area still has way too much inventory and way too few buyers. If you own a house below $250,000, the forecast is much warmer…some price increases…maybe even multiple offers, once you put the sign up.
“If you have a nice home (priced below $250,000), you’re going to see 4 to 6
percent appreciation in 2010,” O’Connor adds.
In the million-dollar range, prospects are still glacial. Current inventory of 1,100 single-family homes at a million-plus (only 240 closed during the year as of Dec. 30) will take years to absorb. For million-dollar condos, says O’Connor, the temperature drops even more.
Meanwhile, you’re living in a place with a future in aerospace, bioscience, software, and energy…industries hit by the recession, but with temperate long-term prospects.
“You need to look beyond to what the opportunities can be,” Silverstein said.
Colorado, she adds, is perceived by the nation as a very attractive place to live…one that appeals to entrepreneurial types. “That will help us,” she adds.
If you’re selling in the high end, don’t expect improvement in 2010…and,
O’Connor adds, figure that interest rates, which have stayed low for a long time,
could likely climb late in the year. At the low end, watch for the continuing federal tax credit to play an abnormally large role in motivating sales. And remember…it only applies to contracts written by April 30.
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