In 2005 (for unfortunate reasons, I remember this year well), real estate sales slowed to a crawl and housing prices decreased. There was little doubt in my mind that his meant a downturn in the Highlands Ranch real estate market. Needless to say, I clearly did not estimate how long or severe the down-turn would be. However, I see a light at the end of the long, dark real estate market tunnel, and the light is good.
Home Prices will Probably Increase – Not the Overall Sales
When looking at the real estate market, one really doesn’t have to look any further than supply and demand in order to get a good idea of why the market looks the way it does. In the past fee months the total amount of condos and houses for sale has decreased substantially. According to one report the home inventory in the Highlands Ranch and greater Denver area is down over 35% from the previous year. By the same token, condo inventory has decreased by almost 50%.
Rates Still Low for Denver and Highlands Ranch Mortgages
Mortgage rates are another factor which influences the state of the Denver and Highlands Ranch real estate markets. I have personally witnessed home buyers lock on 30 year home loans below 4% on fixed rates. With rents continuing to increase and mortgages remaining low, demand for housing will keep increasing, as this trend means that buying a home is now actually much cheaper than renting. IMO, as soon as these rates rise just a bit, consumers will flock to buy homes before the rates increase any further.
Economic recovery means increased consumer confidence, which helps all markets, including real estate
When consumers feel more positive about the directions the economy is heading they begin to make big purchasing decisions with less hesitation, which is a good think for the real estate market. While the economy may not yet be booming in anyone’s eyes, most would probably acknowledge that things at least aren’t getting any worse!
While nothing is ever certain in the real estate market, or in life for that matter, I personally have a good feeling about 2012 as it relates to the housing market. The reasons above dictate that there are at least a few concrete reasons to look on the bright side when it comes to evaluating the real estate market in 2012.
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