Colorado's Fast Recovery Brings Growth And A Housing Crunch
It's amazing how the 2008 recession is still impacting the real estate industry! Here are a few factors which are making the market challenging.
Before the crash 35,000 to 40,000 new housing units were being built per year in Colorado (according to Community Radio of North Colorado). During the recession we dwindled to an average of only 9,000 units. The numbers stayed low for a few years, putting inventory at a major deficit. Once our population began to grow, housing became an issue. Most counties from the Denver Metro area northward saw growth around 1.5 percent or more.
So to ease the pressure of the real estate crunch, developers need to build new houses as fast as possible. However lots of builders are being cautious. After all the memory of how their industry was financially devastating just five to seven years ago won't go away quickly. Many companies now prefer to build homes only if buyers are already under contract. This practice creates security for them, but the supply of homes remains low, which is causing prices to increase.
Wages are also another issue. As housing prices (both renting and buying) are climbing, incomes need to catch up. When people spend more of their income on housing, they spend less on expenses like eating out and buying clothes.
So how can you navigate the challenges of Denver's real estate market? You need a local expert by your side!
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Windermere Metro Denver Real Estate