A Pulse on Denver’s 2018 Housing Market
How will the metro area’s market respond to the impending tax reform?
Article from ColoradoBiz By Matthew Leprino, CAR Spokesperson
When we refer to predicting what’s next for the market as having a “pulse” on it, we are referring to it being a living, breathing thing – a stubborn little creature inhaling and exhaling with seasonal aptitude and behaving in a way that has everyone in suspense, especially as tax reform becomes a reality.
As the world waits with baited breath to see what the overall economic impact will be, the Denver metro market seems to be ending its all too familiar ‘same old same old’ story, emerging from the rising prices and seller-specials-tale like Michael Bublé from his Christmas special cave during the holidays.
With impending reform set to shake up business as usual, there is bound to be dramatic responses both in favor and against the reform – most of which will, one can hope, be temporary reaction, rather than a long-term effect. Many who believe the sky will fall could prepare for a massive sell-off, while talk of impacts on landlords alone will surely open opportunities within the multi-family sector. Those who are most concerned about the impact on homeownership as a whole will begin looking at the mortgage interest deduction in an entirely new way, while others may see the shifting landscape as what we have so desperately needed – a catalyst to a more balanced market.
In forecasting 2018, we see that the city of Denver’s market behavior, as compared to the entire metro area, has a unique attribute. According to numbers provided by the Colorado Association of REALTORS®, there is now just one month’s worth of inventory available, as compared to the metro’s 1.3 months. In Denver, the average days on market is just 27 while the metro competes at 32 – a number unchanged from last month. Denver’s November median price is up 9.9 percent over November 2016, but is experiencing a much slower climb in recent months. While the metro area is also shattering record median prices, rising 6.2 percent overall since 2016, Denver’s performance in these categories is just shy of 10 percent.
Denver is bound to experience more of a reform reaction, as our drastic uptick in development combined with the new Green Roof Initiative and proposed limited growth initiatives, will take effect. One such question will be how cash-strapped homeowners associations will react with regulation that imposes enormous financial burdens overnight. We won’t see a condo here or there hit the market in some of these cases but entire buildings forced to bail out owners from crippling special assessments.
It’s easy to see that 2017 has been a strong year for demand and corresponding prices, but what that may mean for 2018 is left up to anyone’s interpretation of reform. Now that the House and Senate versions have become one, it seems certain that several key market categories will be impacted including mortgage interest deductions and what appears to be drastic differences for companies looking at liquidity moving forward.
Whatever the ultimate reaction, Denver and the entire metro area are likely to see continued positive growth, desirability and attractive interest rates to fund next steps.
View the Original Article HERE