Colorado Real Estate Forecast 2020
The Overall Outlook
Professional opinions on the forecasted 2020 housing market can be found all across the board – from those fearing a nearing recession after a long rising market to those optimistic about more millennials entering the market and continued low-interest rates. There is no shortage of “professional opinions”.
However, one equally accepted belief across all fronts is that housing market trends cannot be predicted on a national level, because it will vary considerably based upon your location. Expensive housing markets such as New York, San Francisco, Seattle, and Dallas are seeing a decrease in the frenzy, as more jobs can be accommodated remotely and more company site-locators look to housing price factors when considering locations. The market seems to be turning instead towards approachable, low-barrier-to-entry university towns with plenty of job opportunities.
The good news? It appears this shift will be a positive one for the Colorado real estate market.
So what does this mean for you as a prospective home buyer, seller, or investor in Colorado?
The Outlook for Buying Colorado Real Estate
Prospective home buyers looking for the perfect Colorado real estate may hesitate to make a purchase, hearing the experts say that “it’s a seller’s market.”
However, part of what makes it a seller’s market is the historically low-interest rates that we are currently experiencing. In the end, these low rates decrease the monthly payments and subsequent end interest yield on mortgages, making it just as much a buyer’s market.
Now is the best time to purchase a home, as interest rates are predicted to stay below or around 4%, possibly even through the middle of this year. Compared to rates a little over a year ago, mortgage consumers are saving an average of $125 per month on a 30-year fixed $300,000 mortgage (The Mortgage Reports).
For entry-level housing in the Colorado real estate market, acting now maybe your best option. The demand for entry-level housing is expected to increase significantly, while the supply of entry-level houses is at an all-time historical low. This is expected to result in home-price appreciation. Keep ahead of the competition and price increases, by finding your starter home now.
Those looking for upper-tier housing may be afforded a little more time to find the best deal and seek out incentives before closing the deal, as competition is less in this sector.
Whatever your situation, make sure you find a broker adept at taking immediate action as well as finding you the best deal possible.
The Outlook for Sellers of Colorado Real Estate
Affordability is key to the increasing millennial market. Entry-level Colorado real estate will be a competitive market, as more millennials are reaching the age and family status in which most people purchase their first or second home.
The demand for affordable houses will be on the rise and the supply is low, so in many cases, you will be able to set your price firm and sell fast. But as always, the profitability and efficiency of your home-sell depend heavily on the skill of the team behind it. Make sure you have a quality broker who understands the local market well and provides key tips and tricks for selling fast.
Sellers of upper-tier homes may need to be more patient and attempt to adjust their prices to local market conditions, possibly offering other incentives. However, hope is not lost if your property falls into this category. There is much that can be done to improve the chances of your home selling quickly and many creative incentives that can bring the right buyer to your home.
The Outlook for Investors in Colorado Real Estate
With near-guaranteed home value appreciation, plus low property taxes, Colorado real estate looks like a promising investment. Multiple sources predict at least a 3.3% growth in home value within the next year, with the national average predicted to be just 0.8%.
Some sources are even predicting up to a 6.3% increase in value for entry-level homes. Not to mention that Colorado property tax is the sixth lowest in all 50 states at just 0.57% per year. Colorado has a growing job market, a diverse military market, several large universities providing a strong student market and a booming local business scene.
While nothing is certain, trends tend to indicate that real estate in Colorado Springs remains an excellent investment opportunity for 2020.
Colorado Real Estate Experts
With historically low-interest rates, a local market that has strong projected growth, and a nationally stable market, real estate in Colorado has a bright future.
How do we know? Take a look at some solid facts that support a strong economy:
- Existing home sales increased in 2019.
- With the dawn of the new decade, unemployment is at a 50-year low.
- Lenders learned from the 2008 crash and have been careful to lend only under strict standards.
- When adjusted for inflation, today’s home prices are lower than those in 2006 that contributed to the crash.
- Fewer homeowners have borrowed against their homes, saving more equity for themselves and creating more stability in the market.