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Denver makes the New York Times Sunday, but not in a positive way. It seems not only are housing prices flat here in the metro area, there’s no sign it’s going to change soon. In fact, the Times speculates Denver may represent a coming trend in other cities.
Even as prices for homes in frothy markets like Las Vegas; Riverside, Calif.; Miami; and Washington are still jumping by more than 20 percent a year, Denver’s homeowners are learning the hard way about living through the real estate doldrums. Five years ago, median house prices were rising at an annual clip of nearly 17 percent. By the first quarter of 2005 the increase had slipped to 3 percent, according to an analysis by Economy.com, a research firm.
….Where buyers here had few properties to choose from in the late 1990’s, today they can afford to be picky. Inventories of available homes have tripled from 8,010 in January 2000 to 25,817 in June, according to Gary Bauer, a real estate broker and consultant in Denver.
Denver sellers aren’t losing money, but a variety of indicators show their expectations of big profits are not being met:
Although sellers continue to profit, houses are sitting on the market longer, buyers are negotiating harder, and some owners, particularly young buyers who may have been counting on rapid appreciation, are postponing dreams of renovations, moves to larger homes and big savings for their families.
The Times examines the causes for our flat residential real estate market:
From December 2000 to September 2003, however, Denver lost about 74,000 jobs, about 6 percent of its job base, according to Economy.com. Increases in home prices stalled, then started to taper off. Houses lingered on the market, and sellers were forced to cut prices.
Rather than abandoning real estate investments, one disappointed homeowner said,
“If I had the cash available to invest in a rental property, I would do it,” he said. “It’s a pain, but I still think, over time, that there are some real good benefits to it.”