Denver Housing to Gain Despite Coronavirus, Recession Fears
Low Inventory, Again Out of the 5,122 new listings that came on the market in February, 5,083 homes were under contract in DMAR’s 11 county area, highlighting the metro area’s low inventory market dynamics. The low inventory trend seems to continue as we ended February with just 4,835 active listings, down 2.15% from January. Just what do you think is going to happen to home prices in a metro area of about 2.8 million people? Where is the Inventory? My hunch is 2020 might bring the biggest housing inventory shortage in US history.
Currently, 55.2% of all owner-occupied homes are owned by people age 50 or older. An increasing number of Baby Boomers are aging in place, unlike their parents who sold their homes to downsize or move ahead of retirement. It’s not just Baby Boomers. Homeownership tenures have reached new highs at an average of 13 years - the highest average in 18 years! Nationally, new construction just hit a 12 year high but only caters to the upper tier of housing, which leaves an estimated gap of 3.8M homes needed to meet market demand across the United States.
In Colorado, housing permits are down year-over-year as builders try to shift from large homes to smaller, more affordable homes, townhomes and condos. The lack of inventory is creating appreciation. Metro Denver’s February year to date is already 6.25% and primed to continue, whereas median home prices in metro Denver increased only 2.46% in 2019. A recent CoreLogic report shows 4% year over year gains and homes reported by FHFA showed a 5.2% increase year over year.
Coronavirus to Slow Down U.S. Economy
The Coronavirus is a threat not just to public health, but to the global economy. As China scrambles to contain the outbreak, we’re already seeing effects on global trade, supply chains, and manufacturing. In China, workers and truck drivers are being ordered to stay at home to limit the virus’ spread, grinding manufacturing and logistics to a halt. Shipping companies are also canceling routes from China to the U.S., further limiting the number of Chinese products reaching the U.S. Read the rest of the article at https://theruethteam.com/Market-Trends
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