Real Estate Market. Thoughts?

[kawiracer14]

Bump. About a year later and the market has gone even higher.

The market ain't going down anytime soon. Vacancy rates are super low, tons of people are moving here. It's not a bubble.

[MrPrena]

When pot hype dies down, it will "slow" the increase in demand. If increase in supply goes full retard , we will see a price decrease.

[Wulf202]

Up here rental rates have hit a plateau

[Grant H.]

I think the growth will slow this year, but unless we see a global economy collapse, I don't see it collapsing here.

One of the realtors I know was running through a few points.
- Houses selling at or above asking price is up 212% from 2011.
- 56% of single family homes in the front range sold for their listing price or higher last year.
- The Metro area has a 3.2% unemployment rate.
- Boulder County is at 2.6% unemployment.
- 25 year average of listings on the market is 13,340, which is approximately 3x higher than current.
- Boulder's median sales price has increased 48.9% since January 2015.
- Denver has 19 new new hotels in 2016, making us 9th for new hotel growth.
- Google is pouring money into their Bolder Campus, and planning to grow their local force from ~350 to 1500.

And so on.

[Irving]

With the exception of the lack of easy loans, what is different from this market than the one in 2008? I'm not trying to be sly, I really don't know. I generally view markets as in between peaks and crashes.

[Grant H.]

With the exception of the lack of easy loans, what is different from this market than the one in 2008? I'm not trying to be sly, I really don't know. I generally view markets as in between peaks and crashes.

Locally speaking, the biggest difference is the strength of the local economy.

However, world wide, I'm not convinced that we've got that long.

[Great-Kazoo]

Locally speaking, the biggest difference is the strength of the local economy.

However, world wide, I'm not convinced that we've got that long.

Exactly what is, The Strength of the Local Economy?

My cousin and I were discussing this today.
How the hell does someone relocating afford rent, let alone a house? I doubt every business in CO is paying $15 - 30 hourly. I also wonder how the hell someone can put down as much as our house cost 20+ years ago. AND afford a $1500 - 2500 monthly mortgage.

How do you new[er] home buyers do it? Granted there's the east coast, sold their home for $3-500K buyer, but everyone? We're perplexed how people are moving in to HOMES FROM THE MID $200'S Horton builders dream.

[Irving]

My last job has already lost some people that they brought in from Wyoming due to the living expenses. They went from making maybe $12/hr to closer to $18/hr ($36,000 salary), BUT the taxes and housing was so much more expensive that they couldn't swing it and ran back home.

[ColoradoMinuteMan]

The market ain't going down anytime soon. Vacancy rates are super low, tons of people are moving here. It's not a bubble.

I hear you. I do have to say though the first indicator for me that there is a bubble is when k hear so many people saying "there is no bubble." CO has a lot going for it but I saw this first hand back in CA. I sill have property there. The reality is we are by my definition in a bubble. That is, when real estate costs significantly outpace wage growth. In the early 1980s-2000 it took an average 23% of a CO residents income to pay for housing. Now it takes 35%. I have no doubt we are In a bubble. That is an unsustainable situation that will eventually reach equilibrium one way or another.

[Grant H.]

Exactly what is, The Strength of the Local Economy?

My cousin and I were discussing this today.
How the hell does someone relocating afford rent, let alone a house? I doubt every business in CO is paying $15 - 30 hourly. I also wonder how the hell someone can put down as much as our house cost 20+ years ago. AND afford a $1500 - 2500 monthly mortgage.

How do you new[er] home buyers do it? Granted there's the east coast, sold their home for $3-500K buyer, but everyone? We're perplexed how people are moving in to HOMES FROM THE MID $200'S Horton builders dream.

You ask some questions that my brothers and I ponder every once in a while. We catch up with some of our friends, and hear what they are doing and approximately what they make, and we wonder how in the hell they can afford to live in the area.

The biggest difference, and based off of what I have seen you post here, I expect this is true of you as well, we believe in paying cash for what we buy (houses are the only thing we have loans on). The rest of the world believes in making the minimum payment each month, for the length of the loan, or longer.

I was talking with one of the younger (I'm only early 30's, but he's early 20's) guys at my church a couple weeks ago, and the younger generation really has no idea how to live within their means. They live paycheck to paycheck, with little to now savings, and darn near everything on credit. They manage to lead a pretty successful looking life, from the outside, but if one thing goes awry, they are in hard times quick.

As an interesting tidbit, I got told to take a time management class back in 2007-8 (my manager thought I was wasting time and working over time just for the hours, after the class she "followed" me for a week and then apologized when she realized that I just had too much going on... Being the entirety of the firmware test department for an electronics manufacturer meant lots of work time). During that class, the instructor showed us an article from Forbes or a similar magazine, that asserted that less than 10% of the American populace could get their hands on $5000 in cash in less than 72 hours. I'd be willing to bet that less than 10% of the local Colorado populace can get their hands on $1000 in cash in 72 hours.

As for what I meant by the "strength of the local economy", I was speaking about several things.
The tech market is growing in CO. Has been for a while, but with Google pouring $100 million into the area for it's first phase construction in Boulder, there is a lot of interest/growth coming on the heels of it.
Despite my dislike for it, the marijuana market is driving things up locally. There is a tremendous amount of money in that world, and in the usually idiotic old cliche, a rising tide floats all boats.
Those who are motivated and want to, are finding a path towards debt free life with the rise in the real estate market. The current proposed sale price of my house (first house we have owned) is now more than 2x what I paid for it. We will be selling this year and buying/building with the equity and our savings.
O/G is pulled way back, however there are still a LOT of folks that are making good money in that world. The downturn is directly affecting the business that my brothers and I own, but we are finding other projects and markets to get into instead of O/G. We maintain our presence and a couple customers, but we don't expect a lot of our revenue to come from there.

Things are going well here right now for most people.