Just a random topic for discussion to a little....

Here on the Front Range we've seen the real estate market go from "good" to "red hot" to "holy crap!" levels. I think the median home price in the metro area is something like $600k.

Back in 2017 we sold our small Englewood home (3br, 1ba) for what I thought then was a crazy $350k (if you'd asked me in 2016 I'd have guessed maybe $250k but only because we put in a lot of upgrades in 2008 including an oversized 2 car garage, new siding, windows, a roof and a furnace.)

We bought our house in the Columbine area for $415 and I think now even the most "conservative" appraisal has it at $500k or more. A couple of houses near us (albeit a bit larger than ours) have recently sold in the $650k range.

Now at first blush I'd be saying "WOO HOO!" because our home values have gone up. But then it gives me pause - because at this point, people are putting offers in at $20k - $40k above asking price and STILL being beat out.

Which makes me wonder - at what point do the sky high prices act as a deterrent to sales because people are reluctant to sell without knowing whether they'll be able to buy?

Our kids are in this situation now. They have a small-ish 3br house that they'd like to sell to move to something bigger for their growing kids, taking advantage of the increase in value of their house - but their dilemma is, they can't afford to BUY in this market. So, as a result, (a) they aren't buying and (b) they aren't selling.

The current housing market reminds me of an old joke about New York: "Nobody drives here - there's too much traffic!"

So who the heck is BUYING all these houses? SOMEBODY is buying real estate at these (IMO) inflated prices, but who? Is it all "out of staters" moving here? And if they're so flush with cash from selling their homes, who is buying THOSE homes?

I studied history and law, not economics and business. But I don't see how this is sustainable. It seems to me that with the frenzy of building new construction, sooner or later, the "supply" of homes for sale is going to exceed the "demand" because there MUST be some kind of end point to the demand, mustn't there?

I even get that with historically low interest rates, people are pouring money into real estate because it's one of the only places you can invest money and get a decent return. But these homes being snapped up in hours can't ALL be investments, can they? I mean, it's a house, at some point somebody has to want to live there and if they don't it's not going to bring money to the investor, right?

I guess I just worry because it seems like we're on the part of the roller coaster where we're going up and up and up and it seems to me that sooner or later, there has to be a "down."

Anyway, I know we have a lot of smart people with different areas of expertise and experience so I thought this would be a good place to start this discussion....