2010 has been a noteworthy period for both the local and national housing markets. A sampling of occurrences in the real estate market include: homebuyer tax credits, historically-low interest rates, rampant foreclosures and short sales, property prices struggling to bounce back and the list goes on. Since we have been asked repeatedly about our predictions for the Denver real estate market in the coming year, we thought we would share our outlook with you.
Interest Rates: We saw rock bottom interest rates in 2010 – rates so low that we may never witness them again in our lifetimes. Where are interest rates headed in next year? While it is hard to know, we expect low interest rates to stick around for the first two quarters of 2011. Most industry experts expect interest rates to increase in the second half of next year.
Home Prices: Home values continued to rebound in most Denver neighborhoods this year and housing inventory has fallen. Unfortunately, the phenomena was mainly due to artificial market stimulation from federal housing credits. We expect next year to bring strong buyer demand from improvements in the labor market, along with the low interest rates through Q1 and Q2. We hope this demand will result in solid home value appreciation through the second half of the year.
Housing Inventory: The upbeat news is that the inventory of homes for sale has decreased in 2010, which is good news for sellers. A lower inventory of homes for sale means that prices will remain stable, or even increase, since there are fewer homes on the market to compete with each other. If you are planning on selling your Denver home soon, you will want to get it on the market as soon as possible while there is less competition.
What does all of this mean for Denver homebuyers? Now is a great time to consider purchasing a Denver home. Take advantage of the historically low interest rates, and the great selection of properties for sale before they are gone forever. This is a once-in-a-lifetime opportunity from homebuyers that we would hate for you to miss out on this opportunity. Interest rates are already rising, so it is time to act. If you don’t, you will regret it in a few years or decades.