Preliminary data from last fall on Denver Metro home prices looked as though we might be entering a slowdown in this red-hot cycle.
Forget that. Spring 2018 turning into summer has been just as hot as the last five years. So, will we never have enough homes to satisfy demand? Will prices continue to rise into the sky?
The Metro area has changed, and faster than our minds can adjust. Think of a magic rectangle, from Castle Rock to Fort Collins and the foothills to I-25. It’s no longer a string of separate towns but a major new metropolitan area—one with no land on which to build.
Every family contemplating a move is stymied by this, triggering a common refrain: “Where am I going to go?” Going east, away from the foothills and toward I-25, has been the historical solution. Now, for a single-family home, you have to go waaay east, or into a townhouse or condo. That’s pretty much it for new supply and choices in the magic rectangle.
The overbuilt and foreclosure era of 2004 to 2012 concealed the exhaustion of land here. Today, long-time locals who are looking for a new home feel like newcomers who are moving here for the first time.
As vexing as the situation may seem, it is the same in every attractive U.S. metro area: A large inbound migration of people attracted by technology, employment, or education has achieved critical mass, overwhelming local supply. And metro housing markets will stay overheated as long as that critical mass in the magic rectangle continues to create careers, incomes, and wealth for its residents.