Usually it’s hard to predict movements in the housing markets because housing is so local, with differences across town, in Boulder County versus Denver Metro, or across the nation.
But this time is different. Currently, there are only a couple of soggy pockets nationally, in Connecticut and West Virginia. Housing data is uniformly good, with little overheating nationwide. But the data does mask one disconnect: the countryside is losing population, which hurts rural housing but creates a strong benefit for urban and suburban housing— especially if the urban area is strong in the technology sector, as Colorado is.
National sales of homes are supposed to be faltering—the financial press loves to report on even a slight housing blip—but in reality, we’re seeing only minor wobbles magnified by click-hungry headlines. We’ve been moving 5.5 million existing homes each year for the last three years, and sales of new homes have risen in a straight line since 2010 to 650,000 annually. The inventory of homes for sale has been exceptionally low and steady for five years. Just like Colorado: no land, no supply.
The National Association of Realtors® explained a down-wobble in June sales of existing homes by noting a sharp decline in properties priced in the $100,000 to $250,000 range. Good heavens. There are even fewer sales of homes priced under $50,000.
Yes, rates have risen, and national home prices have been rising at a six percent pace for almost seven years. However, there’s still a lot of pent-up demand (and larger incomes) following the Great Recession. Most importantly, loan underwriting is rigorous, so today’s buyers are extremely well qualified. Colorado illustrates and stands out in that respect: we have the lowest rates of loan delinquency (1.7 percent) and foreclosure (0.1 percent) of any state in the union.
Like I said, this time it’s different.