The Front Range housing market may be transitioning to calmer conditions. Or not. Or, given its vast size, it might be fragmenting into mini-markets, each with its own state of mind. One state of mind seems ubiquitous: anxiety. Not about housing (except the need for more), and not the fright of 2008 and beyond, but an edgy, uneasy mindset caused mostly by recent financial events.
The stock market’s downturn last fall undermined confidence. A four-thousand-point drop in the Dow will do that, even though it has rebounded since. How quickly we forget the eight-thousand-point surge in the two years preceding the downturn. The stock market and real estate are different animals. In real estate, rising home prices tend to reach a plateau and level off; when stocks rise 45 percent in a hurry, they tend to slide back down, and did.
Today’s worries have one consistent fingerprint: Wall Street. The normal Wall Street propaganda is, “Can’t miss!” Thus today’s message from Wall Street is odd: “The world is ending, so give me all your money because I’m the only one who sees it coming and can save you.” Financial media repeat versions of that line every day. The message is magnified by the web and further amplified on social channels. And unlike prior periods, the moderating voice of newspapers, with dedicated editors focused on the local market, are now mostly silent.
Still, there’s good news everywhere. The US economy is the best in the world, Colorado’s economy is as strong as any other state, and neither is showing even preliminary signs of trouble. The threat of inflation is so low that the Fed has paused its hikes on open-ended mortgage rates, which are down at least half a percent since December. Federal borrowing is happening too fast, but households have never been healthier financially – and Colorado now has the lowest mortgage delinquency rate in the nation.
We do have one problem in Colorado. We need more homes for the river of well-educated and motivated people attracted to our technology economy. Overall, a good problem to have in anxious times.