The chart below shows the history of months of inventory (per Metrolist) for the Denver Metro counties of Denver, Adams, Arapahoe, Jefferson and Douglas from July of 2008 through October of 2016.
Do you see how the months of inventory were way above six months between late 2009 to just 2012? We all know that problems started after 2006 but it took a while before we started seeing the effect in housing. Then it was just under three years of a buyer’s market and thousands of homes not selling. In 2013 we started seeing the market turn the other way and months of inventory was no more than three months then and has even under two months since the spring of 2014. The number of homes for sale has stayed under 10,000 since then as well. We all know that buyers have gotten into loans with lower interest rates and subprime loans are history. The Denver area has also seen a huge population growth, low unemployment rates and huge demand for housing. Inventory would need to multiply at least six-fold to get to concerning levels. That’s exactly what happened between mid-2008 and and mid-2009. Yikes. As far as the Trump story line, let’s say deregulation takes hold and credit is loosened. Will loan terms get to subprime standards? Will consumers take the bait and take on riskier loans? It would take years before the impact is felt even if things turned south for everyone. Researchers have, in fact, concluded that presidential administration hardly have an impact on the housing market cycle. The simplest thing to remember is take care of your own business. Don’t live beyond your means and prepare for the next recession. It will come some day (some say 2022). Below are some cool links to do more of your own research. I’m talking about the nerdy type of “cool”. Enjoy.
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