Yes, June’s average home prices in Denver were record breaking… again. The current home price average in Denver is dangerously close to $500,000, when just 5 short years ago, it was safely below $300,000.
Home Prices Can Be Stressful
If you’re a home-buyer, I can picture your furrowed brow and the knot forming in your stomach… how will you afford the home you so desperately want? Are you destined to rent until the end of time?
Or, you might be aching to sell your current home – up-size or move to a neighborhood you’ve been eyeing. Your brow is likely furrowed as well. Perhaps a bead of sweat is inching its way down your forehead. Even if I make a healthy profit on selling, there’s no way I can afford a new home! I might have doubled my home equity, but that’s not enough to keep up with this record-breaking market!
Your pain is felt by the Denver masses – you’re not alone. But, don’t despair. There’s data to quell some of your concerns. There may not be a solution for the low inventory buyers compete for, tooth and nail, but all evidence shows that once you do make a purchase, your equity is likely to continue to grow.
The Truth is in the Data!
The truth is, month over month, Denver has been setting record high average home prices since 2013. This is due to the fact that 2013 was the year that our housing market regained its pre-recession footing. And honestly, everyone knows that housing prices inflate year after year. In fact, the average annual home appreciation is 6.3% – and that average includes recession years. In recent years, Denver Real Estate prices have increased at rates around 8%… almost standard for non-recession years.
Even more comforting is the thirty-year historical data. By taking a good look at the graph below, you’ll see that the previous home price climb (1989-2006) lasted 17 years! The current home-price climb has only been at it for 7 years so far. Considering that history has a way of repeating itself, we can assume that housing prices will likely NOT plummet anytime in the near future. That said, no one can tell the future (not even crazy smart economy analysts).
Home Buying is Still a Good Investment
Isn’t the data consoling? Although a graph can’t reduce the record-high home prices, it can provide insight into the future. The $300,000 mean average home price of 2012 was just our economy climbing back out of recession ravages. If history can be trusted, we’re in for some reliable years of home equity security. In other words, your expensive home will likely still make you money.