Denver Metro Area Real Estate Appreciation Rates
The Colorado real estate market has been on fire for about six years now. Check out the appreciation rates of median sold prices in the Denver metro area since the great recession (per www.recolorado.com the Denver metro area MLS).
I see two main things when I look at this chart. One: people who bought real estate six years ago are sitting on a lot of equity! This makes people feel great but doesn't really do much to pay the bills. The only way people can realize the gain is by taking out a loan against their newfound wealth or by selling. Taking out a loan gives you a nice infusion of cash but you also get a new monthly bill associated with it. This can be okay if you are paying off higher interest debt or if you can comfortably afford the new payment. If you sell your house to realize the gain then you'll most likely put that money into a new down payment, or maybe move to a low cost region and pocket that cash. Two: the trend seems to be downward. This really does make sense given that prices have gone up and up while wages haven't gone up nearly as much. This reflects the desirability of the Denver metro area but even that has a limit. In conclusion, if you rode the appreciation wave up, congrats! If not, take solace in the fact that appreciation is slowing to a more reasonable rate which should make for a better buying environment.