DENVER - Last year was an exceptionally good year for the real estate market in the greater Denver area. Property values are up roughly 10 percent since the end of 2012.
Several factors fueled this above average growth rate for our area.
First, mortgage rates hit the lowest level in 40 or 50 years with 30-year fixed rate loans in the mid to upper 3 percent range. This meant buyers could afford more house than they could in years prior.
Second, the number of properties for sale, also known as inventory, hit the lowest level since they began keeping statistics. Inventory dropped 82 percent from mid-2007 to March 2013. Think of it as a game of musical chairs. As chairs are removed from availability, the remaining chairs are in greater demand and therefore more valuable.
We should continue to experience a very healthy real estate market for the next several years. Here are things to look for in 2014:
- The amount of buying activity by investors to wane
- First time home buyers should be a smaller segment of the market
- As the economy improves, interest rates will rise from 4.625 to 5 percent.
- Increase in inventory
- Improving mortgage market
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