Do Denver Home Prices Warrant A Bubble Watch? As home prices continue to rise throughout most
of the nation, sooner or later people begin to wonder whether we’ve crossed the
threshold dividing undervalued from overvalued. Pundit shorthand for “overvalued”
has gradually become almost synonymous with the far more fear-inducing
term, “Bubble.” As with the chewing gum and soap-blowing varieties, the
term can’t help but conjure up visions of the associated “Pop!”
Just worrying that we are in a home
pricing bubble can cause sleepless nights and worse — financial paralysis. As home prices in Castle
Rock Centennial Cherry
Hills Village Greenwood
Village move higher,
it’s natural to wonder if they are truly justified by economic fundamentals.
While no one wants to be on the other side of wrong, no one wants to miss great
deals on Castle
Rock Centennial Cherry
Hills Village Greenwood
Village home prices,
either. How to know?
Bubbles are notoriously hard to define,
but to address the issue, the Trulia real estate web site has just come out
with a new tool designed to assess whether today’s home prices — including those
in Castle
Rock Centennial Cherry
Hills Village Greenwood
Village — are overvalued or undervalued. They compare the
latest prices with historical incomes, prices, and rents.
The first findings are reassuring.
Although residential price gain percentages do rival those of the last decade’s
bubble, that’s deceptive. They started from a much higher perch. The decline
from 2005-2006 was steep enough that (aside from a few metro areas in
California and Texas), the fundamentals show that the current gains look a lot
more like a rebound than a bubble.
Trulia found that as of last month, national home
prices remain undervalued by 7%. During last decade’s bubble, prices
went as high as 39% overvalued. Their takeaway is that home prices remain
considerably lower than they were during the last bubble.
So bubble-watchers can rejoice or rebel,
but as far as this Denver agent is
concerned – Trulia has provided some very pleasant news. “Rebounds” bring about
visions of happy kids on trampolines (and rebounds don’t pop). The news is
excellent for instilling a positive national outlook, but more locally, if
you’re looking for the latest information about Castle
Rock Centennial Cherry
Hills Village Greenwood
Village home prices
and activity, contact me for a no-cost, no-obligation consultation.
By Jason Peck
Jason Peck is part of the Carr Peck & Associates at Keller Williams.
He has been recognized locally and nationally as in expert in real estate.
Locally he is 6th in Denver Metro home sales out of 5,000 agents and has
been recognized by the Wall Street Journal and Real Trends as one of the top
selling agents in the country. He is co-author of the National Best
Selling Book, “The New Rise in Real Estate”. For more information feel free
to contact
him or
call 720-446-6301.
Photo provided by freedigitalphotos.net
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