Housing Forecast
Stewart Title’s Chief Economist and the Denver Metro Chamber of Commerce Economist recently held a public discussion of the economy at the Jefferson County Board of realtors. They foresee the housing market in Denver as “returning to normal,” with “normal” being defined as sales volume in 2003. They project price stability to arrive in 2009.
We believe that prices will still decline as the entry of the last of the foreclosed sub-prime mortgages, combined with the continued slowdown in sales of +$500,000 homes make for a lower average sales price.
We expect unit sales volume to decline by 2.5%.
What is interesting in their presentations is the mortgage forecast. Now is the time to buy and/or refinance. Because of the deficit spending we are about to experience they are forecasting increased inflation and higher interest rates. They estimate 30-year fixed rate mortgages to be at 4.8% for 2009, 7-8%% for 2010.
Don’t worry about buying “at the bottom” of the cycle. If you want to get into market with great rates, it’s time to do it now. If prices for homes drop another 10%, but mortgage rates go up 1%, you actually end up behind. Smart buyers will buy ASAP.
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