Real Estate News
With the housing market booming I’ve had a number of folks ask me if we’re going to experience another housing bubble sometime in the near future. It’s a great question, so we decided to look at the historical data to look for a sensible answer. What we have done is attempt to correlate the population of metro Denver over the past 25 years with the number of single-family home sales per year to determine what the relationship looks like. What we found is fascinating!
The blue line on the chart represents the population of metro Denver over time. The red line is the number of home sales. What you see is that there definitely appears to be a relationship; the higher the population, the more home sales occur over the long term. But that relationship is skewed during market booms and busts.
During the recession that was ending around 1990 you see that there were fewer home sales than average. The economy was suffering so fewer folks bought homes. Then about 1991 the economy recovered and more people bought homes. We experienced the hyper boom of home sales from 2002 – 2006, then the crash of sales from 2008 to 2011.
So, where are we today? We are certainly in a recovery of home sales but still well below the historical average. I believe we’ll experience several more years of a strong sales recovery, at least into 2014 and probably into 2015. I expect the number of home sales to surpass 50,000 in 2014 before beginning the drop back to the historical average. I believe that we’re going to continue to experience a strong seller’s market for at least a few more years!