NAR Chief Economist Speaks Out On Colorado Real Estate

 Dr. Lawrence Yun, Chief Economist for the National Association of Realtors, recently spoke in Denver about the economy and home sales in particular. NAR has been lobbying congress about the importance of stabilizing home prices, which will then stabilize the assets of banks, insurance companies, investment firms, and individual homeowners.  He is hopeful that the $8,000 credit to first time buyers will act as a strong stimulant to get these first time buyers "off the fence".

 

Dr. Yun showed statistics that demonstrate how much healthier Colorado's real estate markets are, especially when compared to the four problem states: California, Nevada, Arizona, and Florida.  There is good evidence that Colorado has already bottomed out and should have a solid summer sales season.  California, which has suffered a severe downturn, is now showing renewed activity.  Lower priced California homes are selling well, with multiple bids becoming common.  It may be at the "tipping point" where everyone jumps back into the market.

 

When asked about inflation, Dr. Yun said that inflation is inevitable, given the money being pumped into the economy, so interest rates will be driven up from their current, phenomenally low rates under 5.0%.  Those that wait for home prices to drop or interest rates to drop further will probably miss the combination of low prices and low interest rates.

 

Colorado is a key growth market for real estate over the next 20 years.  It continues to enjoy a strong net immigration rate, which should translate into increased demand for mountain resort real estate.  He also talked about the influence of the baby boomers, many of whom are buying retirement homes.  Mountain Realtors® have also seen the effect of the wealth transfer from the depression generation to the baby boomers, resulting in boomers buying mountain homes.  While resort real estate sales have been slow the past couple months, there is pent up demand.  The only real question is "when will the buyers get off the fence"?