Economists Forecast for 2009 - Denver, CO

2009 Denver Metro Area Economic Forecast

On Tuesday, January 27, 2009, I had the opportunity to attend an economic forecast session sponsored by the Jefferson County Association of Realtors. Ted Jones, Senior VP and chief economist at Stewart Title and Patty Silverstein, President, Development Research Partners of the Denver Metro Chamber of Commerce were the speakers.

Some of the key points regarding the general economy:

• Oil prices will increase again within 36 months, to $4 or $5 per gallon for gasoline.
• In 2009, the average thirty year mortgage rate (conforming) will be around 4.9%.
• Inflation will head upwards in 2010 and mortgage rates will be in the mid to high 6% range in 2010 and 7+% in 2011.
• We should be encouraging buyers to purchase now. Waiting for another $10,000 drop in price just to get the very best deal on home price but ending up paying a 1% higher mortgage rate doesn't make sense. You are better in the long run to pay 10% more than the bottom price with a lower interest rate.
• Apartment vacancy rates will stay steady but commercial vacancy rates, such as office and retail, will increase. Values for commercial properties will decline in the next 3 years.
• We will the see the light at the end of the tunnel during the 4Q of 2009 and anticipated recovery in 2010. All eyes are on Washington.
• Denver unemployment will be lower than the overall US.

After hearing from the speakers, we all participated in breakout groups to discuss topics of short sales and foreclosure sales, the mortgage market and residential real estate.

In the Denver Metro Area, certain neighborhoods have been hit hard with foreclosures and short sales while others have seen a modest appreciation.  Quoting national averages on declining home prices is deceiving. All real estate is local and further in-depth analysis is needed. Typical of real estate, it is "location, location, location."

If you live in the Denver Metro area and would like to know how your neighborhood is doing compared to the previous 12 months, please email me .