Colorado Springs Home prices (Denver: apartment, leasing, mortgage)

[Jobster]

This won't end well.

[smdensbcs]

Originally Posted by Jobster

This won't end well.

Really? Home prices in COS have barely budged in 10 years. Before that they weren't exactly going bonkers like NYC or coastal CA, more like a gentle upward glide more or less in line with inflation. Imagine if the stock market was basically flatlined for 10+ years, then it goes up 5-10% in Year 11 and people are all upset like "this won't end well." I mean, really?

From my (admitedly warped) perspective of someone who grew up in a region where houses rose in value exponentially between roughly 1978-1990 ($175K became $1.4M without any improvements to the structure whatsoever), watching a $275K in 2007 COS house rise to $315K or so 10ish years later and for people to act like the sky is somehow falling is basically just amusing. Get back to me when that same house has gone up to over a million or even two like some other real estate run ups and we'll talk. I mean, c'mon. Seriously. You call this a bubble? Barely a few percent rise over 10 years? That's like being afraid of the sun turning into a red giant and swallowing the earth in 4 billion years. Now THAT'S something that won't end well.

[DoodlemomCoS]

I admit we had to act really fast to secure the house we bought. I had been researching and watching local listings in areas we felt were the best fit for us for 6 months and the properties were selling within a week. It's hard when you are buying from out of state.

Right now my folks want to move up and their price point is under $250k for a small home and the competition is pretty intense. With the current market it will take them a while to get here as they cannot drop everything when they see a new listing to drive up here, look at a house and make an offer that same day.

[JohnCurtisEstes]

Originally Posted by smdensbcs

Really? Home prices in COS have barely budged in 10 years. Before that they weren't exactly going bonkers like NYC or coastal CA, more like a gentle upward glide more or less in line with inflation. Imagine if the stock market was basically flatlined for 10+ years, then it goes up 5-10% in Year 11 and people are all upset like "this won't end well." I mean, really?

From my (admitedly warped) perspective of someone who grew up in a region where houses rose in value exponentially between roughly 1978-1990 ($175K became $1.4M without any improvements to the structure whatsoever), watching a $275K in 2007 COS house rise to $315K or so 10ish years later and for people to act like the sky is somehow falling is basically just amusing. Get back to me when that same house has gone up to over a million or even two like some other real estate run ups and we'll talk. I mean, c'mon. Seriously. You call this a bubble? Barely a few percent rise over 10 years? That's like being afraid of the sun turning into a red giant and swallowing the earth in 4 billion years. Now THAT'S something that won't end well.

Why did I pay $67K for a brand new 4 BR/2 BR house in '86 and recently sell it for $179K?


Another one that I also own and now live in (used to be a rental) I paid $96K back on '92 and now it is worth +- $225K based on comparables.

[smdensbcs]

Originally Posted by JohnCurtisEstes

Why did I pay $67K for a brand new 4 BR/2 BR house in '86 and recently sell it for $179K?


Another one that I also own and now live in (used to be a rental) I paid $96K back on '92 and now it is worth +- $225K based on comparables.

Sorry, but your point is? That a home price increase of 2.5x over THIRTY years is somehow strange and unusual and indicative of*some sort of bubble? That a doubling in house value since 1992 (TWENTY-FOUR YEARS AGO) is what, a sign of pending doom and apocalypse like the previous poster is suggesting? I prefer to keep it civil in these discussions but this is really a difficult argument to understand. My parent's 1,400 square foot house on a tiny lot in Santa Monica, purchased for $175K in 1978, is today valued at $2.7M and has only had a do-it-yourself kitchen remodel. The lot without the small bungalow on it is valued at $2.9M. THAT is a run-up in housing prices. What you and others on this forum are describing is the natural effect of inflation over decades, where the cost of housing, like the cost of gasoline, milk, bread, basic labor, etc., etc., etc., etc. rises over time. How much did a gallon of milk cost in 1986? A dozen eggs? A loaf of bread? Was $30K a year considered a reasonably solid annual income? Why are we even having this discussion? Colorado Springs is NOT in the midst of some sort of housing bubble crisis making basic housing inaccessible to everyone but multi-millionairres. It's just not. Sorry.

[Wittgenstein's Ghost]

Originally Posted by JohnCurtisEstes

Why did I pay $67K for a brand new 4 BR/2 BR house in '86 and recently sell it for $179K?

That barely outpaces inflation. $67k in 1986 dollars is equivalent to about $162k today.

[Jobster]

Originally Posted by smdensbcs

Really? Home prices in COS have barely budged in 10 years. Before that they weren't exactly going bonkers like NYC or coastal CA, more like a gentle upward glide more or less in line with inflation. Imagine if the stock market was basically flatlined for 10+ years, then it goes up 5-10% in Year 11 and people are all upset like "this won't end well." I mean, really?

From my (admitedly warped) perspective of someone who grew up in a region where houses rose in value exponentially between roughly 1978-1990 ($175K became $1.4M without any improvements to the structure whatsoever), watching a $275K in 2007 COS house rise to $315K or so 10ish years later and for people to act like the sky is somehow falling is basically just amusing. Get back to me when that same house has gone up to over a million or even two like some other real estate run ups and we'll talk. I mean, c'mon. Seriously. You call this a bubble? Barely a few percent rise over 10 years? That's like being afraid of the sun turning into a red giant and swallowing the earth in 4 billion years. Now THAT'S something that won't end well.

I cannot predict the future; however, outside of the obvious fragility of the economy based upon debt to income, when considering factors such as median income to median home prices, I believe the "black swan" will arise from the energy market.

You will see the price of crude continue to fall, possibly even under $30/barrel, although I cannot underestimate the power of speculation, as the banks have done a tremendous job at manipulation the oil market above it's true value thus far. I understand that the true value is subjective, but if you were to base it on economic factors alone, prior to crude being traded on the OTC market, it is unlikely the price would remain as high as it is today.

Anyway, I do not believe the crises in the energy market can be contained due to the duration of oil being under $50 a barrel and unprofitable for almost every energy company if you consider the administrative costs as well as the costs of good sold. So it is likely that a large portion of the high yield bond market will implode, which will cause banks highly leveraged to derivatives, such as Deutsche bank for example, to enter into a crises. While the oil assets are frozen, production will decline substantially which will likely cause an oil shock.

So, you have the banks in a crises, and then oil is suddenly north of $100/barrel and then all of a sudden the leverage bomb explodes because people didn't rationalize the possibility that this could happen. Everything will go up in price in the event of an oil shock, including necessities like food. This will eat into people's expenses, and they won't have the ability to pay off their mortgages in some cases, and foreclosing on their houses.

I don't believe that Colorado Springs will be immune from this. I'm not looking forward to this.

[TCHP]

As long as we have a Federal Reserve that loans the government money, we will have inflation that will slowly escalate prices and values. Sure there will be monetary crisis' and fluctautions within that context, but we will always have inflation.

[Vision67]

If you own you home free and clear the value can fluctuate and it really doesn't matter.

A home is not an investment. It is a place to live.

[JohnCurtisEstes]

Originally Posted by Vision67

If you own you home free and clear the value can fluctuate and it really doesn't matter.

A home is not an investment. It is a place to live.

And unlike rent that you throw away every month you actually have an asset you can sell down the road.


I always think about people who lease cars too. You pay a lot of money each month for the car but then at the end give it back to the dealer. No asset to sell!