DENVER REAL ESTATE NEWS
FROM ECCENTRIC BILLIONAIRE TO MINIMALIST WOULD-BE ASTRONAUT
The fear of a pandemic that has been ravaging the globe had many people rushing to acquire as much real estate as they could. In many areas, housing supply was already limited when the global recession began, and costs were continuing to climb. Some purchasers were finding themselves in difficult situations owing to lack of housing. Many did not want to be stuck renting forever, especially if they suddenly found themselves working from home full-time in an apartment. Others were wealthy investors looking to grow their portfolios while interest rates were at all-time historic lows, seizing the opportunity to build their personal wealth. But one man publicly decided he would take the opposite approach.
Elon Musk, the CEO of both SpaceX and Tesla and now the wealthiest person in the world (again), has already made a number of headlines. One recent example is his offer to compete Vladimir Putin for "single combat" over the current Ukraine conflict. In 2020, he informed the world, "I'm selling virtually all of my physical possessions," and that he would, "own no house."
Many people derided him at the time, but sure enough, he sold off seven houses worth almost $130 million that he owned in California. The final one was a $30 million mansion near San Francisco that went for sale in December. When someone on Twitter asked him why he was selling his real estate assets, he responded with just "Freedom."
Elon Musk has stated that his ultimate objective is to use his great money towards SpaceX's plan to send people to Mars by the year 2050. “It'll take a long time for us to build a city on Mars,” Elon added. “I'd want to be able to give as much as I can toward the Martian city,
(Information Sources: The Wall Street Journal, Forbes, The Business Insider, Bloomberg, and Google)
BRACE YOURSELF... HOME PRICES UP 30% OVER 5 YEARS
Meanwhile, on earth, the local real estate market in Metro Denver is still limping along at a sluggish pace. Housing inventory remains extremely tight, with around 1,200 active listings at the end of February. Home prices have risen by around 7% over the past month. And they've increased by almost 17% in the last year. That's about how things have been going lately, and with the current supply and demand imbalances in the market, these trends are expected to continue throughout at least the second half of the year, if not longer.
The most shocking aspect of DMAR's year-over-year market data for February is the chart. This table compares market activity over the last five years to previous years. Thus far, new listing data in 2022 versus prior four-year average shows that there has been a 18% decline in new listings during this time period. Average home prices are up from about $450K in February 2018 to almost $630K last month. That amounts to almost a 30% price increase over 5 years!
This is fantastic news for people who own their homes already and have a lot of equity in them. And it's wonderful news for sellers wanting to get rid of houses like Elon did. However, for many first-time buyers, it isn't as beneficial. Some people will be required to raise their monthly spending limits or continue renting. It's still worth the investment if you can buy a home. Home prices are not anticipated to go down in the near future.
If Denver Real Estate interests you and you are looking to learn more? Check out one of our public training classes!