2018 is expected to be a big year for Real Estate in Denver. Not only is Denver (still) leading the way in job growth, but our natural landscape and outdoor attractions are getting tons of people to move here. Sounds great right? not so fast. Current Administration's proposed tax plan changes are expected to have HUGE implications for Real Estate, throughout all levels. The exact details remain largely unknown for now, but the mortgage interest deduction, a HUGE help for buyers (and therefore seller), is seemingly on the chopping block. The Nation Association of Realtors and the National Home Builders Association are both lobbying to the keep the deduction in place. Other tax plan changes will likely help Real Estate; and, economics will likely balance out, but a major short term shake up would be absolutely certain to happen.
So what does this mean for NEW homes in Denver? well for starters, Builders and Developers are powering full steam ahead, but there's still technically a shortage of homes. Depending on who you ask, that shortage is only in price points below 400k, where most buyer's can afford the mortgage payments. The tricky part is construction costs. over the last 4 years, the cost to build a new home have risen nearly 50%, and land costs have shot up as well. It's next to impossible to build a home and sell it for a gain under 400k. So trade off here is that new home buyers, for entry level single family homes, will keep needing to drive further and further out to the suburbs into newly established neighborhoods on the outskirts of town. In addition, these buyers will also be met with smaller homes, and sub-par interior and exterior finishes, as builders strip down the products to save any dollar they can on construction costs.
Albeit, these home buyers are just happy to find their piece of Colorado that they can afford, and receive a new home warranty to boot. In total, New Homes: still a good buy, as long as the home is right FOR YOU, and the way YOU live. There are plenty of great new areas to live in, and the new neighborhoods have a lot of amenities to add to the appeal. We always say, "don't force it", if a home just isn't for you, wait, there's no need to force a purchase for a home that doesn't fit your immediate needs. There's always another home.
No doubt, 2018 will be a good year, even if we do have some shake ups, as (un)expected as they may be.