Do the Signs Point to a Coming Recession?

Updated: Apr 30, 2020

Are we headed into a recession in 2020? Here’s what you need to know.

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As they have been since last year, many are still asking about whether we should expect a recession in 2020.

Real estate cycles typically last seven years from peak to peak, with a trough or low point in between each peak. For the Denver metro area, the last peak came in 2005 or 2006. However, there was another peak in the market in 2017, but not all areas experienced it. Some areas were still seeing an all-time high in 2019, and we expect to see similar in 2020. Since Denver has had population booms, relocation transplants, and a great job market lately, we have a really strong real estate market.

I don’t have a crystal ball that allows me to predict with certainty whether a recession is coming, but every sign we’ve been seeing suggests that we’re going to have a pretty balanced market this year. Some neighborhoods will favor sellers, while others may favor buyers. The signs of recession aren’t the same as we saw last time when loans were being given to people who couldn’t (or shouldn’t) qualify.

Every sign we’ve been seeing suggests that we’re going to have a pretty balanced market this year.

Another sign that points to a balanced market: If you look around the nation, there are already areas that have begun to decline. While some of those declines are relatively significant, they’re nothing like the 2008 drop we had before.

Many areas aren’t doing as well as Denver, so if you live in the metro area, now is a great time to become a homeowner or investor. On average, we’re seeing about 12,000 new home starts per year; properties closer to the city are very desirable in terms of the rental market, and in many cases, investing in them competes with stock market investments.

This year is an election year, which means that things could go a little topsy-turvy, depending on how the election goes. Still, all the signs point to us having a great market year; if that changes, I’ll be the first to let you know.

If you’d like to hear more predictions about the 2020 market or if you have any other questions, don’t hesitate to reach out to us. In the meantime, have a fantastic year!

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