Realtors and others in the industry are trumpeting a robust housing market in the Denver area and throughout Colorado in 2013, saying this year will be a continuation of the rebound the market enjoyed in 2012 — and perhaps even more.
Analysts and academics who specialize in real estate, however, aren't convinced. They say the local market is more likely to cool down from last year's astonishing growth that followed five difficult years — pointing to uncertainty in Washington and an economy that's still finding its footing.
Zillow reported this week that the median home value in the Denver area rose 12.1 percent last year compared with 2011.
Metrolist reported that home sales in the Denver area last year rose 18 percent from 2011, contributing to a 9 percent increase in the average sales price over 2011.
Tim Brannon, a mortgage banker at Catalyst Lending in Greenwood Village, sees that growth continuing.
"The popular opinion is that it's going to be quite the active market," Brannon said. "A lot of people have been sitting on the fence, and now there is a general impression that the economy is improving.
"Home prices are still low, with historically low mortgage rates. That, coupled with low inventory and pent-up demand, should make for a fairly hot market."
Brannon said homebuyers are realizing that low interest rates won't last forever. The interest rate on the average 30-year, fixed-rate home loan is about 3.4 percent. Brannon believes it is inevitable that, sooner or later, 30-year loans will climb back to about 5 percent, and that means homeowners' monthly payments would be 20 percent more than they are now.
"I think we are going to be really busy this spring and summer," Brannon said. "I would say that, potentially, we could be looking at the best market we've seen in 10 years.
"We had days in the 1990s when people were trying to outbid others for property," he said. "There's a possibility that could happen again this spring. "
Deviree Vallejo, a broker with Kentwood City Properties in Denver, said that although low inventory makes finding houses more difficult, "it's already been crazy. We usually don't have any activity until late February or March."
Vallejo said homes in some areas are routinely getting multiple offers and that the winning buyer often pays cash.
One of Vallejo's clients can attest to that. Heather Gilman, who is living in Vail but hopes to relocate to Denver, has been looking at several Denver neighborhoods. This week, she missed out on a property in Highland.
"I put in a full-price offer on a property that I felt was priced competitively for the area and lost to what I'm told was an over-full-price offer," Gilman said. "That's frustrating. The market is very competitive, a little unbelievable. If homes are priced right, they're off the market after only a day or two."
Peg Schroeder, a broker with Tupper's Team Re/Max in Evergreen, has been putting in 15-hour days because of booming business.
"It's been unbelievable," Schroeder said. "Up at 5:30, not getting home until 9 or 10. This year has taken off with a bang, and we expect it to really increase even more. Our team felt like 2012 was sort of a turnaround year and 2013 will be even better."
Home sales in the Evergreen/Conifer area serviced by Schroeder were up almost 30 percent in 2012 over the previous year.
Other observers predict more modest gains this year.
"When I saw Zillow's report of a 12.1 percent increase in metro prices, I was stunned," said Tom Thibodeau, academic director of the University of Colorado's Real Estate Center in the Leeds School of Business. "That is twice the national average of 5.9 percent.
"It could happen again in 2013, but I would really be surprised. A double-digit rate of appreciation is scary to me. It's just not sustainable. I would expect something more like 6 percent this year, which is still phenomenal."
Ira Selkowitz, senior instructor at the CU Denver Business School's Bard Center for Entrepreneurship, agrees.
"I would be somewhat hesitant to predict a consistent double-digit increase at this point," he said. "I'm very optimistic but not willing yet to categorize this as a sustainable boom."
Selkowitz is concerned that the stalemate in Washington over the budget, the debt ceiling and sequestration could hurt the housing market.
"I would be more confident making a prediction when Congress and the president reach an agreement that is more than three months in duration," he said. "I don't like the fact that the can keeps getting kicked down the road.
"Once we get over that hump, I think the market will open up. There will be less uncertainty, and companies may be more willing to hire. It's jobs that will really impact the housing market."
Mark Levine, director of the Burns School of Real Estate and Construction Management at the University of Denver, shares Selkowitz's concern about government gridlock.
"There are legitimate concerns about debt, and what happens if unemployment rises and interest rates go up?" Levine said. "There is so much uncertainty.
"Brokers tend to be optimistic, and I'm not saying that's a bad quality," he said. "The housing market has improved, but I wouldn't be inclined to say this will be the best market in 10 to 15 years. For everyone's sake, I hope it is because so many things feed off the housing market. But I like to be realistic."
John Mossman: 303-954-1479 or email@example.com