Current Status of Front Range Cities
Denver, Colorado Springs, and Pueblo
(Last updated 3/25/2022)
This page is a snapshot of the state of the real estate market from Denver, Colorado Springs, and Pueblo. Shown are three graphs below (Figure 1.) As I’m most interested in the Front Range of Colorado from Denver to Pueblo, these areas are specifically covered here. As far as understanding the graphs, generally, green means good for a seller, and red means good for the investor.
Figure 1 - Indicators for Denver, Colorado Springs, and Pueblo, Colorado real estate
Analysis
Wow! Three months ago, the market was weakening for Colorado Springs, Pueblo, and Denver. In December 2022, the Six Trigger Alert Reports (STAR) Momentum indicators for Pueblo and Colorado Springs were strong both short-term and long-term. Denver looked like it had some concerns in the long term, but otherwise appeared strong in the long term. It still does, but there are immediate concerns. The Technical Analysis Point Score (TAPS) graphs now suggest that all these areas are solidly weak or verging toward weak.
State of Colorado
From a wealth accumulation point of view, Denver, the largest market in Colorado, reflects the state of Colorado. All three graphs indicate that these areas in Colorado are still appreciating markets but appreciation has dropped significantly to 2-3%, less than half of what the appreciation was in mid-December.
Notice that the long-term and short-term moving averages crossed over in the last year and continue to diverge.
We’re seeing a continuing dip in appreciation which we have been anticipating since the two moving averages crossed last year. If it continues in this manner, expect housing prices to drop sharply and monthly inventory to grow in all three markets. At this rate, within 6 months it will be a depreciating market.
Figure 2 - Wealth Accumulation
Figure 2 shows the wealth accumulation as a percentage of the state of Colorado. Green areas are when the market is appreciating and white areas are when the market is depreciating. But if you look at the green (10 quarters) and red (20 quarters) lines of moving averages, you’ll notice that the market changes when these two lines cross over each other. You can see at the far right that these two lines crossed over signifying a significant change in market direction for Colorado that is now manifesting itself. Colorado has ended its long upward trend that started in 2012 and wealth accumulation has dropped precipitously by >75% since the high last year.
The next graph (Figure 3) is the Six Trigger Alert Reports (STAR). There are six momentum indicators ranging from short-term indicators on the left to long-term indicators. Roughly, green is good if you’re a seller, red is good if you’re a buyer. The indicators go back in time as you go down each row on the graph. Indicators for the current quarter (top row) suggest that the short-term through long-term indicate a weak seller’s market for Colorado. A year ago, the bottom row, was still pretty good. (These graphs are from HousingAlerts.com. This is just a quick snapshot of what HousingAlerts.com has to offer. Go to my home page to get a free version for your state.)
Figure 3 - STAR indicators
The next graph (Figure 4) indicates the Technical Analysis Point Score (TAPS.) Each market is graded using a series of technical criteria. (I don’t really know the details.) Again, green is good, and red is bad. You can see that Colorado has moved deeper into the weak zone.
