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<br /> <br />Denver <br />As reflected in the chart above, Denver MSA home prices have increased dramatically from <br />2012, largely because a dwindling inventory of for-sale listings and Colorado’s strong population <br />growth. Colorado, and Denver in particular, continue to attract new workers from more <br />expensive coastal markets, and builders are not building nearly enough to keep up, especially <br />with regards to first time homebuyers. <br /> <br />There are some signs, however, the housing market is softening (see a recent Denver Post article <br />here). <br /> <br />Minneapolis <br />According to the Governor’s August 2018 Task Force Report on Housing (available here), the <br />Minnesota and Minneapolis housing market can be summed up in roughly one sentence: A tight <br />housing market leads to higher demand and increased home prices. <br /> <br />A healthy housing market is supposed to have a vacancy rate - the proportion of vacant homes <br />listed for sale - of 5%. The report suggests vacancy is 2.2% in the Twin Cities area, which the <br />authors say is behind a 9% increase in home prices from last year. The report also notes <br />Minnesota homes are 26% more expensive on average than those in neighboring states. The <br />report also goes on to say Minneapolis experienced a dramatic drop in the housing supply around <br />2010 and 2011, followed by a sharp uptick in home prices in 2012 (also demonstrated in the <br />chart above). In addition, more than 554,000 Minnesota households struggle to afford quality <br />housing, a 58% increase since 2000. <br /> <br />The Governor’s solution: build 300,000 more homes by 2030, but there isn’t much detail on how <br />(or where) this would be accomplished, and recent data suggest current housing market trends <br />will continue into 2019. <br /> <br />Milwaukee <br />Milwaukee has a similar story to Denver’s and Minneapolis’s in that a tight housing market has <br />led to increased home prices, but the issue seems to be concentrated in certain parts of the <br />metropolitan area. Like many other cities, a boom in luxury housing has not translated into <br />alleviating the affordable housing crisis. While Milwaukee’s overall vacancy rate is a relatively <br />healthy 5%, it’s closer to 20% in the impoverished neighborhoods on the north side. <br /> <br />Most building starts in the counties of Milwaukee, Ozaukee, Washington, and Waukesha <br />continue to be focused largely on higher-end houses. Those factors, along with plentiful jobs, a <br />strong economy, and continued historically low mortgage interest rates, suggest a housing