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Are we “too popular”? With rapidly rising price appreciation, renting may prove safer than buying

​Due to the sizable 7.8-percent annual gain in home prices, some economists have started raising alarms that Denver’s housing market has entered “unbalanced fundamentals” territory. Based on the quarterly Beracha, Hardin, & Johnson “Buy versus Rent (BH&J) Index”—a study that incorporates property appreciation and adds additional rental, maintenance and alternative management data streams in order to signal changes within a housing market. The closer the rating is to 1.0, the more “unstable” market conditions are, and the “safer” it is to rent.

Denver (along with Houston and Dallas) is one of only three cities that ranked as “worrisome.” Dr. Eli Beracha, the index’s co-author, shared that the last time scores of this magnitude were recorded, housing market crashes soon followed. 

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