When there’s little appreciation and minimal confidence in the market, people tend to stay put. But life circumstances change. Kids are born, children go to college, adults retire. In short, our housing needs change as our life circumstances change. An improving housing outlook may unleash years of backlogged demand.
I certainly saw this phenomenon in California in the late 1990s... and I saw how a little confidence in the market went a long ways toward creating a positive "snowball" effect in the housing market.
For the past few years, moving hasn't been "cool" - not when you have no equity and you're fighting just to make a mortgage payment. But when your home starts to act like an "investment" again (i.e., actually appreciating in value), people become much bolder and much more willing to take the next step.
Psychology has always been a huge factor on Wall Street - watch and see if that same psychology doesn't help propel housing in a big way throughout Colorado in 2008.