Denver’s real estate market has been sizzling, holding strong despite fluctuations in interest rates. The housing market in the Denver metro area, much like our warm summer days, continues to stay active and competitive. Though new listings have slowed, Denver’s home prices have shown a slight dip of just .34% from the previous year, signaling what could be one of the shortest housing recessions the market has seen.
For buyers and sellers in this environment, understanding the nuances of the market is key. Let’s dive into the state of Denver real estate in 2023 and how you can take advantage of this ever-evolving landscape.
Current Market Trends: Fewer Listings, Steady Prices
One of the biggest changes we’ve seen in 2023 is the decline in new listings. Nationally, listings have dropped by about 20%, and Denver has seen a similar 23.2% decrease compared to last year. However, this drop in available homes for sale doesn’t necessarily mean the market is in decline—just that fewer people are opting to sell due to high interest rates and economic uncertainty. But, despite the decreased number of homes available, prices have remained relatively stable, with a slight decrease of just .34% in average home prices compared to last year.
While this might seem concerning to some, it’s important to note that home prices are not plummeting. Instead, they are stabilizing after a period of rapid growth. The current conditions are actually presenting fantastic opportunities for both buyers and sellers in Denver.
Impact of Interest Rates on the Market
Interest rates have been a significant factor in shaping the market this year. Higher rates have had an effect on homebuyers’ purchasing power, but savvy buyers have been quick to adjust. They’ve learned to surf the waves of this unpredictable market by focusing on homes that are reasonably priced and move-in ready.
The result? Homes that are in good condition and priced appropriately are receiving full-price offers and often going under contract within 14 days. This indicates that while interest rates have increased, there are still plenty of motivated buyers who are ready to make a move, especially when they find a property that fits their needs.
The Next Big Shift: Lower Interest Rates and Rising Prices
While the market is more balanced than it has been in recent months, there’s an exciting shift on the horizon. As inflation continues to decrease, mortgage interest rates are expected to follow suit. This could be the turning point where we see an influx of buyers re-enter the market. When rates dip back into the low 6% range, we can expect more competition and a faster-paced market with homes getting multiple offers again.
If you’re thinking about buying or selling in the next few months, now is the time to start preparing. A window of opportunity is coming for both buyers and sellers.
Your Secret Map to Home Buying
As a real estate agent in Colorado, I’ve developed a “treasure map” for buyers to navigate the competitive landscape. Certain neighborhoods in Denver and surrounding areas are more likely to see multiple offers due to high demand. If you’re targeting these areas, it’s important to be ready to move quickly and make your best offer.
.png)
(courtesy of First American Title/Megan Aller)
However, there are also areas with less competition, where you can negotiate more easily and avoid the frenzy. These areas, marked in yellow, green, and blue on the map, offer buyers a better opportunity to find a home without the added pressure of competing with multiple other buyers.
By focusing on these less competitive areas, buyers can negotiate better terms, secure homes that meet their needs, and avoid bidding wars, making the home-buying process smoother and less stressful.
Property tax appeals in Colorado have tripled this year, a trend that’s not surprising considering property tax bills are slated to increase by ~50+% next year. If you’ve appealed, hang tight! You should hear back by mid-August. Displeased with your assessor’s final valuation? You still have a chance to appeal with your county board of equalization.
Keep an eye on the ballot this fall. Prop HH is aiming to reduce property taxes. However, it’s worth noting that this proposition also reduces TABOR refunds. Information on Prop HH is gradually making its way into the spotlight, and I’ll make sure to update you as I learn more.
To Rent or To Buy: That is the Question
With higher interest rates making buying seem like a pricier option compared to renting, many individuals are faced with the decision of whether to rent or buy. However, when you look at the long-term picture, homeownership still presents an excellent financial opportunity.
Denver’s rental market has been increasingly competitive. Rental rates have surged by 3.2% to 8.54% over the past year, resulting in an average increase of $1,200 annually. This steep rise in rental costs makes it clear that renting is becoming increasingly expensive.
In fact, Denver has seen some of the highest rent increases in the nation. Since 2009, median monthly rents have jumped by an astonishing 82%, from $856 per month to $1,554, outpacing income growth in the area.
The long-term benefits of homeownership, including building equity and stabilizing your monthly housing costs, make it a compelling option. If you’re currently renting and frustrated with rising costs, it may be time to explore the possibility of buying a home, even if interest rates are slightly higher than before.
Long-Term Wealth Building Through Homeownership
Despite the challenges presented by higher interest rates, the benefits of homeownership far outweigh the temporary rise in mortgage payments. When you own a home, your monthly payments are more predictable, and you build equity over time.
Not only does this help you create long-term financial stability, but it also provides a foundation for wealth building. As real estate appreciates over time, your home’s value can increase, providing a return on investment when you decide to sell in the future.
Whether you’re looking to upgrade, downsize, or enter the market for the first time, investing in real estate today sets you up for success in the years to come.
FAQs
- Should I wait for interest rates to go lower before buying a home?
While waiting for lower rates might be tempting, the current market presents a unique opportunity to negotiate better terms. Act now before competition increases. - How can I navigate multiple offers in a competitive market?
Focus on making a strong offer, be flexible with your contingencies, and work with a real estate agent who can help you stand out. - What should I know about property tax appeals in Colorado?
Property tax appeals have surged this year, and if you’re unhappy with your property’s assessed value, you can file an appeal with the county board of equalization. - Is buying a home still worth it despite higher interest rates?
Yes! The long-term benefits of homeownership, such as building equity and stabilizing monthly payments, make it a worthwhile investment, even with slightly higher rates.
Conclusion: Seizing Opportunities in a Changing Market
The Denver real estate market is full of potential, especially for those who act now. With more inventory available, favorable interest rates, and the opportunity to negotiate, now is the time for both buyers and sellers to take advantage of the shifting market. Whether you’re looking to buy, sell, or invest, working with an experienced real estate agent like me, Lauryn Dempsey, ensures that you make the best decisions for your financial future.
Why Work with Lauryn Dempsey as Your Real Estate Agent in Colorado?
Navigating the dynamic Denver real estate market requires a knowledgeable and experienced real estate agent. With years of experience in the Denver Metro Area, me and my team can help you understand the current market conditions, identify the best opportunities, and develop a personalized strategy that works for you.
From helping you find a home that fits your needs to negotiating the best possible deal, Lauryn Dempsey is here to guide you every step of the way. Whether you’re buying, selling, or transitioning between homes, I’ll provide the expert advice you need to make informed decisions and succeed in today’s competitive market.