As we inch closer to the end of the year, we see seasonal fluctuation in the Denver real estate market.
With home prices up over 15% year or year, we still see a “mellowing” of the market during the fall/early winter months. With less inventory hitting the market, we see that the buyer pool has also decreased in size. When a home hits the MLS, there may be 5 offers instead of 25 offers. While it is still a very competitive environment, especially in the $300-$500K price range, we see that offer prices are not nearly as high as what we saw in the spring months.
Good news, in August, we saw over 10% more homes on the market compared to last August! We are still down over 25% in inventory year-over-year. With fewer offers on each home than we saw in spring, buyers have more opportunities than before!
Now, the real juicy bit I want to chat about is interest rates. With mutterings from Jerome Powell about increasing interest rates, what does that mean for the Denver market?? When interest rates go up, even just a quarter of a percent, that can adjust what a buyer can afford. The increase in interest rates will then slim the buyer pool. Sellers will have fewer eyeballs on their homes than before.
It’s your time to move if you’ve been thinking about purchasing a home. The saying is, “buy when interest rates are low, not when home prices are low”. When you factor in higher interest rates, that same $500K home you could afford before could now be around $475K. And your monthly payment on that same home could be more expensive as well.
If you are waiting for prices to come down before you enter the market, my advice is don’t wait. October is a GREAT time to enter the market as a buyer. With homes seeing fewer showings and fewer offers, this is your opportunity to snag the perfect home.
Sellers, my advice to you is to price wisely. We are not in the spring selling months, so getting the list price of your property right the first time is critical. If you shoot for the stars with a cray list price, you could be sitting on the market longer than anticipated or getting fewer/under asking offers. Buyers have more opportunities to look at more homes, so you’ve got to make yours shine. Whether that’s making improvements, pricing wisely, or freshening up your curb appeal, buyers are taking notes. If you’ve got a great home, in an excellent location, priced well, you still see great market activity!