Sellers are Feeling the Love In Denver!
The Denver Metro Real Estate market continues to be a strong seller’s market, as low inventory and an abundance of buyers continue to absorb the new homes that come on the market. Some of the lack in inventory is seasonal. As you can see from the graph below, the winter months tend to have fewer new homes listed. This is due in part to holidays and weather of course. This seasonal shortage of homes does end up creating what in the past couple years has looked like a feeding frenzy in the spring as homes start hitting the market. This of course is why many sellers wait to list their home until spring in hopes of getting multiple offers and above asking price contracts. The thing I like to remind sellers is they can get just as many strong offers when they take advantage of the winter months. There are still plenty of buyers ready to snap those homes up without as many competing properties nearby.
For buyers, often the spring season cannot come soon enough. It often feels like a waiting game to find homes that meet some of their criteria. There are some schools of thought that the 2017 season may finally see some leveling off for those buyers in the $500,000 and below price ranges. The reasoning is that as interest rates slowly rise, which directly effects buying power, this may finally trigger some of the sellers who have been sitting on their properties to list them while the buying power is stronger. So the thought is we will see more inventory this year than in years past.
Rick Pederson, a financial company executive and real estate consultant, who was recently interviewed by the Denver Business Journal, believes that interest rates will rise this year, but not enough to effect mortgage rates too much. Rates he thinks will hover around the 4.5% mark, which is still historically low.
Another school of thought is, as new developments continue to come online and ease the rental market some, investors may start selling off rental properties. Again these are some of the predictions, but only time will tell what the 2017 market brings.
So does this mean that home prices will decrease? Most likely they will not. Home prices will only start to level off. Due to the continued job growth in the Denver Metro area and population increase the demand for housing is not going to slow anytime soon.
Recently the forecast from the Colorado Demography Office, was that Colorado’s populations is going to reach 7 million by 2030. Currently there are 5.5 million people in the state. Colorado is ranked the seventh fastest growing state behind Utah, Nevada, Idaho, Washington, and Oregon. The state of Colorado added 91,726 people in 2016 according to a recent Denver Business Journal article.
From 2012 to 2016 the median price of a home in Denver increased by approximately 49%. That means that the median price home in 2012, which was around $230,000 is now around $349,000.00. That being said the areas in Colorado that are predicted to see the most growth are along the I-25 corridor from Pueblo all the way to Fort Collins. Castle Rock in particular is poised to be one of the fast growing areas.
So where does this leave you as a buyer or seller, well as I have said before deciding if the time is right for you and your family to either purchase a home or a sell a home really comes down to your individual goals and situation. Does it make sense for you at this time and what is motivating you to make a change? The biggest mistake people make in real estate is trying to predict or time the market. When it comes to real estate you want to look at your long term goals. How long do you plan to live in a certain area? Do you plan to keep a home as an investment property or trade up? Are you looking to downsize? If you are trying to decide how to move forward in this market and need to just talk things over, I am always happy to buy you a coffee and talk things through with you. Thanks for reading, you can subscribe to our newsletter. Just email us at email@example.com.