Starting in June of this year, trends have begun to show a slowing down of home sales in the Denver area. First, take note of what times of the year are the busiest for home sales. The article, When is the Best Time to Sell Your Home? tells us that home buying tends to slow down during the Fall and Winter months. This year we saw the housing boom in Denver remain steady and demand high until around June when we started to see closings begin to go down while inventory remains stable and is beginning to rise.
Will housing prices drop in Colorado?
Aldo Svaldi of the Denver Post reports that “Buyers closed on 5,820 homes and condos in metro Denver last month, down 12.3% from June’s count and 21.3% from July 2020. The inventory of residential properties available for sale at the end of July was 4,056, a nearly 30% increase from June.” The lag indicates that the Denver housing boom is cooling down along with the incoming Fall weather.
We are sure to see interest rates that have remained at an all-time low this year go up to some degree. Due to the effects of a global pandemic, loans have been easier to get at a lower rate, giving people the opportunity to pay less over an extended period. Hopefully, when these rates go up, they will still be in the low range of 3%, which is by no means a cause for concern.
The season might be the reason.
CPR News reveals that a “record-low 3,582 homes were listed last month in metro Denver, marking a 35 percent decline from the same time in 2020”. However, they also report the caveat that “It’s too early to tell whether the recent slowdown is due to seasonal patterns or the housing market beginning to correct itself after a boom that drove double-digit price gains across much of the state and the country.” Seasonal patterns are essential to keep in mind because this is usually when we see sales start to slow as we approach cold months and the expenses that come with the holiday season.
The Denver Post helps put fears to rest about a potential crash in home prices by showing that a “typical year in metro Denver sees a 3.1% gain in active listings between June and July. But this year’s monthly increase of 29.9% is the largest ever recorded for July, according to the report. That said, July’s average was 16,302 active listings, so the supply remains at only a quarter of historic levels. Tight supply should hold at bay a dramatic drop in prices”.
What to do if you’re looking to buy
What does this mean if you are looking to buy a home during this time? While there is never a perfect time to buy or sell, this may be your moment. The Fall and Winter months can pose challenges for those preparing for a busy holiday season, those with kids who are back in school, and those who face logistical issues like inclement weather that makes moving more difficult.
Regardless, the trends in the market indicating that prices may potentially go down during the following months means that it may be the best time for you to make your move. Many people face no choice but to buy or sell in the Fall and Winter months due to work or family relocations. There are some perks to doing so in the latter part of the year, even if it isn’t the busiest time for sales.
The perks of being a buyer
As a buyer, you still have time to capitalize on the low-interest rates. And, even if we see interest rates go from the 2% range to a 3% increase, rates are still considered low and worth your investment. The overall demand for homes in the Colorado market remains high, and there is still a chance you might get into a bidding war with another buyer.
Regardless of how low or high we see selling prices fluctuate over the coming months, you have the golden opportunity to pay less month to month on your mortgage with flexible and customizable loan terms. There’s also less competition in the Fall. So, you have the bonus of not having to be as concerned about snagging a property the moment it gets put up for sale. We have seen Colorado homes close within 3-4 days of listing, but we now see that stretching to 11 days and likely to increase in the coming months.
Right now the seller is still King
If you are a seller, don’t be disheartened! Even though the seller has been reaping the highest benefits in the past year, the recent cooling down does not spell disaster. Keep in mind that you should be prepared for a slower sale, but with demand for homes still high, you should still be able to get top dollar in the Denver and Colorado markets.
Sellers may not get multiple bids thrown at them within a few days, so try to be patient. The fact that low-interest rates are still available and demand for homes remains high, you will still find an eager buyer. You may or may not need to adjust your selling price, but trusting a great agent to advise you of the current trends will help you make an informed decision as you attempt to sell.
Do your homework
One last recommendation for buyers and sellers alike is to remember that the real estate market is constantly in flux and can be hard to predict. Therefore, please take advantage of professionals and agents to advise you on your concerns and provide you with the knowledge you need to decide whether it is the right time to consider buying or selling. You know what’s best for you, and you should remember that once you have the information you need, you can make the decision that is best for you and your life.
Doing your research, consulting professionals, and creating a plan for what you feel will be right for you has never been easier. With resources in abundance, you can become knowledgeable and empowered. Even better, you will be able to feel in control of your future. You will be able to ignore anyone pushing you to decide before you know whether it is right for you. Education is power. Power will ensure you make the best choices for yourself.