Frequently asked questions
Today, we’re answering the top five questions about our local real estate market.
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What is happening in our local real estate market? We’ll answer some of the top questions we’ve been hearing from clients today:
1. Is this a buyer’s or seller’s market? Denver is definitely in a seller’s market. However, that varies a bit based on the time of year. In winter, things tend to be a little bit slower and the market is a bit more balanced than it is in the summertime. Things will start picking up around March and May. Market analysts predict another year of double-digit growth in Colorado.
2. What does the current housing inventory look like in our area? Inventory is definitely a little low right now, especially compared to spring or summer. There are fewer buyers on the market this time of year as well, so that balances things out a bit. Despite there being fewer options, buyers are still able to find homes in a couple of days. It’s slightly easier to buy a home right now because you won’t get dragged into any bidding wars. Sellers are even willing to give a little on the asking price. We were able to get clients $5,000 off the asking price; in fact, we also got one client a new roof!
3. How does the current inventory affect the values of homes in our area? Pricing remains stable. However, as we mentioned, some sellers are more willing to bend on the asking price. Although prices aren’t dropping, sellers are more likely to entertain a low offer now than they are in the spring or summer, when sellers want full asking price or more. Of course, when you get more than the asking price, there can be issues with appraisals, which means buyers will need additional cash.
4. What do interest rates look like right now? Interest rates have increased substantially since the election. Before the election they were at 3.875%, and now they are at 4.25%.
5. How does the increase in rates affect buyers? Let’s say before the election, you qualified for a $500,000 home at a 3.875% interest rate. With the current 4.25% interest rates, you will only be able to qualify for $478,000. So, there has been a reduction in buying power. For every third of a point increase, buyers lose $20,000 of buying power. The Fed has announced that there may be three more increases to the short-term rate over the next year, which will likely affect the mortgage rates that we use.
Ultimately, if you are thinking of buying a home, now is a great time to be on the market. Buying a home now will be much easier than it will be a few months from now.
If you have any other questions about our market, give us a call or send us an email. We would be happy to help you!
