Denver was one of a handful of cities across the country where at least 40% of homes listed for sale experienced price reductions in May, according to REALTOR Magazine. It's no secret that the Denver market has been bananas for the past 24 months. Yet as we creep later into the summer months, the market is seeing an ever-so-slight slowdown as potential Buyers enjoy travel and vacations and take a deep breath to evaluate what interest rates are going to do.
Despite the price drops, Denver continues to rank high among other cities in terms of overall price appreciation. According to the May 2022 CoreLogic U.S. Home Price Insights report, home prices in Denver grew by 21.7% over the last 12 months, ranking it fifth among the top-10 metro areas.
For comparison, Phoenix, Ariz. led the way with a nearly 30% annual price appreciation compared to the national average of 20.9%.
“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” said Patrick Dodd, CEO of CoreLogic.
One reason why many metros are seeing home price reductions is that mortgage rates continue to squeeze homebuyer budgets. According to data from the National Association of Realtors (NAR), the average interest rate on a 30-year fixed mortgage is 5.78% compared to the 2.93% rate recorded a year ago.
The higher interest rates have also helped increase the average monthly home payments for many homebuyers. For example, the average monthly payment for a $300,000 mortgage is now over $1,800 per month now compared to around $1,265 last year, according to Lawrence Yun, NAR’s chief economist.
Though the rise in home prices may be slowing, people looking to buy a home in Denver are still finding far higher prices than they did a year ago: The median closing price for a residential home in metro Denver was up more than 14 percent from a year ago. And the homes that are on the market are still selling quickly: The average number of days a home sits on the market before going under contract in metro Denver was nine.
It's true: interest rates took a real hike this year. 2022 started with rates in the low 3%'s. By April rates climbed into the high 4%. And now rates the average interest rate on a 30-year fixed mortgage is 5.78%. The rate hike was well anticipated and it created an absolute frenzy in Q1 and the start of Q2 as Buyers looked to lock in a rate before the rise. With rates now into the 5%'s, many Buyers are taking a breath - and a back seat to becoming a homeowner. Here's why you shouldn't let current rates deter you from Buying now:
Bottom line: there are some amazing lenders in the industry that have excellent products and options to qualify you for a home regardless of the interest rate. Email me for a referral to my best lenders who will help you understand your options and how to make a purchase work in your favor.
Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.
If you’re looking for a good combination of the above factors—affordable pricing, solid inventory levels, and lower competition—data from the National Association of Realtors pins early fall as the best time to buy. The first week of October is the best single week to buy a house, offering 18% less competition than other weeks of the year, according to the research. The third week of September is also a smart time to buy in some metro areas, according to the analysis.4
If you want a specific day, ATTOM Data Solutions shows December 26—the day after Christmas—as the absolute best day to buy. Buyers save about $2,500 by purchasing a home on this day. Other days on the list include December 1, 4, 7, 21, and 29.
Holiday weekends are also ideal items to shop, as is the month of August (Buyers are busy with back to school and back to work activities). Mondays are a great time to peruse the MLS as any new listings that made it through the weekend will be available Monday. You may have a chance to get an offer accepted and avoid competing against other Buyers.
RECIPE OF THE MONTH:FALAFEL BOWL
These falafel are delicious and SO easy to make! Pair with quinoa, a garden salad, feta cheese, naan, or any of your favorite Mediterranean inspired accoutrements to make salads, bowls, or wraps. Easy preparation and delicious results. INGREDIENTS:
FiveFour Real Estate is the one-stop shop for those who are ready to take their home or investment to the next level. Our name FiveFour derives from 5.4%: the average annual home appreciation rate in the US over the last 50 years. We know that your real estate investment is one of the largest and most important purchases of your life. With that in mind, our focus and strategy revolves around you. We hold our licenses at the brokerage Five Four Real Estate. If you buy a home and put 20% down, you are leveraging your money 5X. A 5.4% increase in your home's value means a 27% ROI.
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This could be one of the largest and most important financial decisions you will make in your lifetime, and you deserve an experienced partner that understands the intricacies of Colorado real estate.
We promise to always keep you informed about the rapidly changing market and educate you throughout the entire process. We promise to protect your best interests and treat your home or investment like it’s one of our own. We promise to work our hardest to find the perfect home for you and your family with as little stress as possible.
We value your trust and hope to continue supporting you in your lifetime even after your sale or purchase is complete. This goes beyond real estate to us, it’s the beginning of a lifelong friendship.