Denver’s real estate market has changed over the last twelve months. From a feeding frenzy of buyers in a small pool of homes for sale, to a big step towards a more balanced market. The shift in the market brought concerns of a market crash. But coming from such an extreme seller’s market, there was a long way to go to simply find balance. Even with the changes we have seen in the last year, we remain in a seller’s market.
The Agents Agree
Local Denver real estate agents tend to agree with what they are experiencing in the current market. Sellers are active and agents are busy. Homes are selling, albeit a little slower than a year ago, and buyers are purchasing at a similar pace to last year. The selling frenzy is mostly gone, although in the right neighborhood and price range, some properties will get a lot of activity.
There is a consensus that pricing is a critical factor in today’s market. Over the last five years sellers could push the envelope with higher and higher price tags, knowing buyers had little leverage in negotiating. Today, with the influx of additional inventory, buyers have choices and an overpriced property is easily passed by for the next option.
A Great Place to Be
We are arguably in the sweet spot of home sales in the Denver area. Sellers continue to see small, but consistent increases in value, while still selling their properties relatively quickly. This isn’t to say that the number of expired listings hasn’t increased. Due in part with sellers not adjusting to the shift and aiming too high on price, some homes do go unsold. Yet overall, even with the mild monthly fluctuations in home sales, the market is good.
Interest Rates and China
There are other factors at play on a national level that are driving our market. Low unemployment and inflation as part of a strong economy are keeping things moving. The Federal Reserve cut the Federal Funds Rate (FFR) by a quarter of a percent a week ago, but don’t expect to see the change mirrored in local mortgage rates. The FFR affects short term rates, like car loans, whereas mortgage rates are dictated by inflation and expectations of where inflation is heading. Inflation is low and so are rates.
You can also thank manufacturers in China for the preferred low rates. The proposed tariffs on Chinese goods last week creates uncertainty in the market, which also drives mortgage interest rates. As uncertainty goes up, rates come down, helping to deliver the lowest rates in three years.
As we pass the mid-point of the year and get ready to send the kids back to school, the local Denver real estate market is doing well. It is a good time for buyers to shop for their next home. Inventory is up and competition has subsided. For the seller, it’s a great time to sell. Home values remain at all-time highs and interest rates are allowing buyers to get more home for their dollar. The market shift will assuredly continue, but the remainder of 2019 looks to be a good year in Denver real estate.