Over the past seven years, Denver’s real estate market has favored sellers over buyers. Home prices have increased year-over-year. Inventory has been at records lows, pushing up prices and stress levels for home buyers. But recent data indicates that market conditions have become more favorable for Denver and Front Range range home buyers.
Home prices have fallen in the Denver metro area for the first time in seven years
A national slow down in home sales that began late in 2018 also impacted Denver. For the first time in seven years, home prices have stopped rising year-over-year. Average home prices for Denver in February 2019 were down 2.18 percent from 2018. Inventory is up 36 percent compared to last February. The drop in home prices has a direct connection to the increase in inventory. The increase in inventory removes some advantage sellers had in setting prices.
With so many buyers competing for a small pool of homes, it was common to see bids go far above the asking price. With a larger pool of available homes, some of the pressure is removed from the bidding process.
Don’t bet on this trend to continue for the long-term
A rise in loan rates through most of 2018 and uncertainty about the economy were two strong elements that contributed to the current softening of the real estate market nationally and in the Denver metro area. Winter is also a seasonal factor. Homes sales typically fall during the winter. But with spring only days away and with the increase of available homes, the drop in home values, as well as the recent decline in interest rates, home buyers who decided to wait things out will be entering the market.
Spring and Summer are the busiest time of the year for home sales
Spring is only weeks away, and that also means that home sellers and buyers are entering the market. Many sellers and buyers view March through July as the optimal time to sell or purchase a home. The number of listings during this period will rise. So will the number of interested home buyers. An increase in competition for available homes gives sellers an advantage. Buyers looking for an edge should start preparing now.
The slight drop in Denver’s home sales and prices is relative: the median home price in Denver as of February 2019 was $430,000. The national median home price in the fourth quarter of 2018 was $257,600. The price and demand for homes in Denver are still far higher in comparison to most of the United States markets.
For those looking to buy a home in Denver this spring, the best course of action is to contact their real estate agent, start looking at all listings of interest and to get pre-qualified with a mortgage lender.
Take advantage of low interest rates
The rise in interest rates seen in 2018 is a factor that likely contributed to the home-buying slow-down at the end of the year, but the current mortgage rates are significantly lower than they were 6 months ago.
The rates for 30-year fixed-rate home loans are averaging at 4.3% nationally for mid-March 2019. Polygon Financial Group has offered 30-year fixed-rate home loans during the same period for as low as 4.15%. If you are shopping for lenders, make sure you are getting the best deal on rates, closing fees, and incentives. Securing a loan through a lender with a lower rate can save you tens of thousands of dollars over the life of your loan.
Don’t miss this opportunity to purchase a home in the Denver metro area in 2019
With the rise in inventory and decrease in home prices, there might not be a better opportunity to purchase a home in Denver or the Front Range. Start looking for homes now and get a headstart over home buyers entering the market in mid-April and May.