An early spring isn’t just limited to the anticipation of warmer weather — as we’ve been predicting, a busy real estate season is beginning to bloom! Buyers have started to turn up to the market in droves, thanks to mortgage rates that have dropped a full percentage point since October. Due to this decline in rates, homebuyers with a $3,000 monthly budget have gained nearly $40,000 in purchasing power. That paired with a welcome increase in inventory is providing them more choices than they’ve had in a long time.
New listings increased almost 15% year-over-year to 3,280 and pending home sales increased 6.5% to 3,294. Although buyer activity has increased, many buyers still seem to be choosier than they have in years past. Prices are still at all-time highs and buyers want more bang for their buck, desiring move-in ready homes to help alleviate the sticker shock of current home prices. Median days in MLS has increased by almost 6% to 36 days. Closed sales have declined by about 6.25%, although that shouldn’t be surprising as these homes likely went under contract in December which is our traditionally lowest inventory month of the year.
The Fed did not adjust interest rates this past month and likely won’t make an adjustment for a few more months. Many buyers are sitting on the fence in anticipation of the coming rate drops, which is increasing pent-up demand. When rates do start declining, we may see inventory tighten up, creating competitive scenarios once again. Our local real estate market feels like it continues to hover near balance, with delicate ebbs and flows of buyers or sellers having more favor based on our current most influential driver – the pesky and ever-changing interest rate!
Buyers’ Budgets Bloom, Yet Hunger for Added Value!
With the onset of an early spring real estate season ahead, sellers have an opportunity to capitalize on current market dynamics. The significant drop in mortgage rates since October has fueled a surge in buyer interest, with buyers gaining substantial purchasing power as mentioned above. As these buyers are more discerning than those in years past, it’s still wise to put your best foot forward when listing your home.
Consider enhancing your property’s curb appeal, addressing any necessary repairs, and showcasing its unique features. Additionally, as the median days on the market have increased, strategic pricing and effective marketing can help maintain buyer interest and expedite the selling process. It’s crucial to stay informed about local market trends and consult with a knowledgeable real estate professional to make informed decisions that align with the current ebb and flow of buyer demands and market conditions.
As Borrowing Power Grows, Competition Flowers
With rates down, purchasing power is up and more rate drops are on the horizon. As borrowing power increases, buyers should be prepared for competition, especially for more desirable homes. We are already seeing new listings with multiple offers going under contract in a matter of days. If a home is priced correctly, is in good condition, and is in a desirable location, it’s unlikely that you’ll be its only suitor.
Keeping a close eye on the market is also essential, as these potential rate declines bring increased demand that will lead to a subsequent tightening of inventory. Collaborating with a knowledgeable real estate professional can provide valuable insights and guidance, helping buyers navigate the delicate dance of Denver real estate!
(Info Source: D.M.A.R. (The Denver Metro Association of Realtors, YCRE Analysis)
*We use reasonable efforts to include accurate and up-to-date information. The real estate market changes often. We make no guarantees of future real estate performance and assume no liability for any errors of omission in the content.
