The Front Range Is A Hot Market For Homebuyers And Sellers
Colorado’s Front Range offers gorgeous views, livable climates, and tons of things to do – which is why people from all over the country are moving to the state. In fact, 1 percent of homebuyers nationwide looked to move to Denver in the past year. That may not seem like a lot, but when you consider nearly 332 million people live in the United States, and nearly 65 percent are homeowners, it’s quite a few.
If you already own a home in Denver, or if you’re looking to move to the Mile High City, then there are a few things you need to understand about the real estate market so that you can be better prepared for what you encounter on the MLS and in your transaction.
New-Build Homes Don’t Have To Be Expensive
It’s a common misconception that all new build homes in Denver start at $600,000 and up, but this simply isn’t the case. Family homes with thoughtful floor plans and community amenities are easily accessible in the low $300,000 range.
If you must have a brand-new home, built just for you, then partnering with a home builder that takes pride in reducing waste and helping people get into affordable homes is a smarter move than becoming house-poor in a custom home.
Look to communities surrounding Denver, such as Aurora, to find a great deal on a new home. You’ll still have easy access to the light rail, downtown, and the airport, but you’ll be saving a whole lot of money.
Hot Home-Buying Tip: Partially prefabricated homes – not mobile homes – cost less than custom stick-built ones, but result in the same longevity and durability.
The Competition Is Stiff
The Denver housing market is starting to slow, but home sellers are getting strong offers on their houses, and buyers are still making compromises on their purchases, such as waiving requests for repairs after the inspection, or paying their own closing costs in full.
In November 2022, Denver home prices increased by 6.3 percent year over year, with a median sale price of $575,000. Denver homes sell, on average, after 23 days on the market, and 710 homes are sold in a single month, according to data from Redfin. Of course, the length of time on the market has increased since 2021, while the number of homes sold has decreased. However, the market is still deemed as “very competitive” in comparison to other areas of the country.
Smart buyers are swift to request tours and submit strong offers from the start, especially if they’ve fallen in love with a property. Smart sellers carefully vet each offer, looking at lender quality and examining the likelihood that the loan will close on time. Often, this means accepting offers from buyers with a larger earnest money deposit and a partnership with a reputable, local lender.
Hot Home-Buying Tip: Before you put in an offer, re-examine your finances and work on credit repair. Even if you have a technically good credit score, even just a few points higher can result in better mortgage terms or make you eligible for a conventional home loan.
Condos Take Longer To Sell, So You Could Get A Great Deal
First-time homebuyers or those looking to downsize, take note. You can save a bundle on your mortgage and get a great deal when you shop for condos. When you own a condo, you get the best of homeownership: your own property to decorate and remodel as you wish, without all the yard work and exterior upkeep that comes with the bungalows of the Highlands.
Because condos tend to be smaller and often come with HOA dues, there is less competition for them, particularly one-bedroom units. If a smaller home will suit your needs, and you love the idea of spending time on your hobbies instead of housework, then a condo could be perfect for you.
Hot Home-Buying Tip: To save even more money, don’t be afraid of purchasing a walk-up unit.
Despite High Mortgage Interest Rates, It’s Still A Good Time To Buy
With homes selling for just about asking price on average in Denver, it’s a great time to buy, despite high mortgage interest rates set by the Fed.
Why? Because with lower interest rates come higher purchase prices, so you end up paying more per month regardless. In fact, only 20 percent of homes in Denver sell for over the purchase price – and these are exclusive, special listings.
And although mortgage interest rates are high right now, that doesn’t mean they always will be. Interest rates regularly rise and fall, and you can always refinance your mortgage when rates are lower.
Hot Home-Buying Tip: Buy down your mortgage rate to save money on your monthly payments.
The Bottom Line
Although the Denver housing market is slowly cooling off after its massive explosion during the COVID-19 pandemic, competition is still quite fierce. Come in with a positive attitude, and put your best financial foot forward to come out ahead.