Yes, the market is speaking to us and the Carla Knight Homes family can hear the whispers. This will be the second post overviewing a changing dynamic in the housing market. It was needed the first time due to changing interest rates and how that would affect the Denver housing market or even the Golden/Applewood/Lakewood cities individually. Call this Carla’s forecasting or predictions for 2023 for housing.
Are we still waiting for the market crash? Although homes have decreased in value in the Colorado housing market during the previous 6 months, the stabilizing of values has reached a slowdown. Going back 180 days from when the increase in interest rates started, in May of 2022 our percent of closed pricing to listing pricing hovered at 104.7%. The Median closed price for a home in May of 2022 increased 14.7% year over year to $591000. Meaning an average buyer would need 4.7% additional cash to have an offer considered in the competition of buyers.
Fast forward to a look at the same numbers for October 2022. The percent of the closed price is $98.6% with the Median closed price of $550000 up 5.8% from 2021. Looking at the September list to close price is 98.7% with a median closed price of $600000.
Where is the housing crash? It happened. In the previous 180 days, the market adjusted in the seven counties that make up the metro Denver housing market. We are watching houses priced and sold within 17 days on market at 98.7% of the list price. Will prices drop lower? From September 2022 to October 2022 the median closed prices have decreased but we are still closing at 98-99% of the listing price. Although it feels like a buyer's market we are still short on inventory with more home buyers than homes. Then where are the buyers??
We typically see a slowdown this time of year. If you speak to Carla about when to sell, if you have the scheduling option, Carla will advise fall would be best. Less homes are listed on the market with more qualified buyers that are going to move not just looking at options. This year we had another layer slowing down housing, an election. People know voting matters. Some feel it can change the playing field. The housing market has deep roots in national and state economies. It adds to a fall slowdown in voting years. The third is the interest rates.
I have had a unique life span where I have witnessed the highest interest rates in the 1980s 17%, 18% even 19%, and the lowest interest rates ever observed in the Golden or overall housing market. I purchased my first home in 1988 and danced in the streets closing at 12% interest. Within 14 months I refinanced to 10% and so on until my interest rate hovered around 4% in the early 2000s and still have a 4% interest rate now. We like to quote whoever started this saying…” you marry the house, you date the interest rate”. Rates will always change. If you close with a set interest rate, at a monthly payment that is comfortable with your family’s budget, you will never see an increase in your “rent” again. Refinance when the rates are 2% lower and save the additional funds you will find in your budget for a fantastic vacation.
Overall, right now is a great time to buy. Prices are lower than 6 months ago, there is less competition due to the three factors in the slow down and you have the ability to consider which home is best for your situation. It feels like a luxury to have seventeen days to think about the homes you are viewing and make the best offer for your situation. In the new build sector of the housing market, you might find a home ready to move into without the normal nine to twelve-month building time with plenty of builders’ perks stacked on. Enjoy starting out 2023 in your new home.
As we move into the new year, past the January Christmas Hangover, no not alcohol, credit card spending into the early selling season, or Valentine's Day some call it. The revving up will sound like Bandimire Speedway on race day. By mid-2023 we will see some of the overall factors in the economy, like inflation, and supply chain issues subsiding with a more normal feeling moving forward. The largest question is “Will we ever see 3% again? It can happen, it might happen, why wait to find out? Build your wealth by buying now and refinancing later…
Every home with families in Lakewood, Golden, Applewood, and Metro Denver area has there own unique situation. To hear your options if you are buying or selling homes reach out to Carla Knight Homes.
The data enclosed is a representation whole or in part of MetroList Inc., Metrolist does not guarantee or is not responsible for accuracy. Metrolist may not reflect all real estate activity in the market. Data is reported to show trends.
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