Fall 2023- Real Estate Market Update

Fall 2023- Real Estate Market Update

  • Allison Benham
  • 10/9/23

It's that time of year again- time for a market update! Let's jump right in with a recap of the year so far as the 3rd quarter is now behind us.

7.7% interest rates, sustained demand, flat year for home appreciation.

As you likely already know, mortgage rates have reached new highs of 7.7% this week. Inflation has proved tricky to tame this year, and the Fed has had to push interest rates higher than many expected in an attempt to cool things down.

In spite of pricier monthly payments, over the summer, as rates got up into the 7's, buyer demand remained resilient. This is in part due to constrained inventory levels.

Inventory continues to stay low, as some sellers, who would otherwise be moving up or down into new homes, feel stuck with their current low-interest rate mortgages.

Good homes have been snatched up rather quickly as motivated buyers have continued to act fast and write aggressive offers. Even with high-interest rates, there is still a group of folks that have to move- whether it be due to a job change, marriage, divorce, or needing to downsize/upsize. And there are some cash buyers who are not impacted by the interest rates. These groups of people have had fewer homes to choose from than in years past. Because of this continued demand and the low inventory environment, most of our recent listings have had multiple offers, and many of them have sold for over list price. Around 30 percent of homes have continued to have multiple offers submitted.

The Stats

Median sales price in Boulder County has mellowed year-over-year as we come down off the pandemic/post Marshall Fire highs.

Boulder County- Median Sales Price Year-Over-Year

Denver Metro- Median Sales Price Year-Over-Year

Median sales price in the Denver metro and western suburbs has ticked up a bit year-over-year as buyers deal with low inventory.

Days on Market has remained rather low.

Boulder County- Days on Market

Median days on market is being skewed upwards in Lafayette and Longmont due to new build activity (new builds stay on the market for much longer than re-sale properties.)

Denver Metro- Days on Market

In all areas, months supply of homes has gone up some but remains in Seller's Market territory.

Boulder County- Months of Supply

Denver Metro- Months of Supply

Succeeding in Today's Market

Consumers should know that if you are on the buyer side, being quick and prepared in seeing homes and writing offers is still a must. While it seems the market has slowed some, some buyers are still acting decisively and are making competitive offers on the first weekend.

And at the same time, in some cases, buyers have been able to ask for concessions from sellers to a degree we haven't seen in recent years. We have had buyers able to negotiate interest rate buy-downs and lower purchase prices as well. There is no "one size fits all" in our market at the moment. It's best to approach each home and seller without assumptions as to how the negotiation may go.

For sellers, pricing well and preparing the home for sale is of great importance. Making sure the home is staged, cleaned, and showing-ready is tantamount. Buyers will probably want to negotiate hard on inspection items so it's best to budget for some concessions. And from there, patience is key. It may take a couple weekends to get the right buyer through the door.

A Final Word

Whether mortgage rates have reached a high point or not is yet to be seen, but it does seem like the Fed's actions are starting to have their intended impact. However, just this morning the jobs report was considerably stronger than expected, which may lead to yet more interest rate hikes. If interest rates stay higher as they are now, they will likely serve to drag the market down some over the winter. We may see price decreases of 3% to 5% before the spring buying season of next year picks up. Buyer demand should largely be sustained by the fact that we are still multiple years under built. Should we see some relief in interest rates before next spring, demand should be there and we may see home appreciation marching forward at a steady pace again.

If you have questions about the market, don't hesitate to reach out. We'd love to hear from you!

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