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With the beginning of April, we are officially in the second quarter of 2024, and it’s spring in Colorado. Does this mean that Denver is experiencing the highly anticipated “Spring Market” with increased buyers, homes selling quicker and home values on the rise? The answer to this question, in my opinion, isn’t just a yes or no, but right in the middle. So, what do I mean by this?

Home showings in general do appear to be up in many cases; in fact, a home we have for sale in the Westminster Federal Heights area saw near double digit showings in a single day last week. We are also seeing a lots of foot traffic at open houses across the Denver metro area. Views on our homes for sale in the Denver MLS are nearly double their average number of views compared to earlier this year or towards the end of last year. We’ve even seen some homes sell recently with multiple offers and for significantly over list price.  These facts are all signs of a Spring Market; however, this isn’t where the story ends.

Even with these increased showings, online views, and tons of foot traffic at open houses, many homes are still sitting on the market. What this tells us is there’s potentially an increased number of buyers, but that many of these buyers are being very picky when deciding to make an offer. If they aren’t seeing the value at a home’s list price, they are simply moving on to another home available, waiting for something else to come on the market, or waiting for something else. I personally feel they are waiting for something else, but what? The answer is simple: interest rates.

 

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Many industry experts entered the year proclaiming that 2024 was going to be the year of lower interest rates. Since it was increased interest rates that really brought Denver’s market down from all-time highs in 2022, many believed that lower interest rates could cause quick and high appreciation across Denver in 2024. This could be prompting buyers to jump in the market in anticipation of lower interest rates or to try and snatch up a home at today’s value before all that appreciation caused by lower interest rates. However, so far this year the Feds have not yet made a cut in the interest rates, and inflation data continues to be stronger than desired. This has caused the mortgage rate to remain high. In my opinion, many buyers are not seeing interest rates head in the right direction, causing them to hold off on making an offer to see if the rates do, in fact, come down or to see if that perfect home comes on the market. Either way, there’s not much motivation to settle for a home they feel might be valued higher than they are willing to pay; consequently, there are many home showings and views without buyers taking action. So, how do we explain homes recently getting multiple offers and selling over list? This answer is possibly the only simple one we’ve addressed with this month’s market update. The homes we’re aware of that have sold over list are unique and offer something most don’t, like incredible mountain/city views or desirable high-end finishes. With increased buyers in the market, these rare and unique homes are enough to make buyers who are on the fence jump off and pay up, but most homes are not meeting these requirements and therefore are just getting attention in the form of showings or views.

With rates showing no signs of coming down so far in 2024, Colorado is not yet seeing that feeding frenzy often seen during the Spring Market. However, no one can deny there is an increased buyer presence, and this could mean we’re just gearing up for a different market soon. It could be a slight decrease in interest rates that pushes these buyers off the fence and causes homes in the Denver metro area to start seeing higher appreciation with multiple offer scenarios. However, if interest rates continue to be stubborn and remain high, you might see buyers get tired of the waiting game and retreat to the sidelines to see what the future brings.

Only time will tell what the buyers across Denver do, but one thing for certain is that TK Homes will be here regardless of what happens in the Denver real estate market. We will continue to help sellers and buyers reach their real estate goals. Don’t forget to check in the first Thursday of each month for our most recent Denver Market Update blog.

 



~ Written by CEO/REALTOR® Trevor Kohlhepp

 

 

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