According to the Denver Metro Association of REALTORS®, Denver’s home values peaked in April of 2022. Since that peak, we’re seeing values are down 10.67%. Values are trending in the downward direction, and it unknown when that trend will turn around. Because of this, it’s important that buyers take time before buying a home to ensure they are a purchasing a home that they will be able to live with for a minimum of 5 years but more preferably 10. If you’re buying with the intention of staying in the home for 5-10 years, historically this should be enough time for you to make up any lost value during the down market and see enough appreciation to receive a positive return.

Now that the market is softer, homes are not selling nearly as quickly as they once did. This means inventory levels are on the rise. Higher inventory levels mean buyers now have more options to choose from. This is great, considering that above we talked about making sure you’re buying a home that you can live in for 5-10 years. Also, if homes are taking longer to sell, it means buyers now have the time to think through their offer. If a buyer doesn’t get an offer submitted after only seeing the home for 15 minutes, it will likely still be available to either see again or get an offer submitted at a later date. This once again helps ensure buyers are making a purchase they can live with for that 5–10-year time period. More options also mean you can afford to be pickier. If you don’t like the direction the home faces, don’t care for the amount of work the house needs, or don’t like the lack of landscaping, no problem, let it go and go on to see the next home. Options are good for buyers; it allows them to have the time needed to make a good purchasing decision and allows them to be pickier with that purchase.

If you have thought about buying a home recently, then you know that interest rates are up. This is actually one of the biggest factors causing the current market conditions. However, what you might not know is that rates are actually down a bit in many cases from their summer 2022 peak. In the summer and early fall of 2022, rates had nearly hit the 8% mark. This is more than double what buyers earlier in the year and in the past couple of years have been experiencing. Now many buyers can lock in lower rates, even rates in the 5’s. Before the extremely low rates due to COVID, an interest rate in the 5’s would have been considered historically low. The fact is interest rates may or may not come down much more for the foreseeable future; buyers will have to get used to these new rates as we believe these will be the new norm for mortgage rates.

The final fact that Denver area buyers need to know before jumping into the market is that many sellers are in denial about current market conditions. They are often listing their homes at last summer’s value and unwilling to negotiate on price. This makes it hard for a buyer as they know a home they love might not be worth what the seller is asking, but the seller isn’t willing to budge on price or terms. It is important in these cases to remember that you have options, and values are, in fact, down. If a seller isn’t willing to negotiate right now, keep looking, and after some time, circle back to these sellers and see if they are more serious about selling. With the softer market, it is more important now than ever to make sure you’re paying a good price for a home; there’s no need to overpay and be upside down at the closing table.

Buying a home in Denver has been a challenge for many buyers the past several years. Today’s new market conditions give buyers much needed time and options to make a smart purchase. However, that does not mean buying a Denver area home is now easy. With today’s softer market, it is important that you work with real estate professionals that understand the market and how current conditions affect each individual home and its value.

At TK Homes, we take market research seriously and have real experience to help you make a smart purchase that will be both a great home and a long-term investment. Contact a TK Homes agent today and experience the real difference firsthand. The time to make your real estate goals a reality is now.

~ Written by CEO/REALTOR® Trevor Kohlhepp