Should You Wait For Spring?

Should You Wait For Spring?

With the first month of 2024 behind us, we’re seeing some typical seasonal trends play out as well as some encouraging data for housing inventory. Many areas along the Front Range and Mountain communities saw a significant jump in new listings compared to January 2023. For instance, the Denver Metro had an increase of over 20% year-over-year, Boulder over 42%, Northern Colorado over 18%, and Eagle County over 32%. The new year usually brings a sharp increase in new listings with that trend continuing into the summer, so we’re off to a great start for 2024 with some much-needed inventory being added to our tight market. With the busy spring season right around the corner, any additional inventory will help soften the impact of heightened demand from buyers.


But of course, interest rates will likely play a larger role in the overall spring demand. While many buyers and sellers have come to terms with rates hovering around 7%, there are still plenty who are waiting for more favorable terms. Hopes were high in December as we saw an abrupt decline to just under 6.5%, but we’ve already retraced to 6.85% on a 30-year fixed mortgage. Declining rates seem to be the expectation among industry experts, but nobody can say for sure when they will decline, or how low they will go. And if you’re looking to buy or sell, it’s probably best to focus on what you can control.


Again, the spring market is quickly approaching, and some areas are already experiencing the fast-paced activity that usually starts in March or April. The change in seasons will bring a higher level of demand which means more competition, and fewer concessions from sellers. So if you’ve been on the fence about buying, you may want to consider making a move before things really heat up. Let’s analyze the potential impact of waiting to buy in the spring versus today. [Read More]


The average single family home in Colorado is worth around $630,000. If you bought that home today with a 5% down payment and a 6.875% 30-year fixed mortgage, your monthly payment would shake out to about $5,100/month. But before we look at the potential cost of waiting, keep in mind that right now more sellers are willing to negotiate with buyers as homes are sitting on the market longer. You might be able to negotiate a lower purchase price, or seller concessions to buy your rate down, which can make a huge difference over the life of your loan. 


Now let’s look at the same purchase if you buy this same home in April, but keep in mind that this is purely a hypothetical example to demonstrate how this scenario could play out. With a lot more competition from buyers, that $630,000 home is now listed at $670,000. You still go in with 5% down, and the same mortgage rate of 6.875%. At this point, you’d be looking at a monthly payment closer to $5,500 - about $400/month more than you would pay if you bought right now. However, now that we’re in the middle of the spring market, the seller isn’t willing to negotiate for a lower price, or offer any concessions. And depending on how many buyers are competing for the same home, you may even be up against cash offers at full asking price, contingent offers above asking price, or maybe even offers that waive important contingencies like inspection or appraisal. The more competition you face, the more of an increase you could ultimately see in that monthly payment. Again, this is a purely hypothetical example, but it’s not out of the question that we could see these scenarios become a reality in the spring.


If you’re on the selling side of the equation, waiting for spring could obviously yield a very positive outcome if we see scenarios like our example above. If you haven’t already, now is the time to start prepping your home to grab maximum attention from buyers when you decide to go to market. Enhance your curb appeal, touch up paint on the exterior and interior of your home, address any minor repairs, and line up professional photography. Let’s not forget that the spring market also brings more competition among sellers, so it’s critical that you stand out to yield the highest return.


As always, external market factors alone shouldn’t guide your decision to make a move. You should buy or sell when the time is right for you, based on your financial situation as well as personal needs.

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