There’s no doubt about it - the market is shifting. The direction it’s turning will come as a surprise to some, but will also offer new opportunities. As your trusted brokerage, we believe it’s important to not only be aware, but also to understand these changing conditions so that you can make smart, informed decisions that make sense for you.
Over the course of the pandemic, housing inventory in Colorado fell drastically, which along with record low interest rates created an absolute feeding frenzy of buyer demand for homes. Imagine a lake with thousands of very hungry fish (buyers), but only a small number of fishermen (sellers) baiting their hooks and dropping their lines in the water. That’s been our market the past couple of years - a feeding frenzy!
But now we’re starting to see things shift back to a more ‘normal’ state, as mortgage rates have jumped up rapidly this year. However, that doesn't mean you can't still sell over asking when the home is priced right and merchandise correctly. It's just that now the lake has fewer fish, and an increasing number of fishermen…
This shift has come as somewhat of a shock to agents and clients alike because we’ve gotten used to the fast paced, low mortgage rate market. However, let’s not forget where we were just a few years ago. In 2018, the median days to sell was 9 across the Denver Metro, and interest rates reached almost 5% . Now, 5 days is the median in many areas, and as of July 1st, 30-year fixed rates were at 5.5%. We’re not far off from what we saw only a few years ago.
So what does this mean for buyers? The good news is there’s less competition, meaning fewer bidding wars, less contingency-waiving, and potentially a lower list/close price. One way to greatly increase your chances of success is by using 8z Cash Buyer when submitting offers. When you come to the table with cash, you can get ahead of the competition and stand out to the seller. Another sign of relief - inventory is also on the rise: active listings across the Denver Metro jumped 28.9% from May to June, and Months Supply of Inventory jumped 40%. This means a lot more homes to choose from compared to a few months ago.
The sharp increase in rates this year has scared a lot of would-be buyers out of the market, but remember: marry the house, date the rate. While you may buy now at 5-6%, perhaps you will be able to refinance down the road at 4%, saving yourself thousands over the life of the loan.
For sellers, there is still opportunity to receive multiple offers over asking. But now more than ever, it’s crucial to ensure your home has excellent merchandising. Improving curb appeal, staging, 3D tours, videos, high-quality professional photography, and digital ad campaigns can help listings stand out and attract more attention. 8z Listing Concierge is the perfect solution: we handle all needed repairs and improvements with our trusted vendors, then you simply pay through your net proceeds at closing!
Additionally, the importance of a skilled pricing strategy cannot be overstated. While during the feeding frenzy it seemed almost any listing would get offers right away, now sellers are finding that if they don’t hit the market with the right price, their home may attract little interest. With this in mind, nothing beats hyper local expertise and understanding the latest trends in your neighborhood.
The market is changing, but there’s still plenty of opportunity out there to make the best move for you and your family. Reach out to your 8z agent if you have any questions, or if you’d like to chat about your next move!