In a matter of weeks, we’ve gone from speculation to realization: mortgage rates are now above 4% for a 30-year fixed-rate, the highest in two years. In a recent article from Realtor®, Freddie Mac Chief Economist Sam Khater said, “As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets.” How does this scenario play out here in Colorado, and how can buyers ensure they win in this market?
On top of rising inflation and mortgage rates, Colorado is also facing an inventory shortage coupled with high buyer demand. After you factor in a 4% mortgage rate and increased living costs due to inflation, we’re also seeing homes sell way above asking price. If you go back just two years, you may have been able to buy a $400,000 home in Denver for $400,000. In this current market, that home could sell for as much as $500,000 - with very favorable terms for the seller. These increased rates have also motivated many ‘fence-sitters’ to finally purchase a home, which could make our supply/demand imbalance even greater.
Thankfully, it looks like more inventory is coming into the market. Traditionally, we see a 70% increase in new listings from December to January. In most areas along the Front Range, you can see significant increases in new listings over December 2021 numbers:
New Listings (Single Family Homes)
- Denver County: up 87% from Dec 2021
- Boulder County: up 82% from Dec 2021
- Colorado Springs: up 18.6% from Dec 2021
- Fort Collins: up 42% from Dec 2021
There’s no doubt, it’s a challenging time for buyers, but 8z’s modern solutions are still helping them win in this competitive market. When facing multiple other offers, it’s crucial to stand out in the eyes of the seller. With 8z Cash Buyer, you can come to the table with an all-cash offer, which is usually the most attractive option for sellers. On top of that, clients who use Cash Buyer often end up paying less for their house, so it’s a win-win. Call me today to learn more about this innovative program!
