Why Now is the Best Time to Buy a Home in Denver in 3 Years – Part 1

From 2019 through the Spring of 2022, we saw a historical real estate market take place here in the Denver area.  If you were looking to buy a home in Denver, you had to give up everything just to get in that home.  You had to pay more, you had to waive things like inspections and appraisals and basically had no say in the negotiations.  When I say that, I mean that sellers had a huge upper hand and could practically ask for anything they wanted and because they had 20 other offers waiting the buyer would say yes or not get the home.  It was crazy and never seen before and honestly hopefully never seen again.

So, for those of you that don’t follow the market closely, you need to know something.  The market has CHANGED, and it changed fast. It changed a lot and right now for this current month or small period in time it has changed SO MUCH. Personally I am seeing that buyers now have the upper hand!!

Here is Why Now is The Best Time to Buy in 3 Years

Now this is all relevant, if you can’t afford to buy right now then it is not a good time for you.  If you are not planning in staying in the home long term, then it may not be a good time for you.  However, if you are holding onto the home for a while and you have the money or can get down payment assistance and afford your monthly payments. It is definitely the best time we have seen for buyers in 3 years or more! Let me tell you why.

Price and Negotiations

What you may not know is that home prices have stopped accelerating lightning fast.  December 2021 to December 2022 prices still increased 4% in the Denver Metro Area. When you realize that previously home prices were increasing 20% year over year 4% sounds much nicer.  When it comes to pricing, we are seeing plenty of price reductions. That is due to the market changing so quickly and sellers not being able to keep up with the changes.

Price Decreases are also due to those higher interest rates and buyers sitting on the sidelines.  Our average days on the market went from 4-5 in the spring of this year to 30+ right now.  Homes are sitting a lot longer, sellers freak out a lot quicker that their home won’t sell, and price reductions happen. 

What does this mean for you when you buy a home in Denver?

It means YOU CAN NEGOTIATE.  You can negotiate on that price that the home is currently listed. Buyers can possibly negotiate down if it has been sitting on the market for a while.  You can pay a lower price for that home and in some cases, you are paying a lower price right now than at the beginning of the year even with the craziness that was happening.

As a Buyer you can also negotiate on those inspection items. Yep, you can ask for repairs to be done before you move in.  You can have the seller execute and pay for those repairs, so it is all taken care of.  Now I don’t recommend you go in with a list of 60 asks but those things that are important to you or compromise the safety of the home. YOU CAN NEGOTIATE THOSE INSPECTION ITEMS!!

Less Competition

Due to interest rates (stay tuned for Part 2 on how we can help combat these!) a lot of buyers are sitting it out.  They are waiting until interest rates drop to buy a home in Denver.  I will be upfront and say, I don’t know when that will be, and they are likely to not go into the 2’s and 3’s like we say in that historical market.  Average rates over the past 10+ years have been in the 6’s and 7’s.  So, we are not sure when they will drop and by how much but if they do drop you can always refinance to a lower rate like many of us have done in the past.

There is also concern out there about the market crashing hard like it did in 2007-2008.  Most experts are not seeing those indicators, while the market may continue to stabilize, and we may see some areas have slight drops in value. Most experts are seeing that we will still appreciate just at a more normal pace of 3%-5% year over year. 

However, I get this concern.  I lost a house in the last crash.  I was not a realtor then, it was not a good investment (think the money pit) and we had no money, so we had a 80/20 loan and no right buying that home.  This is also why at the beginning of this post I mentioned who the people right now that this is a good market for. I talked about the length of time you plan to stay in the home.  If you are planning on this being your forever home or at least a longer-term hold (the market always bounces back and bounces back strong) then make your payment, ride any bumps out and your home will still be a good investment.

If you are financially stable and plan on living in your home for a while, then less competition is a good thing for you.  Less buyers to fight with, more homes to choose from and more room for ….. negotiations.

How Long Will This Last?

We don’t know how long this window will last, if interest rates do drop back into the 5’s and possibly high 4’s then buyers will rush back out causing the market to shift again.  If the Spring market picks up like it usually does here in Colorado, then more competition will come back into play possibly shifting it back into the sellers hands a little.  Although, we are not seeing it get as aggressive as it was in any way, shape or form. 

Check back for Part 2 where I will go over how with a little strategy, we can get over the interest rate hump and get you a lower payment, sometimes even having the seller pay for this upfront!!

Click here to get my free buyer’s guide to help you navigate the market!

If you are thinking it’s time to buy a home in Denver or Northern Denver let’s chat sooner rather than later, you can contact me at haley@youraussieagent.com!