As most of us are aware, the current housing market in the U.S. has been pretty unsteady for the past many months. May it be buyers, sellers, or realtors, everyone has felt the ramifications of the erratic shifts in the market in some way or the other.
Our team was catching up on recent real estate statistics, and it’s unbelievable how homes were, and still are, being sold at such high prices all over the U.S. these days. Hundreds of sellers have recently reaped the benefits and sold their houses at astounding profits when the average cost of homes hit a record high in May. This might be great news for those working on selling your homes but not so great for those trying to buy one.
How Is Colorado’s Housing Market Faring?
The housing market in Colorado has been cooling down significantly over the past year and is now at a low point. Researchers tracking the home sale count in Colorado say that it looks like the number of sales has dropped faster in Colorado than the number of sales anywhere else in the U.S. during the last month. According to local data from the Colorado Association of Realtors, the sale of single-family homes in the Denver metro area fell by 6.3%. This is attributed to several factors, including;
- Changes in mortgage interest rates
- Decreased number of new homes being built
- Buyers wary of the market situation
- The U.S. Federal Reserve has steadily raised interest rates this year, which is likely to continue.
The factors mentioned above have led to :
- A decrease in the demand for homes
- Increase in inventory on the market.
The increase in interest rates is driving home prices up so much that it’s starting to look like our state is becoming less affordable. Recently the number of homes for sale has risen slightly from a record low, but then again, it’s nowhere near where it should be.
If you are a buyer, we want to share a few statistics with you that might make you think twice about buying a home in Colorado at this point. According to a recent survey, in January, the median cost of a home in Colorado was $594,500, but the median income is $72,331 per year. So if you’re trying to buy a house with that income or anything less, it can be tough to keep up with the mortgages and inflated living costs.
Will Buyers Losing Interest In the Market Bring Prices Down?
Nothing lasts forever, and though the prices haven’t stabilized, factors like hiked house prices, higher interest rates, and inflation have eventually taken a toll. Buyers started to back off, leaving the market dwindling and sellers confused. According to Redfin, about 63,000 home-purchase agreements were called off in July, equalling 16% of homes under contract that month. That’s the highest rate in more than two years! So what’s really happening here?
It’s a challenging situation for both buyers and sellers; if you are a seller, we hope you’re considering all of these factors when deciding which direction to take when selling your house. You may have buyers coming in with inspections and a contingency clause, and since the competition is less fierce than it has been for a while, it gives the remaining buyers more bargaining power as home shoppers. Buyers compete with one or two other offers instead of eight to ten, and some aren’t facing any competition. The pattern of buyer scheduling for tours has changed from four days to one. If a home isn’t checking all the boxes, the buyer is waiting until they find the right one.
The good news is that you can still sell your house for a great return if you think outside of the box. Axium can help you with a pre-seller inspection to make your listing stand out. Recently inspected properties are more attractive for the buyer, who may feel more confident about purchasing your home.
There are a lot of factors to consider when buying a home. Should you buy now or wait? What if the market is slow, and prices might go down? Would it be worth investing in a down payment, or should you just buy right now? These, among others, are common questions people should ask themselves when deciding what the best strategy is for buying a first home.
The truth is, there isn’t necessarily one best strategy. Most important is finding out what you can afford and that you’re comfortable with your decision. You should also weigh your needs against your wants and ensure they’re aligned before putting money toward such a large investment.
