Denver’s housing market is undergoing a major transformation, but it’s still not a buyer’s market
Denver – The pendulum is swinging in Denver’s metro housing market, and now it favors buyers more than it did in the past two years.
Inventories are up 17% from this time last year, and homes remain on the market an average of 25 days in August, according to the Denver Metro Realtors Association (DMAR).
Now sellers are trying to sweeten the pot for buyers.
The market forces buyers and sellers to get creative in an effort to combat rising interest rates.
“I think it’s healthy,” said Kelly Vogel of HDS Mortgage.
It’s not quite a buying market yet, but it’s balancing out,” said Joy Dysart of HomeSmart Realty.
The market was definitely tough for buyers.
“Good luck getting in,” said lifelong Five Points resident Dennis Hilliard. “Even a dog should get a job.”
“I’m going to die to be a homeowner,” said 26-year-old Heather Blanchett, waiting tables at Five Points and waiting for a turn in the market. “I’ve always dreamed of owning a home.”
While she’s glad things are starting to fade, the problem for her and for buyers like her now is that interest rates are skyrocketing.
“Getting a loan, I feel that’s increasingly difficult,” Blanchett said. “Interest rates are crazy, and buying a house in general is pretty scary.”
But Dysart and Fogel say buyers have some new options, including asking for seller concessions, which could help lower interest rates.
“I think we’re entering a market where sellers work with buyers,” Vogel said. “And that’s great when people negotiate again.”
Here’s how it works – let’s say a buyer pays $500,000 to buy a home. They come with a full price quote, but then they ask the seller for a $6,000 franchise, essentially cash back at closing. In the closing table, this cash goes directly to the lender to purchase an estimated interest rate of 5.2% to 4.75% or so.
A $6,000 franchise could save them $250 a month,” Fogel said. “If they get a $12,000 lien, they could save $350 to $400 a month on mortgage payments.”
“This is an opportunity for them to reduce their payments, which is very important for buyers,” Dysart said. “It’s their monthly payments.”
Seller concessions unheard of in six months. Now, they’re a big part of the home-buying equation in metro Denver and Colorado.
“Sellers are now ready to work with buyers to close the deal,” Vogel said.
“It motivates buyers,” Dysart said. “There are still people who need to sell their homes.”
It’s definitely interesting to Blanchett.
“That would be very tempting,” Blanchett said.