If you’re like me, the first of the new year feels bright, fresh and exciting as we anticipate what the new year might bring and we set new goals! The last few years have brought some amazing and unprecedented things to the Denver housing market like we’ve never seen before and we will all soon see how this translates into the next 12 months. Because I love to be able to provide my clients with as many helpful resources as possible, in this series we’re going to discuss buyer and seller trends, hot projects for homeowners in the new year and a look at the Denver housing market in general and what we might expect in the next 12 months. Whether you’re looking at buying for the first time, selling a home or working on some home projects then this series is for you and I’m here to guide you every step of the way!
Recap for 2022
Lets start with a quick recap of 2022. All of us here at Colorado Home Realty (CHR) shared some year-end stats last week, and the average sold price of all property types ended 2022 at $640,608, or 2.8% higher than the end of 2021 at $622,987. Denver is still a hot spot for those relocating and many people are coming from California, Texas and Massachusetts. Luxury homes, or those nearing $1 million in listing price, have slowed down a bit and some reports estimate that luxury home sales have slowed down as much as 35% according to Forbes. In the rental property market, for those homeowners who also own rental property, 2022 brought zoning restrictions in tourist areas and ski resorts which meant crackdowns in short-term rentals. Also from CHR, inventory is higher than 2021 and seller Concessions ended December averaging $5,118 per contract. Check out some more stats from me and CHR every month as we breakdown market analysis!
Buyer Trends and Predictions for 2023
From CHR CEO Matt Hudson, “We believe Colorado real estate will be strong in 2023, most likely experiencing a 2-5% appreciation in the first half of the year. Inventory will remain relatively low as a result of current homeowners’ reluctance to give up their existing low-rate mortgage, and buyer demand is projected to increase as a result of declining interest rates, likely starting in February of this year.” Overall, it sounds like Denver will have another strong year for real estate and those investing in it.
Typically, inventory increases in January as many sellers hold off on listing their home until the new year which means there should be more homes to look at as compared to a month ago. As we’ve discussed before, a lot of the demand and pricing of the housing market in Denver has to do with a low amount of inventory and a high amount of buyers. Real estate resources across the board predict a price drop in the housing market of anywhere between 1-8% and they are also predicting a drop in the number of homes that sell. These stats include nationwide numbers, so Denver will likely look different, meaning that home prices may drop slightly or even stay flat because it is such a desirable market.
First-Time Buyer Trends and Predictions for 2023
Looking at overall buyer trends, more housing inventory means more starter homes for first-time buyers. Starter homes aren’t a specific category of homes but they can include those with smaller square footage, a lower bedroom count and may possibly need some updating or maintenance work. This likely will not be a forever home; or one that the owner will retire in. In the new year, first-time buyers can also enjoy buyer programs based on their chosen loan type.
FHA, VA and USDA loan types all offer first-time buyer programs which can allow perks like tax credits, a lowered down payment and offers help to qualify those with low and moderate incomes. (FYI: take a look at the 4 loan types if you need a refresher on what is best for you.)
Experienced Buyer Trends and Predictions for 2023
If you’re an experienced buyer and looking to buy a new home in 2023, you may be curious if this is a good year to buy a home or if you should stay put and let the market ‘cool down’. Many buyers talk about this elusive time period in which the Denver housing market cools down, possibly back to pre-pandemic levels and the odds of that happening are not good (as we’ll discuss later in the series). The good news is that if you’re a homeowner who is buying a new home and selling your old home in 2023, there is a very good chance you’ve gained a great amount of equity, especially in the last few years and that can help increase your buying power. In contrast, you may be looking to sell your home in order to buy a smaller and more manageable home which means you can pocket the profit. You should see a higher increase in your home equity the longer you’ve been in it, which may in turn increase your buying power.
What are you most excited for in the new year? Are you in the market to buy or sell your home? Call and text me at (720) 323-4176 or email me at [email protected]