Boots on the Ground - August 2023

The month of July is typically slow for real estate in Denver and this year was no different. Even though it may feel a bit ominous for sellers, this is the time of year where the pace starts to slow and the rush of the spring selling season comes to its official end.

It's also the time of year that we start seeing market data move in a less positive light. As soon as that happens - without fail - local "journalists" start slithering out headlines about how the market is in peril and we may be on the cusp of the next housing crisis and...blah blah blah.

In reality, a lot of what we're seeing in the data are homes closing that missed the mark during the spring selling season, have been sitting on the market, and now after one or more price reductions or some other kind of improvement, these homes have finally found a buyer.

As a result, the data for "time on market" increases steadily through the second half of the year - skewed by homes that have been on the market for 3-6+ months - and the data for average/median price corrects away from the peak and settles wherever it settles for the year.

The charts below show how this has been a pretty consistent theme each year:

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Obviously, none of this changes the myriad of new challenges that have emerged in the housing market. The "golden handcuffs" problem as it's been dubbed, has people feeling stuck. They absolutely love their 3% mortgage but don't necessarily love everything about their home anymore.

As we're seeing now, with new listings down by 30%, this has a good amount of people staying put, hopeful for a better market. While I've seen little bits of optimism from the mortgage market, I'm fully confident we won't see the return of 3% interest rates - probably ever. It'll take some time but eventually people will warm up to rates hovering in the 5%-6%+ range and will come to realize that saving $500-$1000 each month just isn't worth it in the grand scheme of things.

In the meantime, finding a "deal" should be reconfigured to finding the best deal on a mortgage. I myself have been able to lock in with a 5.5% mortgage rate while every headline you see shows rates at 7%. There's always a workaround if you look in the right places! Knowing that, I've been able set myself up for an amazing opportunity while planning to keep my current home and renting it out for some added income. Little moves like this, in times like these, will pay massive dividends down the road.

So in your conversations with friends or family, if you hear someone talking about how they'd love to move but "it's not a good time" just have them give me a call and we can explore some options for them. As long as you're willing to go the extra mile and get a little creative you can make any market work to your advantage!