Many of us are looking at buying a home or improving the home you currently have. Either way, it’s important to understand where the current real estate market lies. We spoke with a number of local experts in the real estate industry, ranging all over the Denver Metro area. We hoped to get an understanding on where the current real estate market is, what to expect for the next few years, and what trends are occurring currently.
Before we get into the questions, let’s introduce those who we spoke to.
STACEY STAMBAUGH MALCOLM – Savvy Real Estate
Stacey is a 3rd generation Denver Native who has over 10 years of experience in the Real Estate field. She has extensive knowledge of the Denver market buying and selling real estate. She covers all over the area, from Boulder, Monument, Vail, and Dacono. She works for Savvy Real Estate, which is a client centric company and will cover anything around the Front Range. They prefer not to specialize in a specific neighborhood to use their overall expertise to deliver the dreams and desires of each client they work with. Learn more about Savvy Real Estate.
SEAN LARKIN – Kentwood Real Estate
Sean and his wife Debbie have been in real estate for 18 years around the Denver area. Their business through the years is almost exclusively referral and repeat client based. Sean has an extensive knowledge of current market conditions and listens closely to what their clients are trying to achieve. Both he and Debbie has been recognized in the Denver Metro area by the Denver Business Journal in the “Who’s Who in Denver Business” issue and Million Dollar Round Table awards. Learn more about Kentwood Real Estate.
BERNADETTE MELTON – CO Listings Real Estate
Bernadette has been in the Real Estate industry for roughly 3 years serving the northern metro Denver area in Erie, Broomfield, Thornton, Lafayette, Longmont, and the surrounding areas. She loves helping find the right home for homebuyers and helping sellers close the door on one chapter to another. She enjoys building relationships and connecting families with the resources they need – from a mortgage lender to a handyman. Learn more about CO Listings Real Estate.
ADAM WAGGONER – GENERATOR Real Estate
Adam brings a unique perspective to the Generator team due to growing up in New York City. While holding a degree in Finance & Real Estate, he has spent over 10 years working in sports television production and is used to working in the fast paced, result driven Real Estate industry. For Adam, the ability to help someone find the right home is the ultimate reward and the reason he strives to give each person he works with his total commitment. Learn more about GENERATOR Real Estate.
How is the current market in the state of Colorado?
Stacey: There’s no stall currently, but in certain price points it’s very much a seller friendly market. However, it is pausing a little bit in that instead of receiving ~5 offers for your home on the market, you may only receive one. The buyers are taking their time in decisions as there’s a multitude of options available. Builders have picked up their market as well which lends favorability to the buyer market. What we’ve seen is that there aren’t a lot of sellers coming into the market until they find a place they want – leading them to stay in their current home longer.
Sean: The market this time last year was a seller’s market but it’s becoming more and more balanced with a caveat. If you have a property that is in good shape, it’s upgraded, and priced appropriately for what it is, the properties are selling quickly. The properties that need work, or haven’t been as well taken care of are becoming more difficult to sell. There are a lot of buyers who are less willing to do the work in fixing up the homes themselves. Those that sit, either need some work done or the price is overshot compared to the other homes.
Bernadette: This year’s market has started off more slowly than usual, and appears to be normalizing from a strong seller’s market into a more balanced market. Average days on market have increased this year, and offers are taking longer to come in. Sellers can no longer expect the multiple offers in the first two days of being on the market like they could a few years ago! There is more inventory available for buyers to choose from, and inventory seems to be picking up as the weather finally gets warmer. With better inventory and steady appreciation, we’re seeing a shift towards that more balanced market.
Adam: I still think it’s incredibly healthy – it’s still a sellers market overall. The majority of the front range is strong but there are a few pockets further south in Highlands Ranch, parts of Littleton, and East of Parker that are becoming more balanced. Those houses can stay on the market a little longer which can be healthy overall. In terms of the Denver area (including the suburbs), places are still good and healthy. If the homes are priced well and move-in ready with updated kitchens, they go fast and over the list price. In terms of pricing, we’ve seen some different strategies. Some agents are approaching the market by slowly underpricing to generate a buzz where people run to and send multiple offers. Overall though, we’re more balanced over the last 2-3 years and still more affordable than the Bay area or the East coast where property taxes are higher.
Have interest rates impacted anything? If so, what?
Stacey: We haven’t seen a lot of impact honestly, but interest rates are doing really well overall.
Sean: The interest rates are still historically low. A 6% has been really good previously and in the late 90’s or early 00’s, the interest rates were north of 7%. A number of people are buying at the maximum of their affordability which causes a few things. We don’t see the interest rates driving the buyer market, it all just comes down to life events more than anything. With individuals buying at their maximum levels, and the interest rates being overall favorable, it lets people get a more expensive home.
Bernadette: Interest rates are still at historically low levels, and almost nobody anticipated the rates staying this low for this low. It’s been a great opportunity for people to stay in their own homes and refinance to a lower rate, or use their equity to do home improvements.
Adam: They may have made an impact earlier in the year leading to people being a little shy in the market. They primarily did that to see where the economy was heading. Since then, we’ve seen a bit of a dip and have had customers who purchased a home at the end of 2018 already refinancing due to the rates. That’s remarkable and shows things are still historically low and attractive to first time home buyers.
Have you seen more or less people staying in their homes to increase their value, or are people moving from place to place to increase their equity overall?
Sean: We’ve seen it being more dependent on the family situation rather than the value of the property. Families with kids at a public school are looking to stay in the area. They may have friends of the family or their children have a friend group they don’t want to move from. This makes families look in a more narrow area, which limits the amount of options that are available. Some home prices can jump from the $500,000 to $900,000 or more which makes it harder to afford. In order to get there, families may increase their home value by improvements or just realize they need to wait until the right house comes on the market.
Bernadette: With the increased popularity of home improvement shows and increasing age of homes, many people are starting to remodel to increase their home value and their enjoyment of their home. With the rising home prices, many are choosing to stay put rather than move, unless there are outside factors at play – job change, having kids, becoming empty nesters, health concerns, etc. I’ve seen a trend towards moving to areas with more yard space and land since neighborhoods have become increasingly crowded. Of course there will be people who move around more often to improve their homes as they go because they find it exciting, but I think it’s the exception rather than the rule.
Adam: Depends on the situation of each individual. There’s been a challenge for the first time home buyer who was going to buy 3-4 years ago. The act of trading up due to home prices has increased a bunch. Even though it costs a lot more for customers to buy a home that is more expensive than prior, it’s still common-ish. I’ve seen a lot of people considering the home equity loan option to improve their home to jump ship or just improve their home overall to give them flexibility on their buying power.
What do you see the market doing over the next few years?
Stacey: There are strong indicators of the market correcting itself. We don’t envision a crash coming, nor do we see the interest rates increasing dramatically, but things will settle a bit. Prices won’t be increasing as fast as they are currently. Instead of a 10% increase on a home’s value, it may only be 3-4%. Since 2012, the market has been picking up full-speed so I expect it to level a bit. As buyers, it’s a little easier to play in the market. A lot of companies are still moving here which sheds light on other people moving and considering Denver as a home. We weren’t affected as bad in the market crash like Vegas for example, we’ve bounced back and continued to have a strong market since then.
Sean: As we continue to add 40,000 residents per year, we’re going to be adding more people to the state faster than we can build homes. We expect this to drive prices higher still. Maybe not as crazy as it has in the past, but the values of Colorado and the reasons for moving here will continue to drive those growth rates. Short of a catastrophe (market crash, stock market, etc.), it’s an easy place to want to move to with the quality of life and stable economy.
Bernadette: Over the next few years, I expext to continue to see a normalization in the market. Buyers will have more options to choose from as builders continue to increase inventory, and sellers will continue to experience positive gains in housing values. Of course, the market does depend on economy factors – stock market, interest rates, job creation & retention, etc. – but the Denver area should continue to see growth. The craziness of the 2016-2017 market appears to be a thing of the past, but the housing market in our area will continue to remain strong.
Adam: I think we’re still trending up in terms of home values and appreciation. We probably won’t make the digit gains we’ve seen, but there’s still such a demand here. Colorado – and Denver to be specific – is on the radar of a lot of people and have seen people move here in droves. The lack of supply versus demand still show signs of this occurring. The job market and salaries are important, but the bigger picture is that people who are moving here are more in a telecommuting based role. That means they’re living here, even though may work somewhere else virtually. In order for the market to shift or drop, it’s going to take a bigger, global, macroeconomic effect to have a bigger impact on the market.
What does this all mean?
It’s intriguing to see the commonality between the answers given by the experts in the field. It appears that the market may be leveling off a bit, but it’s expected to continue to be a strong market overall. If you’re looking to sell your home, make sure your current home is up to par on its upkeep (exterior work, interior work, and anything in-between). If you have repairs, make sure they are are complete or else you’ll be sitting on the market longer than you anticipate.
If you’re a buyer looking for a home, don’t be afraid to take on a home that may need some improvements. Those houses appears to be on the market longer, leading to a potentially lower price point. By finding a home renovation company like 5280 Exteriors, you should feel confident that your projects will be completed in a timely and professional manner.
Whether you’re looking to buy or sell this year, it sounds like the Denver market should continue to be a strength for many years to come.
For those looking for a real estate agent, or someone to walk you through the process – we cannot help by recommend these professionals who helped lend a hand. Their links are listed above, and we hope you find the home of your dreams or make the home you have perfect.