Summer 2023: Now Is a Great Time to Buy a Home!
After several years of a volatile homebuying market, there are quite a few reasons why NOW is a great time to jump into homeownership:
Improved Market Conditions
Throughout 2020, 2021, and much of 2022, the Denver market was experiencing unprecedented low inventory and skyrocketing prices. Almost all homes were selling with multiple offers and bidding wars often going $20K, $30K, or even over $100K over asking price. Buyers were giving up all their rights of inspection, appraisal, or any due diligence in order to be competitive. Many purchases were all cash, making it almost impossible for someone with a loan to compete. Fast forward to summer 2023, and most of that is behind us. Although we are still seeing some multiple offer situations, we are also seeing homes sell with just one offer. Whereas in the past almost all homes sold within days of listing, as of June 2023, the average days on the market was 23. This gives homebuyers an opportunity to take a breath when making the decision on the biggest purchase of their lives. It also gives buyers some negotiation power. Even though most homes are still selling at or even a little above asking price, buyers are not typically giving away their rights under the purchase contract.
Inventory Is on the Rise
Interest Rates Are Stable
True, rates are double or more of where they were over a year ago. However, we are seeing less volatility. In a recent statement from Lawrence Yun, the NAR Chief Economist, he said, “Low inflation means low mortgage rates…CPI rose by 3% from one year ago, which is much lower than the 8-9% hikes of last summer and is the slowest gain in over two years.” The less volatile rate swings increased mortgage purchase applications by over 10% last month.
Owning Is Better Than Renting
Just like housing prices, rents have been on the rise. When you are renting, your monthly payments benefit your landlord rather than you. As soon as you buy a home, with each passing month, you are building towards your own wealth in the future by paying down your mortgage and taking advantage of your home equity as it appreciates. You have to pay to live somewhere, so you might as well be the beneficiary!
Over Time, Home Prices Will Continue to Rise
Over the last several years, we have seen many buyers step away from the market because they were concerned that prices were hitting a ceiling, and they did not want to buy right before a “crash.” If only those people had bought a home one, two, or three years ago, they would be sitting on a lot of equity now! We do not predict that pricing will go down anytime soon. We still have a lot of people across the country relocating to the Denver Metro area due to our job market, our incredible four seasons, and easy access to the mountains and outdoor recreation. These factors will contribute towards keeping our housing market healthy and strong.
Are you trying to navigate the home-buying market? Check out our videos on the homebuying process and buying in today’s market at www.youtube.com/@TheStellerGroup. And whether you are a first-time homebuyer or buying your tenth home, The Steller Group’s experienced team can help you to navigate this ever-changing market. Give us a call today!