The Housing Market: Is It Time to Get off the Sidelines?

The Housing Market: Is It Time to Get off the Sidelines?

Rising interest rates shuttered the Denver Metro real estate market during the second half of 2022. From last April to this January, the average closed price of a detached single-family home was reduced by more than $100,000, from $821k to $701k. The market was frozen. As the new year kicked off and the holidays were behind us, we began to see stabilization in the value of homes in our market and in interest rates.

After more than doubling in 2022 from 3% to 7%, mortgage rates through the first quarter of 2023 actually declined to a rate closer to 6.25% to 6.5% as of this writing. To provide some perspective, over the last 50 years the average mortgage rate has been 7.75%. So, while the current rates in the 6.5% range may feel high, historically they are pretty darn good. When my wife and I bought our first home 21 years ago, our interest rate was 7% and my dad said it was an incredible opportunity and shared that his previous mortgages had been in the double digits!

Based on most interest rate projections, rates are not expected to return to the 5% range for years. And because of our low housing inventory, we do not expect the market to correct much further, if at all. Last year we took a beating. Now, if anything, we expect the market to generally fall in line with a more historical appreciation rate of 3% to 4% annually. So, with stabilized rates and housing prices, the question has become: what are we waiting for?

Many home buyers and sellers decided to step off the sidelines and into the market towards the end of January. This resulted in a jump in supply and demand, and a recovery of some of the price correction we realized last year. In fact, the average price of detached single-family homes has already increased approximately 4% from our January low.

The difference this year versus the last three years is that we are seeing strong demand, but we are no longer seeing irrational bidding wars. Buyers are seldom competing on homes. The overall dynamic has generally increased our clients’ satisfaction and lowered stress across the market. Buyers are more discerning and making better decisions and reasonable offers, and sellers are selling at strong but fair market values. It’s a win-win.

It always takes a little time to adjust to change. As we all recognize that housing dynamics are different now and we have found a new normal, we can get going again. Life goes on. The market has gone through some incredible swings, and planning and pricing right is more important now than ever. If you are considering a move now or in the next few years and want to get a head start, visit for more information.

-Conrad Steller, owner of The Steller Group, a real estate company specializing in senior downsizing

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