Denver Market Update
Denver Market Update
Real Estate News – September 2024
Is there an interest rate tipping point?
> We are closing 3,000-5,000 homes a month, which hasn’t changed much in over 20 YEARS.
> With the population growth we’ve experienced during that time, it appears there is growing pent-up demand. Massive apartment complexes have been built all over town. Many of those renters will want to buy soon.
> The higher interest rates have kept sellers in place much longer than they would normally have been. They’re holding tight, not wanting to sell their 3% mortgage to buy a 6-7% mortgage.
> As rates start to decrease, possibly lower again in September, I believe there will be a “tipping point” when this demand comes to the forefront and the market is on fire again. Buyers not wanting to be renters anymore and Sellers deciding “it’s time!”.
> What is that tipping point? What’s the magic interest rate? That’s the billion dollar question.
Quick Summary:
- Home builders are creating more flex spaces, fewer hallways (more openness), and smaller floor plans to assist with affordability.
- Pent up demand continues to grow, with only ~4,000 homes being sold per month and over 10,000 listings on the market. We’ve been seeing the same amount of sales for YEARS now. This simply can’t continue for the long term with our population and desirability of living here. With rates coming down, 2025 could be a barn burner!
- The condo / townhome market is very slow, spurred on by rising HOA fees, difficulty in HOAs securing insurance, higher interest rates and higher prices.
- Current interest rates are ~6.1%.
Details:
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