Colorado Housing Market Overview and Outlook for December 2022 

As of December 2022, the Colorado housing market is a buyer's market. From Denver to Boulder to Fort Collins, Colorado’s cities are experiencing declining home values and higher than normal inventory levels. In this blog post, we will explore how the real estate market has changed in the past year and provide an overview of what to expect in the upcoming months for those looking to buy or sell in Colorado. 

The Impact of COVID-19 on the Real Estate Market 
Like many other industries, the pandemic had an immediate impact on the real estate market in 2020. As people moved away from large cities due to fear of infection or job loss, housing prices went up in Colorado, way up. Sellers were reluctant to list their homes in fear of not finding a replacement as buyers were hesitant to purchase a new home due to extreme multiple offer scenarios driving prices 10-25% above asking.  However, due to decreased demand from high-interest rates, the housing market slowly began to recover throughout the end of 2022 and into early 2023. We will watch to see where it goes and report to you as we know more.

Demand for Colorado Homebuyers 
Inventory levels have been at an all-time low as demand for homes continues to exceed supply, but this is beginning to change. This is true across all price ranges under about $2 million; starter homes with 3 bedrooms that would typically cost $400k are now going for upwards of $375k due to a lack of competition between buyers and rates that have doubled. For sellers who have been able to find a buyer quickly, they have seen high returns on their investments—in some cases even higher than pre-pandemic prices! It does vary neighborhood by neighborhood, city by city, which is why having a professional interpret market conditions for you is more important than ever. On average, homes contracted within 40 days in November 2022 compared with 15 days in December 2021, with many under 5 days on market.  As a VA homebuyer right now, the opportunity is better than ever before. VA buyers have an advantage as they can purchase homes at today's discounted prices, AND assume (inherit) the Seller's low-interest rate attached to their current loan. We've seen VA buyers achieve a home purchase of $50,000 under market value, and take on a 2.25% mortgage rate. If you or anyone you know is a veteran, we encourage you to reach out to us. Investors paying cash are also in a highly advantageous position to purchase at low prices without having to account for post-pandemic interest rate hikes. 
  
What Does the Future Hold? 
As we look ahead into early 2023, many experts predict that inventory levels will remain fairly low while sale prices will continue slowly increasing because of current trends in buyer demand and builder confidence. Homes are selling with favorable buyer negotiating positions in regards to cash paid at closing, lower purchase prices, more inspection repairs,  more inspections allowed, appraisal safety nets, lower cash to close, rate buy-downs, etc. So before rates go down and buyers lose their strong negotiation position as more and more people flood the market once again, jump into the market and secure the home you plan to own for many years to come at a low-low price.

Conclusion
The Colorado housing market has experienced highs and lows over the past year but looks promising moving forward into 2023 with sale prices predicted to increase, low inventory, better consumer education, and more creative financing options available. Those looking to buy or sell should act soon before competition rises too high and prices become too inflated! Reach out to us to ask questions or start today.