When 2024 started, Denver area realtors optimistically anticipated that interest rates would drop, but they also expected limited inventory to keep prices high.
They were mostly right.
Interest rates stayed high, and while inventory rose in the second half of the year, it remained historically low, keeping prices elevated. As of November, the median price for a single-family home was $650,000, up 2% from last year.
“No one knows for sure what will happen with rates, but we may never see interest rates at 3-4% again,” said Amy Terry with The Agency.
This year’s slower market, with 39,153 properties closed through November, down slightly from last year, taught realtors three lessons:
- Sellers should prioritize pricing and making a strong first impression.
- Sellers should be prepared for their homes to take time to sell and consider offering concessions.
- Buyers should prioritize their goals and finances over interest rates.
“One of the biggest lessons this year was that our market was predictably unpredictable,” said Stacie Staub, founder and CEO of West+Main.
“Just when we thought we had it figured out, it would pivot again, and listings we thought would go fast while more difficult-seeming listings received multiple offers.”
Sellers need to focus on pricing and first impressions
Proper pricing and a strong first impression are essential. Buyers should prioritize pricing, cleaning, and staging.
Repair scratches in wood flooring, clean and stretch carpets, install matching light bulbs, and test for radon to mitigate potential inspection issues, said Craig Harcek with 8z.
A small floor scuff won’t keep a buyer from purchasing, “but there’s not a lot of margin for error right now,” Harcek said. “There almost always are other houses to look at.”
He encourages sellers to do prep work and eliminate uncertainty.
“If you were going to live here for another five years, what would you want to replace or improve?”
Be prepared for more time on market
Sellers should recognize that bidding wars are over.
“They need to reset their expectations,” Terry said. “They shouldn’t expect 15 offers in three days and instead should realize their home could sit on market for a few months.”
Sellers should be ready to negotiate, even if they believe their price is set correctly.
In November, nearly half of the homes sold in Denver and across the state went for less than the asking price, and about 60% of Denver metro sellers offered incentives such as closing cost assistance, interest rate buydowns, or repair credits.
Sellers also need to realize their first offer might be the best.
“With a few properties, it might be better to hold out,” Terry said. “But often the first offer is the best offer.”
Buyers need to focus on personal goals
Buyers should avoid fixating on interest rates or trying to time the market. Instead, they should consider what makes sense for their circumstances and goals.
Harcek urges buyers to focus on why they are buying and the home features they need.
“Many of them are scared of making a decision and then regretting it,” he said.
“When seeing a house, they want some assurance that if it’s a 9 out of 10, it’s OK to move forward, rather than thinking there’s a 10 out of 10 that they haven’t seen.”
Terry emphasized that buyers should stick to their budgets.
“For more than a year, we’ve been hearing people say, ‘date the rate and marry the house.’ That’s a risky premise,” she said.
“There are no guarantees. You should only buy if it makes sense, and you can afford to do it now. You need to be comfortable with the payment and not count on being able to refinance at a lower rate.”
The news and editorial staffs of The Denver Post had no role in this post’s preparation.
