Heading into 2024: Market Update

You probably have heard that the real estate market in Colorado slowed in 2023. Buyers finally had opportunities to negotiate, sellers were offering concessions for temporary rate buydowns, and buyers, for the first time in over a decade, were able to take more than 72 hours to decide if they wanted to submit an offer. But maybe you hadn’t heard that the heat in our market is back! 

Something strange happened during Christmas week in 2023. Homes that had been sitting for months on the market sold with multiple offers. It could be because of the influx of holiday visitors hoping to find a home closer to their children, but the most likely culprit for the sudden flip in market activity is lowering interest rates.

Rates are in the low 6% range, which is creating hope and confidence among home buyers. Most predictions, on the national level and locally, suspect that dropping interest rates will heat up our Colorado Home Buying market once again- which is something we are already seeing. 

There are also many home owners who have felt “stuck” in their homes because of how appreciation and higher interest rates have made purchasing another home unaffordable. If you consider the example of a growing family who has outgrown their starter home that they purchased in 2019 for $500,000 with an interest rate under 3.5%. Now consider how home prices have soared and so have interest rates. If their current home appreciated to a current value of $750,000 and the larger home that they want is closer to $1,000,000 and with interest rates where they are- it could be 4x the payment. Most buyers in this position have been wanting to move but could not justify it or afford it. With so many in this same situation we have a pent up buyer pool, and possibly also many sellers that have been waiting for the market to heat up again before sticking their home on the market. 

Considering all these factors, many expect to see a very active year in the Colorado market. If you are considering to buy or sell in 2024, the success of some may be due to their preparation now.