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Denver metro housing market moving again after sluggish 2023, experts say

Home values and property taxes are up, but interest rates are down, giving buyers confidence.
Denver metro housing
Posted at 5:26 PM, Feb 06, 2024
and last updated 2024-02-06 20:12:03-05

DENVER — After sluggish sales in 2023, the Denver metro housing market appears to be on the rebound in 2024.

Experts say interest rates are coming down and the market is moving again.

“Houses priced anywhere under $600,000, those are really selling like hot cakes,” said realtor Joy Dysart with HomeSmart.

Dysart recently listed a home in Aurora at $560,000.

“We had 14 showings, two offers and we went (under contract) at $20,000 over ask,” Dysart said. “And we got an appraisal gap of $26,000, meaning the buyer has agreed to come with additional cash if the appraisal comes back low.”

Nate Hoffman recently jumped into the Denver housing market as a new homeowner.

“This is just perfect, yeah,” Hoffman said as he looked at the view from the balcony of his new condo at the Vallagio Lofts. “A lot of sunlight. It’s perfect. South facing.”

After sitting on the sidelines of the housing market for years, Hoffman finally took the leap and closed on his condo in late January.

“I felt like the market started to ease a little bit,” Hoffman said. “At my age, at 55, I’m like, ‘I gotta get in. This is ridiculous — the high rent.’”

Buyers are also seeing their money go further as interest rates have fallen about two percent since December.

The biggest hiccup in Colorado’s housing market is skyrocketing property taxes, which are just now being mailed out for 2024.

“We’re just now seeing the finalized data,” Dysart said.

Property assessments spiked last year — up an average of 40% across much of Colorado. However, the state legislature intervened during a special session, giving homeowners a $55,000 exemption among other county-by-county tax cuts.

In Denver County, even though assessments or values went up about 33%, after reductions, taxes are only up about 17% for 2024. In Jefferson County, assessments are up 36.5%, but taxes are up only about 20%. In Larimer County, even though assessments are up 40%, taxes are only up about 17%.

A battle is brewing at the Colorado State Capitol over a bill that could increase taxes on some short-term rental properties.

According to the Boulder County Treasurer’s Office, tax bills will be mailed out early next week. Because of the changes in assessment rates, mill levies and the $55,000 adjustment to residential properties, the county said it is difficult to determine a median change in value. Many property owners are seeing lower taxes on their property than expected.

Douglas County reported the range of value change was 30 to 60% for 90% of the homes in the county, and while taxes are up, there was "no consistency from metro district to metro district in mill levy determination." As a result, Douglas County said that "gives us this wild range in percent change in property taxes. Neither the median nor the average is informative."

The median increase in property taxes for Larimer County in the 2023 tax year, collectible in 2024, after reductions is close to 17%, according to the county. This is only for residential property, the county said.

“That’s a big deal,” Dysart said. “And buyers are feeling better.”

Even though interest rates are still at five to six percent, buyers like Hoffman are feeling more confident.

“With the hopes of refinancing, which, that will happen,” Dysart said. “It always does. It’s easy to do.”

“I found my place," Hoffman said. “Hop on the light rail, go to a Nuggets game. I was paying a little bit less in rent but living in a shoe box.”

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