DENVER — Metro Denver’s housing market has taken a big shift. It’s now among the most vulnerable markets in the country, according to the real estate brokerage firm, Redfin.
The Redfin risk score is based on interest rates, home sales and price drops.
It might not be the best time to buy, but for many, it’s better than it was a few months ago.
“Oh, this is gorgeous,” said Shauna Morse as she walked through a home on the market in Jefferson County. “We had a blow up in the market, and then all of the sudden, it calmed down a little bit.”
Recession fears and higher interest rates are contributing to a shift in the market, but most experts say to take a deep breath if you’re a buyer or a seller.
“Prices are down well over 20% from the height in April and May,” said Lori Abbey with The Abbey Collection at Compass Real Estate. “But they’re still up 10% from the same time last year.”
On the seller side, real estate experts like Abbey say if you’re priced right — and you don’t have to make a price drop — you’re still getting about 1% over ask.
“We still skew toward a seller’s market,” Abbey said.
On the buyer side, things have also calmed down.
“A buyer six months ago was looking at a "prettier interest rate," but they were also looking at homes that were consistently going over list price by $25,000, $50,000, $100,000 or more,” said mortgage broker Jimmy Everetts, owner of Everetts Lending.
Everetts says the market appears to be balancing out, and even interest rates, which spiked two or three weeks ago, are coming down.
Everetts also believes buyers don’t need as much cash to close.
“They don’t need that $25,000, $50,000 in extra cash if they can accept the fact that the payment isn’t as pretty as it may have looked at a 3% interest rate,” Everetts said. “I genuinely believe buyers are in a better position today than they were back in February.”
Redfin does consider metro Denver vulnerable because some homeowners who bought when prices were out of this world may have high debt compared to their income level and home equity as prices fall back to Earth, which could force homeowners to foreclose or sell at a loss.
Denver ranked 34th out of the 98 metros studied with a score of 53.8, while Colorado Springs was right behind it with a score of 53.7.
One of the risk factors studied was the number of homes on the market that had price reductions. Metro Denver had twice as many homes with price drops compared to the same time period in 2021.
But Abbey and Everetts both say the sky is not falling and homeowners should keep calm.
“In two or three years, they’re going to be just fine,” Abbey said of those who bought the past two years. “They’re not way upside down. Very few people are in a really terrible position because we are still a growing market.”
“It’s certainly still a seller’s market,” Everetts said. “Buyers don’t have their pick of the litter, but there are a lot more opportunities for buyers right now than we’ve seen in the last couple years, by far.”
Morse is selling her old home and buying a new one. She feels like it’s a sensible time to do both.
“I’m feeling great with where the market is right now,” Morse said.