Spring Market Update 2024

Interest rates have continued to be a driving force in our market. Economic predictions indicate mortgage rates may decline modestly this year. This would ease the cost of borrowing and generate an increased demand for home sales.

For Buyers - The question many are considering is whether to buy now with rates in the 6.75% range or wait until rates drop a bit. My opinion is that it's best to buy now rather than later for two reasons:

#1 - If interest rates begin to decrease, it will lead to an influx of buyers into the market. The pent up demand will result in increased competition and in turn drive up the prices of available homes. Buying now means more selection, less competition and lower prices. And, there is always the option to refinance if interest rates drop.

#2 - For perspective, interest rates were at about the same rate in 1998 that they are now. If a buyer in 1998 had waited until interest rates dropped to 5.875%, they would have been waiting 5 years for a better interest rate and during that period, home prices increased over 50%. In this example, waiting for a lower interest rate would have been very costly.

For Sellers - Spring is the best time to list their home because buyers have the highest sense of urgency this time of year. Current statistics across Boulder County show that the number of homes on the market is increasing and the number of sales are increasing while prices are either flat or rising slightly. These stats show that the market is active and it's a good time to sell.

Whether you are considering buying or selling, please contact me anytime to discuss how to make the current market work for you.

Happy Spring and All The Best,

Rich

Black Friday Real Estate Deals + Happy Thanksgiving!

The real estate market has continued to slow as we enter the holiday season. This is completely normal for this time of year and as always, the slower market offers an excellent opportunity for investors and owner occupants alike. I have investor clients who have done incredibly well buying rental properties during the holidays and it's also a great time for owner occupants who happen to be looking right now. Every year there are sellers who came on the market too late in the season and at too high of a price. As the holidays approach, some sellers become very motivated.

Traditionally, I see properties selling at a 5% discount during December, but this year it is entirely possible to purchase a property for 10% lower than it would have sold for this past spring/summer. And as a bonus, it will most likely be worth more by next March. I have seen this pattern play out year after year.

High interest rates are the reason why the real estate market is especially soft right now, but interest rates have recently dropped a bit because of reports showing that inflation is under control. With some seller paid closing costs, it's possible to get a rate that starts below 6% for an owner occupant. Please call me to discuss the opportunities that the current market presents.

For sellers, it's best to list after the New Year since the market will pick up once the holidays are over. I'm predicting an active market in the first half of 2024.

If you are interested in viewing the 3rd quarter real estate statistics for your specific market area, click here.

Lastly, I'd like to take a moment to express my gratitude to you, my clients, for your business, referrals and friendship. I am sincerely thankful for you. Happy Thanksgiving to you and your family!

All the Best,

Rich

Creative Financing

The number of sales is down 20% compared to this time last year. The main reason is that higher interest rates have made homes less affordable. The current 30 year fixed rate mortgage is about 7.25%. A year ago, the interest rate was about 5.5% and two years ago it was about 3.25%. A recent study found that 71% of would be buyers say that they won't look to buy a home until interest rates get back in the 5's. It's hard to say if or when interest rates will be in the 5's, but there are creative financing options that a seller can offer in order to help a buyer lock an interest rate in the 5's.

Mortgage rate buy downs are becoming more popular and in some cases are the driving force behind a sale. If a seller pays 3 or 4 points to buy down the rate, a buyer could lock in a roughly 5.75% 30 year fixed rate (depending on the rate at the time). A seller would be motivated to pay down a buyer's interest rate because it could help sell their home and could actually save the seller money. For example - a seller who is considering reducing their price by $50,000 may be better off paying $25,000 towards discount points so that a buyer can get a rate in the 5's. In this example, the seller saves $25,000 and the buyer saves over $500 per month on their mortgage payment. The old adage in the real estate business is that, "Buyers don't care as much about the price as they care about their payment."

For Buyers who have been sitting on the sidelines, call me to discuss how Seller paid discount points could get you back in the game.

For Sellers who are hesitant because you've heard the market has slowed, call me to discuss how we can use this strategy to your advantage.

As always, I appreciate your business and your referrals. I hope you have been enjoying the end of summer.