Real Estate

Changes to the Colorado Real Estate Market in 2022

Ben Stephens Real Estate

In the United States, home prices are increasing and higher interest rates are causing home sales to decline. According to reports from the National Association of Realtors, buyers are becoming savvier, which is causing a cooling of the housing market. The cooling effect parallels the changes in the economy triggered by the collision of the inflation that has spiked in 2022. In addition, the coronavirus pandemic has led to a multitude of economic concerns that include: higher borrowing costs, a battered stock market, higher costs for everything and consumers’ inability to properly save for down payment.

Buyers’ Reluctance

In the state of Colorado, inspections are becoming trickier and first-time home buyers are exhibiting the highest level reluctance in recent memory. As a result of residences sitting on the market for months, the asking prices are being constantly cut down. However, most prospective home buyers are still settling for rentals instead. The main reason appears to be the higher cost of home ownership.

New Economic Conditions

A realtor with lots of experience listing houses for sale in Erie CO affirms that the housing inventory (or active listing) in Colorado is constantly adjusting to new economic conditions. The metropolitan areas are becoming increasingly expensive to buy a house in or to even live in. Moreover, professional house hunters are multiplying by the week. Their job is to buy property and fix it up in order to sell it at a higher price. They are, however, over-saturating the market and creating unnecessary competition for other types of buyers. In addition, cash offers are becoming more frequent and affordable options are lessening by the month. As a result, the payment-to-income ratio is shifting at an alarming rate.

houses for sale in Erie CO

Main Housing Trends

All in all, the main housing trends of 2022 Colorado include: fierce competition, rising rents, unsustainable rate of home appreciation, decreased affordability on account of higher costs of building materials, consumer pull back and increasing inventory. In this climate, most homeowners are inclined not to sell and are also unlikely to refinance their mortgages. Furthermore, new constructions are not having a significant impact on demand and affordability limits are becoming increasingly obvious.

As the trend of refinancing mortgages is starting to slowly fade, prices are slowly stabilizing even though rents are still climbing and, therefore, putting a lot of stress on consumers. The rental market is not yet stable and rental prices are not showing significant signs of decline. Nevertheless, there is a lot of hope for the future due to the end of the pandemic and the normalization of the political climate.

Conclusions

To sum up, the housing inventory is adjusting to new economic conditions and higher interest rates are causing home sales to decline. Inspections are becoming trickier and first-time home buyers are exhibiting an unusual level of reluctance. In addition, the trend of refinancing mortgages is met with a significant setback even though prices are slowly stabilizing. The rental market in particular is becoming more hostile for consumers as rents are continuing to climb. However, predictions of future developments entail a stable real estate market and a booming housing inventory.

What to Know When Buying a Home in a Competitive Market

Ben Stephens Real Estate

homes for sale in Denver

Buying a house isn’t easy even at the best of times. It can require a lot of different steps, and you don’t even know if the people you’re dealing with are as forthcoming and transparent as they present themselves to be. In a competitive market, all of that will be even more exaggerated, and you’ll find you have to be very well-informed and prepared for every eventuality.

Your Credit Score Is Very Important

Credit score is important even when you’re not trying to buy a house in a competitive market. When you are, and you might be required to make a better offer to win the home of your dreams, then the amount you can borrow will trump all else. With a low credit score, that means your interest and monthly payments could skyrocket.

A limited credit score translates in fewer options and a lesser opportunity to find the house you want. Even if you do find it, you might run into a lot of obstacles on your way to ownership – such as the fact that the seller might have several other buyers to choose from.

Moreover, you’ll find that your credit score will also be affected by factors you might not expect – such as the option of getting pre-approved. Mortgage pre-approval will requires a credit inquiry which can decrease your buyer’s credit score by a few points at the very least. As we will see in the following, this factor can have a significant influence on the home buying process as a whole, especially in a competitive market like the Colorado home buying market.

Pre-Approval Is a Necessity

There’s really no way around it. When you’re trying to buy a house in a competitive market, it’s essential to have a pre-approval letter in hand, so that home sellers will take you more seriously and realize that you have the money to back up your offer.

Being pre-approved for a certain mortgage amount means that you have a guarantee that the bank or lending company you’re getting the money from will approve your loan without question. That already gives you a huge advantage over other buyers, and in a competitive market that can be a real game changer.

Hire an Experienced Realtor

Experience is often very important in real estate. If you’re looking for homes for sale in Denver the competitive local market can really get in the way and lead to a lot of problems that first time home buyers and inexperienced realtors will find it hard to deal with. Even if it’s not your first time, spending less and hiring a less experienced or less skilled real estate agent can lead to important delays that would give other buyers a good opportunity to step in.

Speed is of the essence, and so is accuracy and the ability to avoid costly and time-consuming challenges. With the help of a seasoned realtor who has been around the block and knows exactly what the local market entails, you can achieve your goal without difficulty, as well as getting your pre-approval on time, finding the right house, negotiating the perfect price and getting all your documents ready to close the deal in record time.