Are you wondering when is the best time to buy a home in Denver? Much like seasonal weather patterns, real estate trends fluctuate throughout the year. If you’re in the market for a new home, it may be in your best interest to wait for what’s often referred to as, a “buyers-market.” Inventory, demand, and rates are major factors in finding the right time to shop for a new home. There are certain seasonal trends that make buying a home more advantageous than other times of the year; however, waiting too long may pose adverse risk — especially in a highly competitive housing market such as Denver, Colorado.
Best Time to Buy a Home In Denver
The best time to buy a home in Denver is right now. All signs point toward decreased affordability for many home-buyers in the Denver Metro Area. Before we dive into the typical trends associated with home-buying, it’s important to consider your local market factors. If you’re waiting for the best time to purchase a new home in Denver, there is no time like the present. Unlike many other parts of the nation, Denver’s housing market is extremely competitive.
No Longer Waiting for ‘Buyer’s Season’
While winter months in Denver have historically provided higher inventory and lower price tags, this was not the case in the 2021/2022 winter season. With inventory at record lows in Denver, it’s never been more difficult to find a home in the metro area. Zillow’s home value index for the city of Denver is just under $600,000 as of January 25th, 2022. When you consider that “Denver home values have gone up 19.1% over the past year,” it may be in your best interest to buy a home sooner than later.
Factoring in the Best Time to Buy a Home
Whether looking for the best time to buy a home in Denver metro, or the more rural Colorado town of Gunnison, some factors remain universal. The following components may influence the affordability of the housing market for those looking to buy their first home:
This may be the most obvious factor in home-buying affordability: mortgage interest rates. As was seen curing the first year and a half of the Covid-19 pandemic, lower interest rates lead to increased demand for real estate. As rates began to climb again in the first part of 2022, many people worried they missed out one of the best times to buy a home in Denver. Depending on your personal financial situation, interests are still at historic lows, so this may be the best time to buy a home in Denver.
Low interest rates make homes more affordable especially when you’re dealing with median home values above $500k. According to PayScale,
“Denver, Colorado’s cost of living is 12% higher than the national average.”
Rising inflation leads to rising costs of goods and services. As the economy’s purchasing power lessens, this makes it much more difficult for a potential home-buyer to afford a new house. As existing property owners benefit from higher inflation by hiking up their listing price, this makes it a much more difficult time to buy a home. The U.S. has a history of raising interest rates in order to combat rising inflation.
Between January 2021 and January 2022, U.S. inflation grew 7.5%, according to U.S. Bureau of Labor Statistics. When you add inflation on top of Denver’s high cost of living, home affordability may get worse before it gets better.
How does supply and demand affect the housing market? When it comes to finding the right time to buy a home, the current supply of homes on the market is quite influential. The more available homes on the market means less competition which in turn can lead to a smoother home-buying experience. A low supply of homes can make it more difficult to find the right and you’ll also be competing with others who may submit higher offers than yours (or other offers favorable to a seller, such as a paying with cash).
According to the Denver Metro Association of Realtors, at the close of 2021, only 1,477 homes available on the market. At the end of 2020, there were 2,541 homes available and over 5,000 at the end of 2019. If this trend continues, it will become even harder to buy a new home in Denver.
The demand for new homes in Denver has increased substantially over recent years. As demand increases, so do sale prices. To make things even more challenging, many home-buyers add incentives for the sellers such as cash offers. If demand were to decrease significantly, you may want to consider waiting for the winter months when the market has been known to turn to favor buyers.
Other Home-buying Affordability Factors to Consider
- School Schedules
- Global Conflict
- Future Climate
- Down Payment
- Closing Costs
- Your Personal Financial Situation
Denver is a coveted city and home to many transplants from all over the world. The unique culture, climate, and landscapes make Colorado one of the best places to live in the United States. When considering all of the factors above, and if trends continue on the same trajectory, the best time to buy a home in Denver is right now.
It’s the Best Time to Buy a Home in Denver
If you aren’t expecting your household income to grow this year, then now’s the time. Single-family homes are selling at upwards of $600k this year for many central neighborhoods in Denver. There are many different assistance programs that can help you qualify and afford a new home in Denver, such as Denver Metro DPA. Colorado Housing and Finance Authority provides some incredible resources to potential home-buyers, such as CHFA Smart Step. Learn about the pros and cons of FHA vs Conventional loans by talking to mortgage loan officer today.
It’s Easy to Get Started Now
Not sure where to begin? As a long-time Denver resident herself, Jackie Gonzales — a senior loan officer at Guild Mortgage Colorado – is a certified mortgage banker who can answer any questions you may have. She also teaches First Time Homebuyer classes in Denver (a required class for all new home-buyers to complete). Get started today by taking the first step toward finding a great Denver home.