Front Range Real Estate Market Update, February 16, 2023

Interest rates and inventory are two of the biggest drivers when it comes to home prices right now. Interest rates continue to be volatile; today, they are up to almost 7%. Rates changed rapidly and were 5.99% about two weeks ago. Historically, these kinds of swings are uncommon, but if we look at the past year, this kind of quick change in rates is something we’ve seen before.

Inventory is rising, too, but we still don’t have as many homes for sale as we did before the pandemic began. Nationally, 65.5% more homes were on the market in January 2023 than in January 2022. The increase in inventory was even more pronounced here, where we saw almost twice as many homes for sale this January compared to last January. In January 2020, before the pandemic began, there were 7,412 homes for sale versus 4,867 the previous month.

Rising inventory and higher interest rates have sidelined some buyers and put downward pressure on home prices. Many sellers are also sitting on the sidelines, though. Sellers want to avoid taking on a new mortgage with a rate significantly higher than the one they have now, and they look at prices now compared to a year ago and feel they should have sold back then.

The truth is prices are equal to or higher than they were a year ago in most neighborhoods. Buyer demand is still strong despite the higher interest rates, and few homes are on the market. If you want to sell and price and prepare your home well, you will likely get multiple offers and sell quickly. If, on the other hand, you do not prepare your home as well as you should and you price it too high, it will linger on the market as you chase buyers with price reductions. Be prepared to negotiate with buyers. We’ve had multiple buyers negotiate ra