It’s no secret that Denver home sales are through the roof at the moment. There is very little inventory and buyers have to move quickly and be willing to submit an offer that could be higher than the list price in order to get the home they want (because there’s a good chance five others want it, too). But what’s going on in the rest of the country?
Home sales rose steadily in 2012 and 2013, then remained stable in 2014 (the average home only increased in value about 3%). We already know that sales in Denver will increase about 14% this year, but for the rest of the country it could mean increased home values and sales, as well.
Zillow continually reminds us that the rental markets are getting more expensive and buyers are itching to get into their homes. This is actually great for buyers because Fannie Mae and Freddie Mac are now offering programs in 2015 that will help new buyers get into their homes more easily. In the past, if you didn’t put down 20%, you were subject to an FHA loan with a decent mortgage insurance payment on top of your mortgage payment. Now, they’re going to start offering programs that will allow buyers to put down as little as 3%, still with mortgage insurance, but much cheaper than the typical FHA mortgage insurance payment.
According to the National Association of Realtors, first-time buyers represent the smallest number of homebuyers these days. So on the one hand, we have rents going up, and on the other hand we have mortgages with mortgage insurance that are too expensive for people without a huge amount of cash because they’re renting… You can see why first-time buyers are so frustrated by the current situation. Rates are especially low now, although they’re rising just a little bit as the year progresses. They’re around 4% currently, but experts expect them to go up to 5%, which is considered a huge increase. They say that if this happens, the real estate market will slow down significantly.
For cities like Denver, with our rapid amount of growth in and around the city, we know that buyers are waiting in the wings to find a home. Denver’s suburbs are growing significantly, as well. Westword did a study about the fastest growing suburbs around Denver, and it’s no surprise it listed Littleton, Aurora, Northglenn and Wheat Ridge. The suburbs around Colorado Springs are also growing: Fountain has a projected growth of about 17%!
So if you’re in the market for either a first home or a move to a second home, know that this is going to be a great year for a move. It’s a great time to sell right now, but not so great if you’re trying to find a replacement home; however, that will change. We can definitely conclude that Denver is, and will continue to be, an amazing market for buying and selling as 2015 progresses.