Denver and Colorado in general have long been a popular place to live. From our sunny days to access to the beautiful Rocky Mountains to world-class education and work opportunities, it’s no wonder so many want to call the Mile High City their home. Unfortunately, it has become extremely difficult for many to own a single family home in recent years. We asked our award-winning mortgage team about the 2021 Denver home purchase market and their tips for home hunters.
What factors are influencing the Denver real estate market?
- low inventory stock – At the time of this writing, there are fewer than 20 single-family homes for sale in Denver under $ 400,000. This shortage of single-family homes in Denver (especially for first-time buyers) is caused by a number of factors, including the coronavirus pandemic and low inventory levels. Because of the pandemic, fewer people are willing to list their homes and have open houses with strangers in their homes. Due to low inventory levels, many owners do not want to list as it would be difficult to find another home if planning to stay in the Denver area.
- Cash buyers – Many buyers come to Colorado and escape more populated states like New York and California. These buyers who have sold in expensive markets are more likely to offer cash to buy than to fund their purchase. While this was common in the past, it continued to increase in 2020 as more people were able to work remotely due to the pandemic.
- Assessment gaps – This is the difference between the agreed price and the estimated value of a home. For example, a home is listed for $ 100,000 and 14 bids are received. One offer is made for $ 110,000 and that offer is accepted. If the valuation of the property is only $ 100,000, the buyer would have to pay that $ 10,000 valuation gap in addition to the down payment upon completion. Currently, nearly 90% of contracts in the Denver market have valuation gaps.
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Is there inventory anywhere in Colorado?
For the most part, this pattern of low inventory and a seller’s market is nationwide. It appears to be most common in Denver, Boulder, Colorado Springs, and Fort Collins. While single-family homes across the state can be difficult to find and buy, there are some good stocks of condominiums. If a buyer has more flexibility in terms of their timeline, they may want to consider a new build as well. Shortly before summer, the number of single-family homes across the Front Range could improve.
What tips do our homebuyer mortgage officers have?
The key to a good home purchase is having a team support you and training throughout the process. A real estate agent and mortgage lender you trust gives you peace of mind in a challenging process. The first step that you as a buyer should take is knowing where you are financially before looking at a home. Your mortgage lender can help you understand what you qualify for before contacting a real estate agent. They can describe all of the options that are available to you, from traditional mortgages to FHA loans and VA loans to anything else. Your mortgage loan officer can also refer you to a knowledgeable and responsive representative to make the process go smoothly for you.
Don’t be afraid to ask questions of your mortgage loan advisor and real estate agent. Buying a home can be a confusing process, so there is never a silly question. When looking for a lender, you are looking for more than just an interest rate. Find out about lenders and loan officers to make sure you can trust them with one of your most important investments.
Create Your Colorado Homebuying Plan.
You can call, face-to-face, or virtually arrange a no-obligation meeting with one of our expert mortgage loan increase officers to learn more about your options and create a plan that fits your financial goals.