DENVER — The pendulum is swinging in the Denver metro housing market, now favoring buyers more than it has the past two years.
Inventory is up 17% from this time last year, and houses stayed on the market an average of 25 days in August, according to the Denver Metro Association of Realtors (DMAR).
It’s now sellers who are trying to sweeten the pot for buyers.
The market is forcing buyers and sellers to get creative in an effort to combat rising interest rates.
“I think it’s healthy,” said Kelly Fogel with HDS Mortgage.
“It’s not quite a buyer’s market yet, but it is balancing out,” said Joy Dysart with HomeSmart Realty.
The market has certainly been rough for buyers.
“Good luck getting in,” said life-long Five Points resident Dennis Hilliard. “Even the dog’s got to have a job.”
“I would die to be a homeowner,” said 26-year-old Heather Blanchet who waits tables in Five Points and has been waiting for a market shift. “I’ve always dreamed of owning a home.”
While she’s happy things are leveling off, the problem for her and buyers like her now — skyrocketing interest rates.
“Getting a loan, I feel like that is increasingly hard,” Blanchet said. “The interest rates are crazy, and buying a home, in general, is just so intimidating.”
But Dysart and Fogel say buyers have some new options, including asking for seller concessions, which can help buy down interest rates.
“I think we are entering a market where sellers are working with buyers,” Fogel said. “And that’s great when people are negotiating again.”
Here’s how it works — let’s say a buyer is paying $500,000 for a home. They come in with a full-price offer, but then ask the seller for a $6,000 concession, essentially cash back at close. At the closing table, that cash goes straight to the lender to buy down the interest rate from an estimated 5.2% to 4.75% or so.
“That $6,000 concession might save them $250 a month,” Fogel said. “If they get a $12,000 concession, they might save $350 to $400 a month on their mortgage payment.”
“This is an opportunity for them to reduce their payments, which is very important to buyers,” Dysart said. “It’s their monthly payment.”
Seller concessions were unheard of six months ago. Now, they are very much part of the homebuying equation in metro Denver and Colorado.
“Sellers are now willing to work with buyers to make the deal close,” Fogel said.
“It motivates the buyers,” Dysart said. “There’s still people out there that need to sell their house.”
It’s certainly intriguing to Blanchet.
“That would be super enticing,” Blanchet said.