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Friday, November 18, 2016

What Is Happening in the Denver Real Estate Market?

How is the Denver market doing? Now that the election is over, what will happen to interest rates? We have the answers in your November market update.

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Today we’re here with your November real estate market update. 

The number of detached single-family units for sale has decreased to 4,700, an 11% drop from the previous month. Attached single-family units are also down, dropping 8.5% to only 1,300 units for sale. 

On the other hand, the average sales price is up to $442,000 for detached single-family units and $288,000 for attached single-family units. 

There are 4,975 homes under contract right now. In order to reach a balanced market with six months of inventory, we need 29,000 active units. As you can see, we are incredibly short on inventory and demand is remarkably high. 

Interest rates will probably start to go up as early as December 2016.

Now, after the election, we got a ton of phone calls asking about rising interest rates. Many of the experts predict that we will start to see rates move up. We should see an initial rate hike in December, followed by another during the first quarter of 2017. There will probably be a few more rate increases next year as well. 

What does that mean to you? Keep this in mind: every 1% increase in interest rates means a 10% decrease in purchasing power for buyers. For example, let’s say you get approved for a mortgage with a 4% interest rate. Today, that means you can afford a $400,000 house. If rates go up to 5%, you would only be able to afford a $360,000 house. 

Interest rates are especially important if you’ve been considering buying or selling a home. You will have the best opportunity to capitalize on these historically low rates over the next six months. 

If you have any other questions about our current market or interest rates, give us a call or send us an email. We would be happy to help you!