Home Value & Interest Rates!

Right now, there is so much confusion and misinformation around home values and interest rates and where they are both headed.  First off, if you ever have questions about the real estate or mortgage markets, or your unique personal situation…. please don’t read fear-based sensationalist headlines as your source, rather please call Your Friends in Real Estate to get the real inside scoop!  As a 22-year professional in real estate I read every economic article possible and have helped 100’s of buyers and sellers in every type of market environment. My promise to you is to share the simple, honest, and direct truth always. The intention of this article is to share my very best professional opinion.  

My Best Professional Opinion Today: 

From what I can see right now, home values in the Colorado Front Range area will appreciate mildly within the next year, likely 2-4% year over year appreciation, some areas even slightly more. However, in some communities where there is a significant number of new construction homes there could be some downward pressure on home values as builders are “playing to win” by offering incredible incentives. Incentives in price, terms, and upgraded standard features are making new builds look better than ever. Our office has been able to negotiate large cash incentives from builders that the home buyers can use to lower their interest rates by significant amounts, making the new build more affordable than expected. Again, this is not in all areas and not all builders, but an experienced agent can help you navigate this.

IF Interest Rates take a Downward Turn soon… 

Let me just say that interest rates are absolutely expected to turn downward, it is just uncertain if it will happen soon or a little later. When interest rates get low enough (around 6%) we fully expect another increase to home prices because the demand will skyrocket.  Currently, there is pent-up homebuyer demand lurking in the background. These homebuyers are waiting for interest rates to get low enough to act and pounce on buying a home, a second home, a move-up home, or an investment property.  Don’t underestimate the pent-up buyer demand!  This silent demand is real and the only thing holding these patient homebuyers off now is current interest rates and eventually the rates will drop to meet their threshold. 

IF Interest Rates Continue the Upward trend

…and they could, then we could finally see some downward pressure on many, but not all, home values.  Some homes and neighborhoods are in enough demand to ‘weather the storm’ of another rise of interest rates.  However, there are many homes and neighborhoods that are not ‘hot’ enough to weather that storm.  Upper end homes that have notable deferred maintenance are the homes that are most in jeopardy of losing some value. Homes in the median to below median price range and in all physical conditions are the most likely to hold their value due to affordability.    

Wrapping your head around the ever-changing market conditions is the work of a skilled professional real estate consultant, you don’t need to go it alone!

Call-text-email your Friends in Real Estate and let’s get a quick 10 minute discovery call on the books soon.