Metro Denver’s real estate agents anticipate the metro housing market will stabilize in 2023.
During the pandemic, office workers who no longer had to commute wanted more space to work from home. And that freedom, combined with low-interest rates, fueled a home-buying frenzy nationally.
In Denver, where home prices were already climbing, that demand made prices skyrocket as buyers offered thousands over the list price.
Higher interest rates combined with more available homes helped temper the market.
And real estate agents hope 2023 will continue to be calmer.
“We don’t expect as much volatility,” says Nick DiPasquale with West+Main.
Natalie Hengel with 8z is excited about the new year. “I feel like I’ve come up for air,” she says. “I think we’ll see buyers offer more realistic terms to buy and sellers who will set their prices to be realistic to sell.”
Colorado’s lifestyle and robust and diverse economy will continue to make it a popular housing destination, Hengel says.
Interest rates will drive market
Interest rates will continue to be a significant factor for home buyers in 2023.
DiPasquale says even if rates stabilize or decrease, they remain higher than a year ago and likely discourage some potential buyers even with more homes on the market.
Realtor Barry Willmarth agrees and worries the higher interest rates will discourage some move-up buyers and keep them in their current homes.
“We’re already seeing people who have been in their homes for three to five years who normally might think they want to move but are reluctant. How do they go from a 3 percent mortgage to a 6.5 percent one?”
Return to normal?
DiPasquale anticipates the market will become more like it was in 2019 rather than 2020-2021 and predicts buyers will become more aggressive after the holidays.
Kelly Hudson with Compass-Denver agrees and says buyers need help managing the changing market.
“The market will continue to evolve and as it does it will be really important to have a realtor who can be your partner, someone who lives and breathes the market.”
DiPasquale says service will be essential in 2023 and real estate agents need to provide their clients with knowledge, insights, and sound advice.
Willmarth fears the market this year could frustrate buyers and sellers as it becomes more balanced.
“I suspect we will have a harder time coming to a meeting of the minds,” he says. “We’re going to see a gap between what sellers are willing to sell for and what buyers are willing to pay.”
Managing that gap will be challenging for real estate agents and require skilled negotiators to close deals.
He also anticipates buyers will be pickier despite the continuing demand for homes.
“Price is key,” he says. “Last year, buyers were willing to buy anywhere. We’ll get back to the days where people won’t want to buy a house on a busy street.”
The news and editorial staffs of The Denver Post had no role in this post’s preparation.
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