Rising mortgage rates, slowing appreciation + waking up from a dream
I’m not the only one who thinks that the 2019 Denver real estate market will be hot. Zillow, for example, named Denver among its hottest 2019 markets.
Other sources including realtor.com and the Denver Metro Association of Realtors (DMAR) have also made predictions, each showing Denver real estate will stay hot through this year. After surveying the field and digesting the outlooks, I wanted to lay out what they mean for sellers, buyers and the 2019 Denver market as a whole.
Simply put, rising mortgage rates will play a greater part in affordability, slowing the market for sellers and financially impacting buyers. Home prices are expected to rise, but at a more modest rate than recent years. Inventory, remaining low, should rise slightly in 2019, more so in the luxury market than others.
Realtor.com predicts that mortgage rates will hit 5.5 percent by the end of 2019 — while still low, this would be the highest interest rate on a 30-year mortgage since the 2008 recession.
In real money, this means owning a home will cost 8 percent more per month by the end of the year than in 2018.
Slated to take over the majority of home buying in 2019, millennials will account for 45 percent of mortgages. A 5.5 percent mortgage rate would be the highest this generation of buyers has ever seen.
2019 home prices are expected to rise by 2.2 percent nationally, according to realtor.com.
Good news — Denver is still predicted to lead the pack with 5 to 6.8 percent appreciation.
Zillow placed Denver third on its list of hottest markets in 2019. Great to see the Denver market stays strong. The draws of high-paying jobs and an all-time lifestyle keep buyers moving in, while sellers experience near perfect market conditions.
What to do
With the stats out there, what should buyers and sellers know before jumping into the 2019 market?
Sellers — Don’t anticipate the dream market that’s been the reality for several years now. Top dollar, quick close sales will not be the norm. Days on the market are expected to increase and buyers will be more particular.
Price your home to sell and give buyers the value they are looking for. Don’t let your home languish on the market.
Buyers — Think through how you will adapt to higher rates and rising prices. Speak with a loan officer, get pre-approved and be honest about your purchasing power and monthly costs. Take the time to figure out what matters most in your new home.
Also, consider looking at homes that have been on the market for over seven days. Avoid multiple competing offers, avoid driving up the price.
I know there is a lot to take in. I’d love to provide more guidance for your 2019 real estate needs. Schedule a call and we can chat!