DENVER (CBS4)– After a year of record home price increases in the Denver metro area, sellers are feeling pressure to lower prices.
According to Colorado Association of Realtors. Median home price data shows dramatic spikes from 2021 to 2022:
ZIP Code 80011 – $399,500 to $484,000
ZIP Code 80013 – $450,000 to $550,000
ZIP Code 80015 – $502,500 to $632,000
But sellers looking to cash in on that appreciation now face competition, said Aurora Realtor Sunny Banka of Sunny Homes and Associates.
“Things are starting to balance out a bit, so you have to be a bit more realistic.”
Banka advised sellers Dale and Loretta Lindsey to lower the asking price for their ranch-style home from $20,000 to $575,000 after just a few weeks on the market.
Banka said: “We are seeing some price reductions in certain price ranges and in certain areas, and a lot of that is due to the increase in interest rates – which is exactly what the intention to increase interest rates was to do. It was to help slow the market down.
After 28 years in their home, rising prices played a part in the Lindseys’ decision to leave Colorado to retire. Dale Lindsey said: “I wanted to go somewhere where it was cheaper to live. So we started looking and ended up here in Missouri.
Now that the Lindseys have some advice for other salespeople, Loretta said, “Don’t wait. If you want to do it, do it now. We wondered if we could have put it on the market two weeks or even a week faster than what we did, it would have been sold.
Banka says buyers and sellers looking to move should act as soon as possible as interest rates are expected to continue to rise, “It is important to note that for every $100 a buyer’s payment increases, he needs about $300 or $400 to qualify for that extra $100 payment increase, so that’s a big deal.
“In our 43-year career in real estate, this is not the first time that we have seen house prices rise to this level. Major price increases occurred in the 1980s, late 1990s and 2012. As with all other goods that increase, we may see a decrease, but it is very rare that these price decreases go back down there where they were. A simple way to describe the housing market is to take three steps forward and maybe one step back. Housing has always proven to be a good long-term investment, regardless of the interest rate,” Banka said.
As of April 26, there were 300 active registrations in Aurora. Banka added: “So we still have a shortage of inventory, we just don’t see inventory being absorbed as quickly as it was about a month ago. It’s a good opportunity for buyers. They probably won’t be in a bidding war. This opens the possibility of entering a house.