As published in DMAR Market Trends, November 2023

Many new builds have incredible year-end incentives such as permanent rate buydowns, all appliances and landscaping included packages.

Buyers are enjoying increased inventory and have become more demanding during inspections. Sellers planning to list their homes this winter may benefit from obtaining a pre-inspection report to address necessary repairs in advance which can help put potential buyer objections into perspective.

During the first three quarters of 2023, new housing permits decreased 22.1% compared to 2022. Fewer than 16,000 permits have been approved through the end of September, down from more than 20,000 last year.

Colorado has the four most expensive U.S. cities that aren’t on a coast, with Boulder leading followed by Denver, Fort Collins and Greeley.

Proposition HH is a hot item on the upcoming November 6^th ballot with the Colorado Association of Realtors® opposing it due to concerns about reducing property taxes and future TABOR funds.

Downtown commercial office space vacancy has hit 30% for the first time in decades, with vacancy rates surpassing 20% in the first quarter of 2021 due to the pandemic.

Evictions are on the rise in Denver as pandemic assistance comes to an end, with a projected rate of more than 12,000 eviction filings by year’s end—the highest since 2008.

Despite a surge in construction, Colorado is short over 100,000 housing units and affordable housing options remain limited.

The General Assembly allocated $1.1 million to Colorado’s Low-Income Radon Mitigation Assistance (LIRMA) Program for the 2023-2024 fiscal year, providing financial aid for homeowners to mitigate radon with income-qualified homes.

New home sales soared nationally in September, up 33.9% from last year.

While shares in homebuilder stocks have dropped 16% since September, builders are still outperforming the broader S&P 500 market, with an 18% increase this year.

Goldman Sachs forecasts a 1.3% appreciation nationwide for 2024, along with a drop in closed transactions from 4 million to 3.8 million as interest rates remain at or above 6.8%.

Work-from-home rates have returned to pre-pandemic levels, with fewer than 26% of American households having someone work from home at least one day per week. The peak of 2021 saw 37% of households.

In an effort to create more affordable housing, the White House and U.S. Department of Housing and Urban Development (HUD) announced a new initiative to encourage the conversion of commercial properties into residential units, with $10 billion in funding allocated for this purpose.

Bank regulators made changes to the Community Reinvestment Act, instituted in 1977, to address the legacy of redlining and require banks to make more mortgages in lower-income areas. This update was the first to the law since 1995.

A report from Up for Growth notes that a surge in apartment and home construction in metro Denver combined with slower population growth is chipping away at the state’s housing deficit during the pandemic.

MORTGAGE NEWS

With a 20% down payment on today’s median home price and a 7.98% mortgage rate, mortgage payments have increased by 130% compared to January 2020. However, the average wage in Denver has only increased by 24% during the same period.