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If you were looking to buy a house in Denver over the past couple of years and didn’t have the cash flow of, say, a neurosurgeon, you were likely priced out. With the city—and the world—in a virus-induced panic, interest rates dropped, sales prices soared, and unless buyers could pay thousands over the asking price in cash, securing the keys to the Highland bungalow of their dreams was nearly impossible. Over the past 10 months, though, the landscape has been evolving, and the market has returned to what many real estate agents are cautiously calling pre-pandemic conditions. Interest rates are ever fluctuating (causing hesitation among some buyers); sellers are being forced to lower their asking prices; and homes aren’t being snapped up with abandon. “Most sellers were seeing six to 12 offers on their homes during the height of the pandemic; now, they’re seeing three to four at most, and homes are just sitting on the market longer,” says Colin Whitenack, a broker associate with real estate brokerage Compass. “This has opened up opportunities for people like first-time homebuyers, who have lower down payments.” Still, navigating the current real estate market is tricky, especially when it seems like the status quo is shaky and bank failures are making everyone circumspect. That’s why we’ve taken a hard-numbers look at the scene so you can know whether it’s time to buy or sell—or stay right where you are.
By the Numbers
- Active Listings* 450
- Median Sales Price* $605,250
- DOM** (Feb ‘21): 21
- DOM (Feb ‘22): 13
- DOM (Feb ‘23): 43
- Active Listings: 358
- Median Sales Price: $517,500
- DOM (Feb ‘21): 14
- DOM (Feb ‘22): 11
- DOM (Feb ‘23): 48
- Active Listings: 50
- Median Sales Price: $652,500
- DOM (Feb ‘21): 4
- DOM (Feb ‘22): 6
- DOM (Feb ‘23): 54
- Active Listings: 133
- Median Sales Price: $557,450
- DOM (Feb ‘21): 12
- DOM (Feb ‘22): 13
- DOM (Feb ‘23): 52
Cherry Hills Village
- Active Listings: 8
- Median Sales Price: $3,991,750
- DOM (Feb ‘21): 66
- DOM (Feb ‘22): 8
- DOM (Feb ‘23): 72
*In February 2023
**Average days on market
Source: Denver Metro Association of Realtors
6.5%: Average rate for a 30-year fixed mortgage as of February
That number is waaaay up from a record low of 2.67 percent in December 2020, but rates could dip later this year. “Get into an adjustable-rate mortgage while housing prices are low and refinance later,” advises Anna Centron, a broker associate with the Denver office of brokerage group the Agency. “If you’re waiting for record low rates, your purchase price is going to be higher than what that interest would have done to you.”
Mile-High Living: Repair, Replace, Renew
Rae Barber and her husband, Jimmy, sold their East Colfax home and then zeroed in on a fixer-upper in Lakewood.
“I’m a real estate photographer in the area and have worked with a local agent to capture the homes he’s listed. When I saw what he did to clean up a house and how much time and effort he put into listing a home behind the scenes, I knew I wanted to work with him when we decided to sell our home.
We started in February 2022, and following our agent’s instructions, we painted most of the walls, moved out and had it staged, and had it photographed by an artistic photographer. We were able to get our ranch-style home ready to list just in time for last spring’s crazy-hot market. The house was listed in March, and we had, like, 75 showings and a ton of offers; it was incredible. We got a few high offers that we never dreamed of getting, so after accepting one we were able to bide our time in looking for a new home. We ended up renting for a few months because the market was so competitive. We put offers down on two houses that weren’t accepted, so we took a step back. Then, in June, we found an awesome ’70s house on the west side of town with so much more room for our two kids. We’re just lucky the market died down a little by then, or I don’t think we could’ve made this happen. The house was definitely more reasonably priced in the cooler market. We were actually in California when our agent found the house for us, and his team gave us a FaceTime tour, so I guess you could say we bought it sight unseen. Jimmy flew out the day after our offer was accepted, and we officially moved in this past August. We’ve spent the past seven months renovating, and we’re almost done.” —as told to BU
When mortgage rates soared halfway through 2022 and buyers dropped out of the market, sellers were forced to make tough decisions.
Judging 2022’s real estate market as a whole is a knotty proposition, especially considering how antithetical the first half of the year was compared with the second. While mortgage rates began 2022 on a steady climb, in late spring they surged and potential buyers got squeamish. “I had a listing the week before Easter, and the number of showings just dramatically dropped off,” says Colleen Covell, a broker with Denver’s MileHiModern. That shift led to a steady decrease in the median sales price, resulting in a market that’s more buyer-friendly. “In the first half of the year, I had clients who had to bid $350,000 over ask in cash,” Covell says. “In the fall, I got a client who was a twentysomething first-time homebuyer under contract for $440,000 under ask. It was just so diametrically different.”
Still, the market has historically been seasonal, and while median close prices have been trending upward again in the first part of 2023, local experts expect competition to increase rapidly beginning this month. For sellers, that means they should list their homes as soon as possible, according to Andrew Abrams, broker and owner of Denver-based Guide Real Estate. But sellers need to be strategic: If you’re already locked into a low interest rate in your current abode, you can expect to pay a higher mortgage rate on your next home, which may or may not be a concern, depending on whether you sell your current home at a profit. “Selling right now is fine to get the equity out of your house,” Abrams says. “But you still have to think of the next step, which is, ‘Where are you going?’ ”
A 2020 study by the National Community Reinvestment Coalition reported that Denver was the second-most-gentrifying city in the United States from 2013 to 2017. As a veteran real estate agent and president of Denver Public Schools’ Board of Education, Xóchitl “Sochi” Gaytán has witnessed the displacement firsthand—which is why we asked her to explain how gentrification is affecting the city and its schools.
5280: Who is most impacted by gentrification?
Xóchitl Gaytán: At the height of Denver’s gentrification, we were seeing older folks in historical neighborhoods selling their homes to make some cash for retirement. [They and their adult children] would then look to buy but could only afford homes farther north or east into Aurora, Westminster, Broomfield, and beyond. This essentially dissolved so many communities of color [within Denver proper]. Now, I’m seeing [those same] families who can’t afford their [new] neighborhoods moving toward southwestern Denver. It’s what I call the slow creep of gentrification. Lower-income families are being pushed around the metro area depending on which areas are hot spots.
Why did you decide to run for the Board of Education?
As a bilingual Latina woman, I attracted a large client base of Latinos. I’ve also lived in Denver nearly my entire life and have lived for 20 years in Harvey Park, where I raised two boys. I saw what gentrification was doing to my clients and my neighbors, and I saw what reform policies in education were doing to Denver Public Schools. I eventually ran for the Board of Education to try and create change at a higher level. Housing, poverty, and reform policies in education are all interconnected and are negatively affecting our communities of color.
What does education have to do with gentrification?
Education reformers made an effort to go after southwest and northeast Denver, where communities of color predominantly lived. In my district, we saw our neighborhood schools become charter schools over the last 15 years. That led to lower attendance at public schools—and, so, fewer resources, because funding is dependent on the number of students enrolled in a school. Plus, charter schools usually market themselves better. Public schools heavily influence where people decide to live, and driving them out can drive out working families.
What needs to be done to combat gentrification?
I’m not against development, but I do think we need to consider smart development where we’re considerate of people of all backgrounds. We need to create housing for our unhoused communities, low-income housing, and housing assistance for all buyers. I’m grateful we have the Colorado Housing and Finance Authority, but I think legislators should work on assistance options and rent stabilization protections for low-income earners and working families so that they can build generational wealth.
Mile-High Living: A Lessee’s Woes
If buying a home is tough, renting should be a breeze, right? (Right?!)
Thirteen-year-old me would’ve imagined that, as an adult, I would be living in one of those high-end lofts by Union Station. This past summer, however, 23-year-old me found myself living in my mother’s basement. In a desperate attempt to escape that sorry situation (and the spiders I kept finding in my sheets), I spent my days refreshing property management websites for something, anything, within my budget. When a two-bedroom, 1,000-square-foot apartment priced at $1,300 appeared, I applied immediately. Because the University-area unit was listed by one of the largest property management companies in the metro area, I trusted the process would go smoothly if I actually got the place. An acceptance letter and a signed lease later, my Pinterest board became cluttered with apartment design inspo. But 10 days before my move-in date, I received a phone call. “Sorry about this,” the leasing agent said, “but someone else actually signed a lease weeks before you did, and we just found it. How about another unit in the building for $1,600 instead?” Unless I wanted to go without electricity or internet, I couldn’t swing an extra $300 a month. I was crushed—and crawled back into bed with the spiders and hit refresh on my computer. I found another option shortly thereafter right across the street, but I had to settle for nearly half the square footage and in-building laundry machines that somehow are always out of order. Maybe one day I’ll call that LoDo loft my own, but until then, I’ll be in my humble, 500-square-foot, $1,400 abode with a weird smell I can’t find the source of. —BU
Mile-High Living: Stretched Thin
Marissa Morrison has a good job with a stable income—but renting in Denver’s ridiculously expensive apartment market is still far from easy.
“I moved to Denver from Florida in April 2021 and found a dream apartment in Englewood for $1,500 per month. When time came to renew my lease last January, my rent was increased to $1,630. An extra $130 a month doesn’t seem like a lot, but I definitely had to start working more in those first few months of living under my new lease to make sure I could do it. I realized I was living below my means, so by cutting some unnecessary expenses, I was able to make it work. This past January, my rent got increased again by another $100. There was really not much I could do, as I realized that other apartments in the area were going for even more money, so I was ready to re-sign. I ended up getting really lucky because I realized my complex was offering a top floor unit, with the same layout and square footage, for cheaper than what they wanted me to re-sign for. I ended up signing a lease in that unit and am moving upstairs. I like this building, and I like Englewood, so I’m glad the rental market is starting to die down a bit so I can afford it here. Still, this is probably my last year in Denver. Florida’s rental rates are about the same as Colorado’s, but I am not a cold-loving gal.”—as told to BU
All signs point to a drop in rental rates. That is, until a new city policy changes everything.
Unless a $2,000-per-month Cracker Jack box is just what you’ve been looking for, finding a livable (read: reasonably clean), affordable apartment in Denver is nothing short of a soul-sucking experience. Rental prices surged nearly 18 percent from 2017 to 2022, according to a report by national rental company Apartment List, making the metro’s median rent around $1,700 for a one-bedroom apartment.
But while the Mile High City has been pricey for years, Scott Rathbun says we’ve reached a turning point. Rathbun, who is the president of Denver-based firm Apartment Appraisers and Consultants, explains that although you can still expect to see ridiculously expensive studios, rent growth slowed considerably by the end of 2022.
Why? The reason is twofold: Colorado’s once-skyrocketing population growth is slowing, leading to less demand for rental units, and developers who scrambled to answer demand from a few years ago are only now finishing construction on apartment buildings we no longer have enough renters to fill.
Still, a policy approved by the Denver City Council last year could flip the trend. The Expanding Housing Affordability policy, which passed in June 2022 and took effect immediately, requires all new developments larger than 10 units to designate at least eight to 12 percent of their units as affordable. To qualify, prospective lessees cannot make more than 60 percent of Denver’s median income, which is around $49,000 for a one-person household. Experts like Drew Hamrick, general counsel for the Apartment Association of Metro Denver, think the current parameters don’t benefit all Denverites in need of housing, like teachers and firefighters, who can’t afford Denver’s median rent but make more than 60 percent of the median income. (The policy does include an opt-out fee for developers, with funds benefiting more affordable housing options.)
While the city is handing out a few incentives to building owners, such as flexible parking requirements, Rathbun says it’s not enough. “Don’t get me wrong, I’m all for affordable housing,” Rathbun says. “But the ordinance is all stick and no carrot. In order to subsidize those below-market rents, [landlords] would have to charge other renters above-market rents to offset the costs.” This could mean that the modest reprieve Denver renters are expecting could vanish before it ever fully arrives.
First-Timer Buyer’s Guide
Navigating the ever-changing real estate market is confusing for everyone, but it’s especially so if you’re a rookie homebuyer. That’s why we asked industry experts for their top three tips for newbies.
Look for Down-Payment Assistance
Many down-payment assistance programs are available for first-time homebuyers, says Brian Murphy, manager of Front Range Mortgage. Other than Federal Housing Administration (FHA) loans, which allow for lower credit scores and down payments, the Colorado Housing and Finance Authority offers grants for up to three percent of your mortgage. Plus, each city and county you’re looking to buy in likely offers programs of their own. Visit the U.S. Department of Housing and Urban Development’s website for more information.
Shop Around for Lenders
Don’t stick with the first rate quote you get from a lender. It pays to look at multiple options, says Susan Thayer, real estate agent and co-owner of the Thayer Group. In fact, according to a February study by Freddie Mac, borrowers who got two rate quotes saved $600 annually, and those who put in the work to get more than four rate quotes saved around $1,200 on average.
Don’t Stretch Your Budget Too Thin
Over the past 20 years, Fannie Mae and Freddie Mac have approved loans of 40 percent or more of a buyer’s income. Still, Murphy recommends evaluating what you can comfortably afford, with input from financial professionals. That might mean skipping that dream house that’s out of your budget. “We’re not our parents, and we no longer have to stay in our first home forever,” the Agency’s Anna Centron says. “Make money on this first property so you can move up to the next price range.”
Mile-High Living: Home Sweet Home (For Now)
Emily Bath and Trevor Bain just bought their first home in Denver’s Sunnyside neighborhood, and the current market delivered some pleasant surprises.
“We’ve been renting for the past five years and were just over living in an apartment. We started looking to buy last October and knew nothing about the market. Luckily, we have a good friend who’s in real estate. We decided to start searching about six months before our lease ended, because we had heard how difficult it could be. It was important for us to still be near our jobs downtown, and when you’re looking that close to Denver, it can be tough to find inventory within your budget. Our budget was around $750,000. With the market slowing down toward the end of 2022 and into 2023, we actually ended up finding our home a lot quicker than we thought we would. Thankfully, we never ran into those stories you hear about having to fight 10 other offers; there just wasn’t much buyer competition out there. Interest rates were definitely volatile for a while, and the rate actually went up during our closing process. But we realized how important it is to set a budget and look more at your monthly payment rather than just the close price. I’m really happy with our new home in Sunnyside, even if we consider it a starter home. I can see us being here for the next 10 years at least. If we ever decide to have a family, it gives us room to grow into it. That was important to us; we didn’t want something we could only live in for five years before having to do this all over again. We’re in a good spot.” —as told to BU
4 Things Sellers Should Know
If you missed the buying frenzy of early 2022, don’t panic. We’ve enlisted the pros to help you know what to do before your house hits the market.
1. Time It Right
Predicting the future of the real estate market ain’t easy, but Guide Real Estate’s Andrew Abrams says he expects the market to slow way down in late summer this year. “Things generally start slowing down as people prepare for their kids to go back to school,” Abrams says. “May and June are the ideal months to sell a home.” Translation: If your home isn’t already on the market, you need to hustle up.
2. Emotionally Detach
Selling your home can be as painful as saying goodbye to your first car, the Thayer Group’s Susan Thayer says. But you need to stow away those treasured memories of your little one taking her first steps in the living room, because it will make the process of selling easier—on everyone. “Say you’re showing your home, and someone doesn’t like the kitchen,” Thayer says. “Try not to be offended but instead look at how to make your home more appealing to buyers.” That might mean painting over the spot where you charted, in pencil, how tall your kids were getting or replacing those light fixtures you and your SO installed yourselves.
3. Price Accordingly
Don’t waste time pricing your home ridiculously high in the hopes that a naive buyer will forget it’s no longer 2021 and throw a huge offer at you. “Your agent should pull comparable homes that were sold in the last 90 days in your area,” says Jason Cummings, a broker associate with Compass, “and price your home based on numbers.” That means trying to place a price tag in the median of comparable homes—you don’t want it to be a steal, but don’t try to set any records either.
4. Market Wisely
It’s the 21st century, so homebuyers are searching sites like Zillow and scrolling through social media to find their next homes. They aren’t often driving by your bungalow and picking up the flyer from your “For Sale” sign. That’s why Cummings says you should make sure your agent is social media savvy and understands things like marketing (printing out flyers isn’t enough), photography (no, your iPhone photos won’t cut it), and staging (this means more than just making your bed).
Buyers haven’t been able to catch a break in Denver’s relentless market for years, and we’ve had enough. Forgive us if we’re salty. —Lindsey B. King
Times have changed. We know you thought you’d have five above-asking-price offers before the for-sale sign even hit your yard. We know you’d already spent that cash windfall in your heads. And we understand that the whole thing feels like whiplash. After all, how can the local real estate landscape have changed from what seemed like an hours-on-the-market sensibility in 2021 to a reality where Mile-High homeowners are waiting, on average, 43 days to get solid offers on their listings in 2023?
Honestly, though, it’s a little difficult to feel sorry for you. OK, it’s impossible to feel sorry for you. Especially because you seemed to relish the position you were mostly just lucky to be in. Yet you bilked us. You wouldn’t make concessions, saying ridiculous things like, “So what if the AC unit is from 1995?” You forced us to waive inspections on homes with wiring that dated to the Truman Administration. You smirked a greedy smirk and tapped your fingers together when the bidding wars began.
Well, the situation has evolved, and local real estate agents say that, for the time being, we have all of the choices right now. And, maybe even more importantly, we have time—something there was so little of in 2021 and early 2022. Time to think; time to shop around; and time to make you sweat. That’s right: We might actually love your Baker neighborhood Tudor, but that bungalow in Rosedale isn’t bad, either, so…we’re not going to do what you all think we’re going to do, which is freak out and make some silly sky-high offer that literally mortgages away our futures. Nope, your house may sit on the market for a month or even two. You might have to settle for (gasp!) asking price. And, what’s this? Oh, yeah. This is a loan. Sorry, we didn’t have cash on us.
P.S. Yes, we know: We would’ve done the exact same things you did if we’d been in your position.