I’ve been working with a lot of clients who are feeling the pressure to move in Denver right now. Families from across the country and across the Denver metro area are starting to feel the sense of urgency to pull the trigger and buy a home caused by a variety of factors. Well, I’m very conditioned to not respond to people trying to build a false sense of urgency when I’m trying to make a big decision or helping a client make one of the biggest decisions of their lives. Nevertheless, in today’s very volatile real estate market there is some prudence in responding to these factors. Here’s a quick summary of the top 3 reasons people 
have been getting off the fence and buying Denver real estate:
1.) The $8,000 First Time Home Buyers Tax Credit is expiring on December 1, 2009.
This tax credit is a windfall for First Time Home Buyers- and anyone who hasn’t been on the title of real estate in the last three years. What’s better than free money? Many of my clients are taking advantage of this offer and more and more are recognizing that it might not get extended after December 1. No big deal right? There is plenty of time to buy and close before the incentive expires… UNLESS you are considering one of the hundreds of short sales on the market right now! Short sales almost invariably take 3-6 months to close. Since the majority of homes in Aurora, and a large chunk of options in Highlands Ranch, Conifer, Evergreen, Parker and Centennial between $150,000 and $300,000 are short sales or bank owned it makes good sense to get the ball rolling and submit some offers now in order to accommodate the very long process of getting the deal done. There a hundreds of great deals on homes for sale that will be short sales. In fact, if you click on the title of this post you’ll notice the map of Denver homes for sale in the top right corner changes–I’ve customized it to include any homes with the keywrods: short sale and pre-foreclosure. Today there were 1,300+ options! If you click a green home-icon you’ll launch a full page search of all Denver homes for sale which you can use at your discretion.
2.) Mortgage Interest Rates Are Climbing
Although rates are remarkably low right now there seems to be a lot of upward pressure on rates as instability in the economy, both perceived and real, causes strife. Many people feel that interest rates have been held artificially lower than they should be in order to further stimulate real estate activity. I’m all for that! And if you are a home Buyer or Seller I bet you are too. Unfortunately, this is most likely short lived. As interest rates go up, so do monthly payments. As monthly payments go up affordability comes down. Or alternatively, the quality of the home you can afford gets lower. In the last few days mortgage rates have been climbing and the average is about 5.5%. Still well below historic averages, but considerably higher than the low 4% rates for thirty year fixed rates we were seeing in April. Compare today’s economic conditions with those of the last, biggest recession in the 1970’s and it doesn’t take a rocket scientist to guess which way rates are going. Imagine, calling your mortgage broker and feeling good about locking in your rate at 12%(!).
3.) Winter/School is coming quick
The vast majority of real estate transactions occur in the summer and fall. Sellers are very motivated to make their best deals before the snow flies and the kids are enrolled in school. Nuff said.
All in all, it is a terrific time to buy a home in Denver—or anywhere else for that matter. If you haven’t started your search yet. Take a look at our state of the art Denver home search at Denver Home Search.
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Keep in mind, though, buyers are in for a surprise when looking for a sub-$250k house. I don’t have any juicy statistics at my finger tips, but I have been reading how that price point has been moving very quickly and we’ve even seen upward pricing pressure! The expectation from buyers is that it’s a buyer’s market, but having just sold a house and seeing our neighbor sell hers quickly (both were under contract in four days-over a holiday weekend-and then sold 3.5 weeks later), buyers might be surprised when sellers aren’t falling over themselves to do a deal.
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