Hey thanks so much for joining us
here on 9 News Plus I'm Chris Bianchi
and real estate inventory climbing
fast around the Denver area and
across the state and the country.
I know, I know, we've been waiting
for this for a little while,
but for a bit more on just a bit more
context about this spike in real estate
inventory in Denver and across the
state and also by the way a bit of
a top level overview about where the
real estate market sits at the moment,
we're now joined by Lane line,
our real estate guru.
Are also managing it,
who's also, by the way,
a managing broker at Coldwell
Banker Realty Line?
Thanks so much for joining us
here on 90 plus.
Hey Chris, thanks for having me on.
This is a topic that a lot of
people are focused on right now.
Everybody's interested in it myself
included full transparency, but lane.
Can you start by getting us an
idea about just how much inventory
has climbed lately across the
Denver area and also statewide?
And I think that that's what
is on top of mind right now.
Is it happened very very fast.
We saw some big changes.
In our real estate market
here in the Denver area,
and it really was kind of
the tale of two markets,
you know when we started off the year
we had very very different conditions.
Very tight inventory,
hardly anything could be found on the
market that created a lot of pressure,
a lot of buzz, a lot of people who were
writing offers a lot of competition,
brought the prices up.
Sellers were really banking 100,200
thousand over asking price in some parts
of our area and then June comes along.
And it it becomes an about phase.
And really what's behind it is the
interest rates and how they are
indirectly tied to our mortgage rates.
And so as interest rates were hiked,
hiked up by the Fed,
we saw the same thing happen with the banks.
When it comes to mortgage rates.
Of course it's all the response to inflation,
which we all know has gotten high.
So as the government tries
to bring that down,
increasing interest rates is
really 1 valve that they're using.
So what happened is we had a
market that was full of a lot of.
Urgency buyer demand moving very
quickly because the government had
warned us these rates are not going
to stay historically low forever.
They will be going up and so that's
what caused a lot of the demand,
particularly at the beginning
of this year and then all of a
sudden when the rates went up,
we all felt this like seismic shift
in our market and what that meant
was inventory started coming on,
started staying on a little bit longer.
Buyers who were still out in the
marketplace having a few more options.
Less competition houses that were
taking 20 offers in February,
March are now on the market one
to two weeks and sellers are kind
of wondering where everyone went.
But the reality is,
it just has kind of stabilized.
And that's a word that I like to use.
Normalized Chris.
A lot of people are talking about the
market cooling. And yes, it is changing.
It is cooling but but I will say that
I I kind of think of it as that oven
that you can heat up to 525 degrees.
That's hot.
And then you cool it to 3:25
or 375 to bake a cake.
It is cooling,
but it's still really effective
for baking cake,
so we're not in any kind of danger zone.
We don't have any indications of
a bubble bursting, but yes,
we're seeing more inventory,
and that is creating a lot of
conversation here in the metro area.
What's all fascinating?
It's a great overview and a great outlook.
How does what we're seeing in the
Denver area and statewide compared
to what's going on nationally?
Is it roughly on par or they're
big discrepancies between here
and the rest of the country?
Sure, we are seeing kind of
in general across the country.
This shift. Mortgage rates going up.
Inventory increasing a little bit,
not as many offers,
not as a high over the asking price,
it is just a reaction to what
is mainly the mortgage rates.
Now Colorado is a little bit unique.
We know that we have something special
here and we have a lot of people moving
here and that's what always keeps
Colorado and at the Denver Metro in
particular a little bit more afloat.
Even during down periods or shifting periods,
correcting periods,
even the Great Recession of 08 and 09.
And I want to preface by saying
we're not seeing any conditions that
remind us of that this time around.
However,
just like in that time Colorado tends
to perform a little bit better when it
comes to shifts and changes because we
have so many people wanting to live
here and continuing to move here.
I know the prices are up.
A lot of US locals are like what
happened to the good old days.
Things are a lot more expensive now,
but we have a lot of interest still
coming in and our President here
at Coldwell Banker has long said.
As long as people still want to live in.
Colorado our housing market will
stay intact and I very much agree,
and I think we're seeing that,
so I think the conditions are are
being felt across the country,
but here in Colorado,
not quite as severe as maybe other
states that are may have been overvalued.
Boise ID is 1 where they saw a
lot of increase in prices and now
they're starting to settle down.
We're a little bit more stabilized
and normalized here,
even with some price reductions
to keep in mind.
Well,
I guess
with that in mind,
you mentioned the pricing
there at the end a little bit.
How are how would you characterize
the prices here across the area?
Would you call it stabilizing?
Leveling off, going down,
going up still?
How would you characterize?
I would say normalizing.
You know it is not normal to sell
your house in three minutes on the
first day it's on the market and I
know that that was super exciting
and it became the norm for really
the last year and a half to 24 months
where there was so much demand.
That anytime a house went on the market,
it went for over asking likely
if it was priced correctly.
There was more than one person who
wanted it and there was a lot of demand.
Now we're seeing a normalizing.
We're seeing houses that are on
the market for a couple weeks
before they go under contract.
As a seller, it feels like something's
wrong from a historical context,
this is more normal of what we
might expect in a normal market.
You know, Chris?
I chuckle because when we were dealing with.
Very very tight inventory situation at
the beginning of this year there were
people complaining we can't sustain this.
This is not normal.
We can't deal with this.
There's people who are getting priced out.
They've written 12 offers.
They still can't get under contract with the
house and now we shift all those sudden.
We're starting to hear kind of
gripes in the same way, well,
we're not getting as many offers now.
It's not like the days before,
and so I think that it's just important
to kind of keep things in in context.
When the pandemic happened.
When the Fed stepped in and
lowered interest rates,
that was an attempt to stimulate the economy.
Well, it worked,
housing in particular just went
off the rails.
We knew we couldn't stay there.
We knew there was going to be a correction.
We're feeling it now,
but I want to make one thing really,
really clear.
Even as we could talk about a
recession and what kind of impact that
might have on the housing market,
we are not anywhere near what we saw
during the Great Recession of 08 and 09.
And I know that there are tends to be
a little bit more concern and anxiety.
Because I'm hearing it with the changes,
so sudden but the big factor
here is that of inventory.
We are still technically even with the
price drops and the inventory increasing.
We are still technically in a sellers
market here in the Denver area,
and that is measured by the amount of
inventory or houses that are for sale,
so we know here in the Denver area where
about a month and a half of inventory,
and what that means if all
the houses were sold,
it would take about a month.
To sell everything that's on on
the market right now,
nothing new came on.
We don't balance out into a balanced
market or even a buyers market until
we have about six months of inventory.
So we're between one and two right now.
These are numbers that that
Realtors are taking and watching
very, very closely to have price
drops to have a price, you know,
crash in terms of of the housing market.
Typically you need inventory
when we think back to 08 and 09.
We had all those houses for sale.
All those foreclosures that
brought the prices down.
So even though we're seeing
some price reductions now,
we don't have near the inventory
to have a crash or a lot of deals
or foreclosures necessarily.
There will always be exceptions to that,
but in general we are still in a
situation where sellers have equity.
The inventory, while it is increasing,
is still considered to be relatively low.
2 numbers,
I thought were real interesting
Chris and that was that when we take
a look at the last couple of months
this year compared to last year,
this time last year we had about 3000
homes on the market in the metro area.
By the way, that's considered extremely low.
We doubled that this year,
so that's where we saw a lot
more inventory coming on.
Let me be mindful.
According to the Denver Metro
Association of Realtors,
that's about 6000 homes in the
area that they monitor.
Normal is about 15,000.
So we're still low inventory.
Yes,
we're seeing some changes.
Mortgage rates are higher as
we work on inflation,
but I have to say there are
opportunities lying in all of these
kind of concerns and anxieties about
what's changing in our market.
If you Chris were a buyer
who lost out to 20 offers,
couldn't find a home, no inventory
really was struggling with the market.
This is the time for you to come back
because now you're not competing as much.
You don't have to go.
As far over the asking price,
and while your mortgage payment
may be a little bit higher,
you're not having to bring $100,000 in cash
over the asking price to win the deal,
so I'd like to say,
and we're starting to hear more out there.
There's this great expression
which is Mary the house date,
the interest rate,
because you can get the house and
the price will stay the same,
but you can always refinance that
interest rate later when rates come down
and we know one thing about real estate,
it's very cyclical.
At some point the rates will come
back down and you can refinance.
I was gonna ask so looking forward
towards the future a little bit here.
You mentioned that buyer who
might have missed out during
the craze the last two years.
You said that maybe now is
the opportunity to do that.
But let's say somebody can
afford to wait a little bit.
Let's say they can wait a year.
They've got decent rental deal,
something like that.
What would be your advice?
Or is it to do it now or to wait a year?
Well, you're hitting on a very
important question that we're hearing
a lot and that is should I wait?
Are the prices going to come down?
Is that worth?
Waiting for and what we in general,
as Realtors are counseling our clients
to think about is what we know now and
what we don't know about the future.
We don't have a crystal ball.
It's not as clear,
but we can only go on the
information that we have at present.
Right now.
We know that our mortgage
rates for conforming loans 30
year loans between 5 and 6%.
We also know that the Fed is
planning on hiking up interest
rates a few more times this year.
It is very likely.
That mortgage rates will also be going up.
Now we have a little leveling
or normalizing of some of our
our home prices and values.
If I decide to wait a year kind of
banking on prices could be lower.
Might I also be facing the fact
that interest rates aren't 6%?
They're 7%.
Maybe it's possible that you're
going to get into a situation
where prices are a little bit
lower or right at market value.
We're slightly under,
but you're going to be paying
more to borrow the money,
so I say to clients look if this is
something that's in your future.
Get in the market now because the other
piece of this is if you're renting Chris,
you're going to pay
another 12 months of rent.
That doesn't make any money for you,
so you could always get
in if the rates go down,
you could refinance.
And as far as home values,
I've got some clients you say.
But how do I know that if I buy a
house this year that prices are
going to go down next year and
that's going to make me feel like
I didn't get a good investment?
Really,
your home's value only comes
into play when you go to sell it,
because that's when you're
going to pull your equity out.
So if you plan on staying
25710 years from now,
your value is going to go up.
If things should soften a little
bit or come down a little bit
and you need to sell next year,
well,
you may feel a little bit of a hit that way,
but overall I have to say that the
news is still very encouraging.
We tend we're sales people,
so we like to look at the positive here.
But there are some good opportunities.
If you're an investor who didn't want
to go up against all the competition
earlier this year and last year,
this is your time to pick
up another rental property.
If you're fixing flipper,
also an opportunity,
maybe get in at value or
slightly under that market rate.
If you are a buyer who is
usually utilizing a loan where
you're putting less money down,
maybe you couldn't compete
earlier this year when you had
all of these cash offers
you were competing in.
Again a good opportunity.
And then at the same time,
if you have a house to sell and
you want to actually write an offer
contingent upon your home selling
unheard of earlier this year,
now it's a little bit more possible.
So should I wait? I say no.
I say get into the market,
start building some of that equity,
and we can always adjust the interest
rate later when it comes down.
Mary the house and beat the interest
rate as you just said, any final tips,
advice for those those people who
might not be in the market yet
or who are looking to be in it
absolutely. And I think that it's
just that we're all in this together,
you know, and we're always going to
be looking for the opportunities.
But my final words are this.
We know that we have a historical perspective
of real estate being a solid investment.
It is what I know as the greatest.
Get rich slow scheme.
There is out there and just
like other investments,
just like your stocks,
they're going to come up.
They're going to come down and
it's just a matter of understanding
that everything cycles.
We've enjoyed some really unusual activity
that benefited both buyers and sellers,
particularly sellers over
the last couple of years.
Now we're starting to see some changes,
but I want to make clear we
don't see a danger zone.
We know we're going through some correction.
We know there's talk of a recession.
Historically, interest rates have
come down during recessions,
so might that be a possibility?
Yes, we don't have anything in our
sites that indicate we are bursting.
We've got prices crashing down
in the Denver area.
There are other parts of the country
that may be overvalued that are
going to see some prices come down.
I think that in the long run you're going
to be in a much better place owning
property than hanging on the sidelines.
Renting because you're always
going to have that asset growing
underneath you if you live.
In your investment.
All right there you have it.
That's a pretty rosy view.
At least I'm happy to hear that just
optimism. We'll call that.
How does that sound?
That's what you guys are.
You guys feed off that.
But anyways, Lane line managing
broker at Coldwell Banker Realty.
But that's known as our
Nine News real estate guy.
Thanks so much for joining
us here on News Plus
thank you. It's my pleasure.