How the Broncos Affect Our Real Estate Market
According to Megan Aller, the number-cruncher and First Lady of Big Data at First American Title, three factors influence the Denver metropolitan real estate market every January:
- Interest rates. Mortgage rates are currently running well under 4%, a three-year low and a major reason why homes are affordable despite recent price increases. The average home mortgage payment would be hundreds of dollars more each month if rates were at 4% or higher.
- The weather. Those freezing days during the National Western Stock Show, along with snowfall that makes touring homes a chore, typically results in slumping mid-winter buyer activity. This year, January was relatively warm & storm-free and buyers responded in kind.
- The Broncos. If the Broncos go to the playoffs--and they have done so more often than not over the years--buyers seem less inclined to look and sellers seem more reluctant to sell while the games are aired. Of course, that wasn’t an issue this year.
This year, all three phenomena were in synch to produce a surprising jump (to everyone except Mrs. Aller) in buyer activity. Over 50% more properties went under contract during January compared to December and 60% more than in January, 2019.
While the year got off to a rousing start, the snow storms that hit us in February have had the opposite deleterious effect on our market, as under contracts have fallen off from last month’s and last year’s levels.
Sellers (and buyers) shouldn’t write off the winter season to sell or buy homes. Sellers whose homes are available now will enjoy less competition because the common wisdom among home sellers is to wait until spring to list (which is incorrect). Likewise, people who are buying now are serious because they are willing to traipse through snow to look at available homes. So, while the less hearty wait until April or May for spring weather to sell or buy properties, the market is alive and well during the first quarter of the year.