In recent years Colorado Cash Buyers have accounted for a significant number of home purchases in Denver and Colorado. Cash Buyers have since vanished.
DENVER, CO, UNITED STATES, January 4, 2023 /EINPresswire.com/ — Companies Buying Houses For Cash In Colorado accounted for over 20% of all homes bought in recent years. Many residents of Denver and real estate experts across the country believed this was a significant cause of Colorado house prices skyrocketing. However, in the past three months, we have seen a rapid decline in the SOLD prices of Denver real estate. This reduction in value is measured year on year. This eliminates any seasonal variations. This is a report on the causes of the dropping housing market in Denver and Colorado.
The reasons for Denver house prices to drop are commonly cited as being the rapid increase in mortgage interest rates. This was the result of stubborn inflation. The inflation is arguably the result of the Federal Reserve and the United States government fueling inflation with cheap money over the past decade. Many experts do not understand why the Fed didn’t increase rates incrementally over the 2018-2021 period.
The rapid rise in mortgage rates resulted in many Denver buyers reassessing if now is a good time to buy, or sell, property in Denver. Currently, interest rates have sat at 6% or higher for a 30 year mortgage. for several months.
We talked to many people looking to buy a house on the Front Range and the general sentiment was a “wait and see” approach. Some buyers felt the interest rates would continue to force Denver’s high prices down. Other potential buyers were waiting on rates to drop. These were all people looking to buy a house as a primary residence.
This demand reduction has hurt house prices in Denver. Some real estate experts have recorded that prices have dropped over 10% in 4 months. Plus the same experts felt the trend would continue. Talking to one real estate investor is where it was discovered that a significant cause of the reduced demand could be coming from Colorado Cash Buyers sitting on the sidelines.
“Denver had a rapid growth over the last decade, which caught the attention of many Hedge Funds, Institutional cash buyers, and smaller real estate investment companies that pay cash for houses,” said Shaun Martin of We Buy Houses In Denver, a company that buys Denver property for cash that you can learn more about at https://webuyhousesindenver.org/companies-that-buy-houses-for-cash/ and he continued, “As interest rates increased, the Colorado cash buying companies began to get nervous and many disappeared overnight, which has exaggerated the downward trend in Denver home prices that we have witnessed the second half of 2022.
This can be seen in other markets across the country, such as Los Angeles and San Diego, where local cash home buyer Alex Cappozollo of Brotherly Love Real Estate added, “San Diego has seen a downward trend in both prices and the number of cash buyers currently purchasing property and the sentiment of these companies that pay cash for houses is similar to that of the average home buyer which is, very much a wait and see what the housing market does, what happens with inflation and subsequently where rates go. As a cash buying company, we are still actively sending out cash offers on San Diego property and the interesting fact is companies like ours that can buy houses fast for cash are benefiting from the reduced demand because our cash offers are based on current market value which is explained in more detail at https://brotherlyloveproperties.com/sell-my-house-fast-san-diego-ca/.
SUMMER 2023 – The Near Term Future of House Prices.
Shaun Martin of We Buy Houses in Denver believes Denver house prices will rebound into the black as the selling season heats up. Plus, people who want to buy a house will readjust expectations and higher interest rates will become the new normal. “I am confident that buyers will return to the market in the summer of 2023, which will bring relief to a number of people needing to sell their house fast or homeowners that rely on the equity as a retirement nest egg. Of course, this relies on inflation easing, which seems to be the case now. If inflation continues to ease, we should see the Federal Reserve Bank ease the interest rate. This is another factor that will bring buyers back in a robust way and stabilize house prices in Denver, San Diego, and all across the country.
Traditional home buyers and Colorado cash buyers are taking a wait-and-see approach when buying real estate in Denver, CO, and San Diego, CA. This is negatively impacting house prices because of the significant demand reduction. Many real estate experts believe the housing markets will stabilize as we move into the spring and summer selling seasons of 2023.
Flee The Denver Real Estate Market 2023 Update
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