Celebrate Your Wins | Guest Post
Some will come true as 2024 marks the continuation of a normalization period. A period in time that takes us further away from the intensity of the pandemic. Yet I feel 2025 will really begin the healing process, and 2024 will simply pave the way. So maybe it's what we do this year that matters.
In 2023, Denver Metro real estate agents welcomed 29,409 families into their new single-family home. They supported 12,431 families in finding warmth in a condo or townhome. According to Redfin, 86.6% of those purchases went to owner occupants, reinforcing Colorado's highest homeownership rate since 2010 at 67.7%.
Buyers in 2023 were challenged to navigate extremely volatile interest rates as the 30-year fixed rate bounced from 6.6% to 5.99% to 8% and back down to 6.6%, making budgeting and planning to buy a home a bit like playing drunken darts. But those who were up for the challenge came out winners. Not because their homes appreciated tremendously (as Denver Metro homeowners experienced a 1.7% loss in value) but because they were able to negotiate lower prices and seller concessions for closing costs and interest rate buydowns. Coming off 2021 and 2022's close-to-list year-end averages of 103% and 102.3% respectively, 2023's 99.5% felt like a gift.
And while no one wants to lose value, let me double-click on that for a moment. I want to share a story of one of our buyers this year, a single mom earning $90,000 a year with two kids in middle school. She’s been trying to buy a home for the last several years, a feat that puts raising two middle schoolers to shame. But this year opened up her opportunity. She was able to buy a $525,000 home with 3% down. She also negotiated a seller concession to pay for a 2/1 buydown. Now, she lost 1.7%, or $9,000 in value. But she gained $12,134 in seller concessions and $6,860 in principal reduction and did not have to pay over asking for her home.
Given the slight tilt towards buyers, 2023 saw a resurgence of first-time home buyers at a slightly lower median age. According to Zillow's 2023 Consumer Housing Trends Report, 50% of all homebuyers in 2023 were first-timers, up from 45% in 2022 and 37% in 2021. Those buyers also lowered the median age of a first-time homebuyer in 2023 to 35 years old. Higher interest rates cooled off competition, giving down payment assistance, FHA, and VA buyers opportunities they have not had in years.
Sellers, on the other hand, felt like they gained a win too… by not selling. Denver had one of its lowest New Listing years, coming in 18% lower year-over-year and as much as 30% lower than 2019. Only 49,560 new homes came on the market last year. 85% of which sold. So while days-on-market more than doubled year-over-year from 5 days to 12 days, sellers who priced right, staged right, and were willing to negotiate sold. Those who didn't remain within the stability and security of the lowest interest rates homeowners have ever seen.
Outside the real estate market, consumers felt a win, as well. As rates dropped and the stock market broke records, consumer confidence surged along with the wealth effect, restoring optimism for 2024. 3rd quarter GDP jumped to a surprising 4.9%, supporting a strong forecasted 2023 growth rate of 2.4%. And the labor market continued to surprise in its resilience. As 2023 closed, job openings started to return to their pre-pandemic trendline, and initial jobless claims fell squarely on the 2019 average of 218,000. Colorado wages increased by 5.6%, and unemployment stayed at 50-year lows, unable to fulfill the Sahm Rule and initiate a recession call.
2023 might not have been a fairytale year as banks failed, wars were initiated, the government threatened default and shutdowns, employees walked out, inflation skyrocketed, mortgage rates hit 23-year highs, housing inventory hit record lows and mortgage purchase applications hit lows, not seen since 1995 when there were 22% fewer people in the United States, and Denver was 60% its current size.
Yet, there were incredible wins inside the headlines and noise and fear. Success stories of families creating stability and security, children running home from school, and Gen Z and millennials kicking off multi-generational wealth. Stories of homeownership.
2024 will open up more doors of opportunity. Buyers have time to assess and plan as appreciation stays soft for another year. With rates slowly dropping, affordability improves. And as sellers start to feel better about selling, everyone will have more choices. 2024 will indeed be an incredible year.
Cheers until next time. This is Nicole Rueth with the Rueth Team. It's my pleasure to keep you updated.
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