The past few years have been full of ups and downs for the real estate market. If you followed the market, you probably heard about homes selling on average 10-15% over the asking price and buyers waiving everything in order to “win” the home. However, the last 6 months have definitely seen a shift in our markets. It has “cooled” down, or as I call it, the market is normalizing. Perhaps you’re thinking 2023 could be the year for you to buy or sell your home. Before you make that decision, it’s useful to develop a better understanding of what the following year could have in store for the Broomfield housing market. This article will take an in-depth look at the current state of the Broomfield real estate market with the goal of helping you decide if this is the best possible time for you to buy or sell your home. Everyone's situation is different, and usually, there is not a straight yes or no answer. It depends on so many factors that can be determined by a detailed, customized approach of asking questions. This article covers the overall market situation. If you have direct questions about your personal situation, Dina Piterniece would love to help you find the answers and go through the process to determine the best approach for you.
1. First things first - what’s the market been like in 2022?
2022 has been a wild year. We started off the year fast, and the values went up faster than anyone could have predicted. To give you a perspective, the median price for detached homes in Broomfield for Q1 in 2021 was $610,000. In 2022 Q1, we saw the median price go up to $685,000, that’s about a 12% increase. In Q3 2022, the median sales price increased to $696,000. The first 6 months of the year were drastically different than the second part of the year. While Broomfield is still holding the home values strong, the overall real estate market has slowed down. One of the reasons is the mortgage rate increase that started late spring/early summer, higher inflation rates, and less inventory.
While the median sales price went up in Q3, the list-to-sold ratio went down from 105% to 98%. Meaning the bidding over the asking price went down by 7%, not the home values, just how much people were willing to pay over the list price. With the increase of rates and uncertainty with the market shift, that is very common. Properties were sitting on the market longer before they received an offer; we went from averaging 4 days on the market to 12 days. In perspective, 12 days is not that long. In a normal, balanced market, homes would be in MLS for 2-3 months. Year-over-year prices in Broomfield are still up from 2021.
With the market normalizing, buyers are seeing more opportunities, something we have not experienced in the last three years. In Q3 and Q4, we are able to negotiate a better price, rate buy-downs, and inspection items, which helps clients achieve their homeownership dreams when they are not able to compete with the biddings before. This is the best market for buyers.
For sellers, the market is still very favorable, as low inventory is still the root cause of our challenging market conditions. We still see high interest and pent-up demand from the buyers; they are just pickier now. With the right strategy in getting your home ready to sell (condition, timing, marketing, price), there are plenty of opportunities for sellers to make a top dollar.
2. What are experts saying could happen in 2023?
If you read the news, it sounds quite depressing. However, very rarely do they highlight the whole context of what the market is doing. As a real estate professional and trusted advisor for my clients, I believe this market offers the greatest opportunities for both buyers and sellers.
Inflation and mortgage rates are connected. As inflation continues to go down, so do the mortgage rates. We experienced this in November, inflation numbers came lower than anticipated and that impacted mortgage rates right away. We saw them go from 7.375% to 6.25-6.5% within a week. The rates continued to improve in the following two weeks, and do you know what happened with the market? We saw more transactions take place in those two weeks. Why? Because there are many buyers sitting on the fence waiting for rates to improve.
The catch is that this market won’t last forever. Since mortgage rates follow inflation, once inflation drops, rates will drop with it. Once the rates drop to the mid to low 5% range, buyer activity will flood the market. I don’t believe we will see an extreme increase in multiple offer situations like we saw in early 2022, but there will be much higher demand, which most likely will push the prices up. Our inventory levels have not reached 2019 numbers, and inventory isn’t expected to grow over the coming months. Depending on the expert you follow, rates could start dropping early next year or by Q2 of 2023.
3. What brings people to Bloomfield?
Sellers may want to know who they are marketing their homes towards, and local buyers could be interested in what sort of competition they’ll have. Bloomfield is one of the top suburbs in the entire Denver area. The cost of living is slightly higher than the national average but is affordable compared to similar affluent communities across the country. In addition, the median household income is higher than averages throughout the entire state of Colorado.
Broomfield is repeatedly listed as one of the top most livable cities. It offers 63 parks, including the 300-acre Broomfield County Commons, with playgrounds, tennis courts, baseball, soccer, and softball fields, not to mention amazing indoor recreation centers and access to Colorado state parks, trails, and open space.
Broomfield offers a prime location, situated within the north metro area. The city is 20 min away from both Denver and Boulder, making it a highly desirable place to live and work.
4. If I choose to sell my home, when’s the best time to take it to market?
In general, most sellers generate the greatest profits when they list their home during the late spring or early summer, between March and May. However, in 2023 it will depend on inflation and mortgage rates. In the last two to three years, late January is when we start to see buyer activity picking up. If you are thinking of selling in 2023, here are a few tips for preparing your home:
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Plan to have your home move-in ready as much as possible. The better it shows and if priced right, the better chances you will get an offer quickly.
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Small updates like fresh paint and a new carpet will go a long way.
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Price it right from the start. Overpricing will cost you in the long run.
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Timing is crucial. Talk to a real estate expert that will guide you for the best time to sell that works with your goals.
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If your home is in a desirable location and nicely updated, you might even receive multiple offers on your home.
5. Is there a better time of year to buy a home?
In most years, the market slows down in August and cools off substantially during the holidays. By then, people are busy planning for the holidays and end-of-year activities, and most people don’t have the time to shop for homes. They will do that after the holidays.
I believe that now is the best time to be a buyer. While it’s true that rates have increased, what’s also true is that buyers have opportunities that we have not seen since at least 2019:
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You have negotiating power and can often get a lower price.
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Sellers will pay your closing costs or buy down your rate for you!
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No need to waive or cover appraisal gaps (many of my clients’ appraisals are coming in significantly higher than under contract price).
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Sellers will take care of inspection items or provide you compensation to make repairs after closing.
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30-day closings are once again the norm.
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If you need to sell, you can submit contingent offers.
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Make an offer with a minimal amount of money down.
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New build communities are offering great incentives and price reductions.
6. What can I do to prepare to buy or sell?
Getting your finances in order is a great first step if you're thinking about buying. A great lender will walk you through the steps to find the best loan option for you and will prepare you with all the necessary documents so that when you find the right home, you have the finances ready to make a strong offer.
If the finances are not there yet, the lender will provide you with the next steps that you need to do in order to be ready to buy.
The next step is to find an experienced real estate agent that will learn about your purchase goals and guide you through the steps to achieve your dream of homeownership.
Sellers can begin to think about where they might price their home by running a CMA (or Comparative Market Analysis) and speaking with their real estate agent. If you still have a few weeks or months before you’ll take your listing to market, you can perform a few small upgrades that may boost your ROI or help your home stand out. I highly recommend talking to a real estate professional first, as they will guide you and help you decide what would be the best areas to invest your money in order to get it back.
Nobody knows the Broomfield real estate market as well as Dina Piterniece. Dina knows that real estate is one of the biggest investments that a person will make, and she takes time to carefully educate each of her clients on current market happenings so that they can approach their sale or purchase with the best possible strategy. If you’re looking to buy or sell a home in the Denver area, make sure Dina is one of your first calls.