Challenges persist entering home buying season

Colorado’s housing market is seeing a surge in new listings as the spring selling season begins, but affordability challenges persist, particularly for first-time buyers.

While sellers in some areas are hesitant, others are entering the market, leading to increased activity and fluctuating prices.

The rise in interest rates, couple with increased non-mortgage costs, is creating a complex landscape for those looking to buy and sell homes.

Statewide, the 6,682 new single-family listings were up more than 90% from December to January and 27.3% compared to the same time a year ago. New condo and townhome listings also spiked, rising nearly 150% from December and 34% from January 2024, according to the January Market Trends Housing Report from the Colorado Association of Realtors.

In the seven-county Denver metro area, 3,839 new single-family listings hit the market, up 105% from December and 27.3% from a year ago. The 2,397 condo and townhome new listings represent a 93% increase from December and are up 34% compared to a year ago.

“We’ve definitely felt activity start to pick up over the last couple of weeks,” said Cooper Thayer, a real estate agent The Thayer Group and Denver market spokesperson for the Colorado Association of Realtors. “The spring selling season definitely starts after the Super Bowl.”

Although activity is up, first-time buyers still face affordability challenges. Non-mortgage costs such as insurance premiums, HOA dues and property taxes have jumped 30% to 40%, and with interest rates remaining elevated over the past few years, it’s difficult for first-time buyers to get into the market.

“Lack of entry-level housing in our market is tough, but the mid-range and luxury segments are performing really well,” Thayer said.

In the Boulder and Broomfield markets, buyers are cautious about making the leap into a new house and sellers are reluctant to sell. The market has seen no new listings and zero appreciation since this time last year, said Kelly Moye, a broker associate with Compas who works in the Boulder and Broomfield county markets.

Although the market showed a bit of activity in January, Moye said it’s now stagnant again.

“Interest rates need to come down, but they’re not going to — that’s what will shake the market loose,” Moye said. “But the waiting game is not good for buyers. Prices go up, things change in the market and they just continue to rent.

“If the rates were to change, we’ll see all sorts of buyers hop off the couch and jump into the market.”

Interest rates also are keeping buyers and sellers on the fence in Fort Collins, where home prices are on a roller coaster ride. In October, the median price was $631,000. It dropped to $585,000 in November and popped back up to $595,000 in December. In January, the median price was $600,000.

“Buyers and sellers in lower price points are still relying on loans to make that big financial decision, so interest payments create a big barrier,” said Chris Hardy, a realtor with Elevations Real Estate in For Collins. “If we could see interest rates drop to even 6.5% and have them stay there for a couple of months, people would be amazed at what a different real estate market that would be.”