As 2024 nears its end, the question on many homeowners’ and buyers’ minds is, “When will home prices come down?” At Corken + Company Real Estate Group, we aim to keep our clients informed and empowered to make the best decisions in today’s ever-changing market. Let’s break down the key factors driving home prices and what could cause them to shift in the months and years ahead.
Understanding the Drivers of Home Prices
Home prices are influenced by a balance—or imbalance—between supply and demand. When demand exceeds supply, prices rise. Conversely, when supply surpasses demand, prices begin to cool. Several factors are currently at play:
1. Low Housing Inventory: Despite improvements in inventory in some markets, the supply of homes for sale remains historically low. This is partly due to existing homeowners hesitating to sell, often because they locked in lower mortgage rates in the past and don’t want to trade them for today’s higher rates.
2. High Buyer Demand: While higher mortgage rates have slowed some buyers, demand for homes remains steady, especially among first-time buyers. Millennials, now the largest generational group, are in their peak home-buying years, keeping demand strong.
3. Economic Factors: A resilient economy and a strong job market continue to support housing prices. Even with inflation and interest rate hikes, many buyers are willing and able to enter the market.
4. Homeowner Equity: Homeowners today have record levels of equity in their properties, making them less likely to sell at a discount even in a slower market.
What Needs to Happen for Prices to Decline?
While the above factors support stable or increasing prices, several conditions could lead to price declines in the future:
1. A Surge in Inventory: If more homes come to market—whether due to new construction, more existing homeowners listing their properties, or other factors—prices could moderate. However, current trends show builders remain cautious, and homeowners continue to stay put, so a major inventory surge is unlikely in the near term.
2. Decreased Demand: If mortgage rates rise further or the economy experiences a downturn, demand could weaken, putting downward pressure on prices. However, given the strong underlying demand, a sharp drop in prices seems unlikely barring a significant economic shift.
3. Local Market Variances: While national trends are important, real estate is local. Some markets may experience price adjustments due to local factors such as job growth, population changes, or regional economic conditions. Denver Metro’s strong economy and desirable lifestyle make it more resilient to sharp declines.
What Does This Mean for Buyers?
For buyers waiting for prices to drop significantly, it’s essential to understand that the market is unlikely to see a drastic decline anytime soon. Instead of timing the market, focus on finding the right home for your needs and budget. Even in a market with steady prices, purchasing a home now allows you to build equity and take advantage of potential future price appreciation.
What Does This Mean for Sellers?
For sellers, today’s market still offers strong opportunities. With inventory remaining tight, homes that are priced competitively and marketed effectively continue to attract serious buyers. At Corken + Company, we specialize in helping sellers maximize their returns while navigating the complexities of today’s market.
Partner with Corken + Company
Navigating the current housing market requires expertise, strategy, and a trusted partner. At Corken + Company Real Estate Group, we are here to guide you through buying or selling with confidence. Whether you’re looking to secure your dream home or make the most of your property sale, we are dedicated to your success.
Take the Next Step!
Contact Corken + Company today to learn more about the Denver Metro market and how we can help you achieve your real estate goals. Let’s work together to make your real estate journey seamless and successful!
