New Year, New Market
New Year, New Me? How about New Year, New Market?
Happy New Year and Welcome to 2025!
As we step into 2025, let’s take a moment to reflect on the local real estate market in the Colorado foothills. The end of 2024 showed a resilient performance, finishing strong despite a sluggish October. Across the front range and throughout the state, we witnessed a significant uptick in home closings in November, with December showing less of a slowdown than usual.
In the grand scope of the year, 2024 recorded slightly more home sales than 2023, although we still fall short of the high numbers seen over the past decade. While some may view these trends as indicative of a weak market, I contend that we are experiencing a healthier phase of real estate. The boom we experienced from mid-2020 to mid-2023, marked by low interest rates, created an environment where rapid sales were the norm. However, the current pace may feel slow, yet it offers stability and opportunity for both buyers and sellers.
Looking ahead, the outlook for 2025 is mixed. At the end of the third quarter of 2024, I held optimism for a vibrant start to the New Year. However, recent developments suggest we might experience more of a subtle pop in activity rather than a significant surge. While the Federal Reserve made headlines by lowering rates in December, average mortgage rates have surprisingly risen back up to around 7% for a 30-year fixed loan. This shift is partly due to the Fed’s cautious stance on inflation, indicating that rates will not be lowered further if inflation remains stubbornly high, a sentiment echoed by most economists for 2025.
I initially anticipated low inventory to be met by a renewed demand post-holidays, but current market indicators point to a more tempered recovery. While demand is not rebounding as robustly as expected, we are still operating in a market characterized by low supply. As potential buyers gradually accept that elevated rates may persist, we can expect to see individuals who need to relocate begin to take action, even if they have previously held off in hopes of better rates.
In summary, while we may face challenges in the immediate future, the local real estate market remains dynamic, presenting opportunities for those who are prepared and informed. Should you have any questions or need further insights into the local market trends, please don’t hesitate to reach out.
Wishing you all prosperity in the New Year! And here’s to the growth of our local real estate market!
