Denver Real Estate - Home Buyers Get a Second Chance

Is now the right time to buy a Denver home? Many Denver homebuyers are feeling a bit letdown after the tax credit expired on April 30th. You may feel like you missed an opportunity to get into the Denver real estate market, but according to the latest data, the best time to buy may be after the tax credit expired.

According to home showing activity from Your Castle Real Estate home listings, showing activity is down 42% in May, compared to the average showings per month, broken down by price range from January through April.

From January through April, specifically for the $200,000 to $250,000 price point there were 11 average monthly showings per home. This price point includes Denver's median home price (about $210,000) and also one that was most effected by the tax credit incentive. Therefore, if you bought a home before the tax credit expired, you had approximately ten other buyers looking at the same home each month.

Now looking at the same showing stats and price point in May, there have been around seven showings per home in the month following the tax credit expiration. Your competition has dropped nearly 40%! Competition can play a huge factor in a buyer's motivation to offer more money, meaning that a home can end up costing much more than the $8,000 tax credit.

What if you have looked at 10 homes before you finally come across "the one." The home has been on the market for around three weeks, so you and your Realtor decide to make an offer of $15,000 under the asking price. You are fairly confident that you can get the home for at least $10,000 under the asking price, but unfortunately, you soon find out that there is another offer on the table. You need to decide the maximum price you are willing to pay for the home. How much do you offer now? You can see how a little competition can quickly increase a homes purchase price by far more than $8,000, the amount of the home buyer tax credit.

Another piece of buying your home is the financing since interest rates play a huge factor in how much home you can afford to buy and they directly influence your monthly payment. Interest rates have decreased a half point from a month ago, making a home more affordable. If you bought a $250,000 home in April, you would be save over $100 per month on the same home this month.

The tax credit created some great opportunities for many Denver first-time and move-up home buyers, but now that it has expired, your best deal may be on the horizon. With lower competition for your Denver home and interest rates near all-time lows, you can expect a much better return than the $8,000 that was offered last month!