"Tell me and I forget, teach me and I remember, involve me and I learn"

- Benjamin Franklin

September Newsletter

Fall Kickoff!

We have had an incredibly busy month. Just when you think school starting will slow things down, it never seems to be the case. Leo started soccer, I started coaching Leo's team, and Grace has been a fantastic cheerleader with her wild hair, cheering from the sidelines with Amanda! Leo and I are a bit too competitive....

Market Update

Given the novel I wrote last month, I'll try to keep my updates fairly brief. A quick side-by-side image above shows what we already knew; there's a lot of inventory, properties are taking a little longer to sell, and we're seeing minor median price decreases.

I was surprised to see Active Listings under 11,000. Only a 1.32% increase from July to August, but it still illustrates the narrative that there are options for buyers and seller's aren't in the ideal time of year to list their homes.

I have been encouraging buyers to start getting more active as they have more options and sellers have much less leverage than they did 6 months ago. Buying now means being patient with equity, we have a number of factors coming up over the next few months, however the long-term appears to be fairly positive in my opinion.

Outlook

There's a lot of speculation of what next year will bring in real estate. I won't try to guess or predict what may happen this November with the election or what rate cuts the Fed will eventually reduce to. But, I will say that we have pent up demand on both the Buyer AND Seller sides. It would be reasonable to say that we may not see huge price appreciation in 2025 (like we have over the past 10+ years) but there is reason to believe that the market will be quite active once we get through the next few months and welcome the new year.

Fed Rate Cut // 50 Basis Points

What Does It Mean?

Contrary to popular belief, rate cuts are a little more complicated than just a 50 basis point cut (.5% reduction). Let me jump into a 101 version of what this means:

The Fed recently made a 50 point basis cut on September 18. That means the Fed is lending money at a 1/2% discount from what they were lending. The current Fed rate is: 4.75 - 5.00%, a change from 5.25 - 5.50%.

Now, this would lend you to believe that if you're buying a home, you would get a 1/2% drop in your interest rate. Not so fast. Lenders are able to borrow at 4.75-5.00%, but they evaluate different economical factors to determine where they will place their benchmark rates when lending.

For example, if you've ever bought a home before you know that each day interest rates can be slightly higher or lower. That's not because the Fed changes from day-to-day, it's because lenders are evaluating current conditions and making risk judgements on what rates they're willing to offer.

A good way to think of this is: if the Fed is lending at 4.75%, a lender might charge 6.50% and that would mean that they make 1.75% on the loan they are offering. So, if a lender believes the Fed will bring rates down further, or we see positive economic data, lenders may be more willing to take a smaller margin (the same is true in reverse).

What a lender DOESN'T want to do is get into a loan with a small margin and then end up locked in with that small margin for an extended period of time.

This turns into a chess match of attracting new customers, but not over extending loans. That's why you see lenders offer lower rates BEFORE rate cuts when good news comes out with things like inflation, unemployment numbers, or jobs creation, amongst other things.

7408 S Alkire St., Littleton Co.

Congratulations to Ethan for closing on his first home. After searching for the past few months, this condo was the one that took the cake. Now for a little remodeling and a new place for you to begin building your real estate portfolio. Congratulations Ethan!

1019 S Osage St., Denver Co.

Congratulations Andrew! I loved working to get under contract on this beautiful house located in Athmar Park. The Denver market has shifted a bit and activity has slowed down, but you positioned yourself to get an offer and move your home to its' next owner. I'm looking forward to closing on this house as you've already found your new home!

Wishing you a blessed and colorful Fall ahead! Don't forget to schedule a trip to the mountains to see the changing leaves.

Travis Carey

Broker Assoc.

M: 607.435.5113

travis.carey@compass.com