According to a recent Denver Post article, rising interest rates in 2023 dampened investor interest in the Denver metro area. The higher rates combined with long waits for building permits made buying and flipping homes less appealing, while the higher rates made renting investment properties less profitable.

Investor purchases of U.S. homes dropped by 30% year over year in the third quarter, the lowest level in seven years, due to rising mortgage rates, high home prices, and a lackluster rental market.

Despite higher interest rates, limited inventory held home prices steady in Colorado. Denver Metro Area Realtors reported the median close price for homes for 2023 was $578,00 compared to $588,000 in 2022, $525,000 in 2021, $450,000 in 2020, and $420,000 in 2019.

However, the number of homes sold and the total sales volume for 2023 were lower than in the past few years. Closed properties totaled 41,840 in 2023. That’s down from 51,016 in 2022, 64,108 in 2021, 63,516 in 2020, and 58,902 in 2019.

It appears investors are finding other places to put their money. Some are even divesting from their real estate portfolio and selling houses. This makes sense for investors who’ve owned their properties for two years or more and have built up equity. And if they updated the homes, that would make the homes even more appealing.

Given the current climate, it’s not a bad time for investors to walk away, and if the home is in good shape, there are certainly buyers.

That’s not to say there are no investors in the area, but that particular market segment is weaker. Fewer investors are buying right now, and more are selling. 

The silver lining in all this? With fewer investors in the market, it’s a positive thing for potential homebuyers who previously may have felt pushed out.

If you’re ready to become a homeowner this spring, now is a great time to start your search. Reach out to one of the experienced professionals at Metrowest today – we’d be happy to help you start the process!