The Pulse

As we navigate the complexities of the U.S. housing market in 2025, it's essential to understand both the challenges and opportunities that lie ahead. This overview will delve into the current state of real estate, highlighting positives, negatives, and projections for the next three months.

Positives

1. Economic Growth and Investment Activity: The U.S. economy is poised for growth in 2025, driven by consumer spending and productivity gains. This economic stability is expected to support a moderate recovery in real estate investment activity, despite high interest rates.
2. Office and Retail Revival: The office sector is seeing an up-cycle, with shortages of prime space anticipated by the end of 2025. Retail, meanwhile, is experiencing low vacancy rates, with growing demand in suburban locations and Sun Belt cities.
3. Industrial and Multifamily Growth: Industrial real estate continues to benefit from e-commerce, while multifamily demand remains strong due to high home ownership costs. Vacancy rates in multifamily are expected to decrease as tenant demand persists.

Negatives

1. High Mortgage Rates: Mortgage rates remain elevated, hovering around 6.75% to 7% for 30-year fixed loans. This high cost of borrowing continues to strain affordability for potential homebuyers.
2. Limited Housing Inventory: Despite a slight increase, housing inventory remains below historical averages. This shortage, combined with high mortgage rates, keeps the market challenging for buyers.
3. Affordability Crisis: The gap between home price growth and wage increases exacerbates affordability issues. Many potential buyers are priced out of the market, leading to a significant portion of renters unable to transition to homeownership.

Projections for the Next Three Months

1. Mortgage Rate Stability: While there are predictions of slight decreases, mortgage rates are generally expected to remain stable or slightly decrease, which may not significantly impact affordability.
2. Inventory Trends: Inventory levels are likely to continue their slow increase, primarily driven by new construction rather than existing home sales. This could lead to a more balanced market in some regions.
3. Home Sales and Prices: Existing home sales are projected to see a modest increase, potentially reaching around 4.1 million in 2025. Home value growth is expected to be soft, with a forecasted increase of about 0.6%.
4. Market Dynamics: The market is likely to remain a seller's market in many areas due to limited inventory, though regions with increased inventory might shift towards a buyer's market.

In conclusion, while the U.S. housing market faces significant challenges, there are opportunities for growth and stabilization. As a Denver realtor, understanding these national trends can help you navigate local market dynamics and provide informed guidance to your clients.

Looking Ahead:While change can feel daunting, it’s important to recognize the positive side. This settlement signals a move towards greater transparency and fairness in our industry—steps that benefit everyone involved. At Guide Real Estate, we're committed to guiding you through these shifts, ensuring that your real estate experience remains seamless, informed, and FUN! To reiterate, my primary goals are straightforward.

As Your Buyer’s Agent:

· Educate you on what your current financial responsibilities and where they could lead with any given contract considered.

· As your local expert, I will help you navigate this evolving and complex market.

· Minimize your out-of-pocket expenses + purchase price through skillful negotiating. 

· Streamline and sync the process to finding your DREAM HOME on your timeline.

As Your Seller’s Agent:

· Maximize exposure through industry leading technology, expansive network and strategic marketing. 

· Protect you and mitigate your risk through strategic advice + informed decision making.

· Generate top dollar offers and maximum equity.

· Bring the energy and positive vibes resulting in your rewarding journey.  

Feel free to reach out if you have any questions or if you'd like to discuss how these changes might impact your specific situation. I’m here to help you navigate these evolving waters with confidence. 

Recap:
What’s Happening?
In brief, a group of attorneys brought a class action lawsuit in Missouri against NAR and won. The lawsuit challenges certain practices within the real estate industry, particularly those surrounding Realtor compensation and the advertising of it. The settlement marks a significant shift in how these practices will need to be handled going forward. Changes took effect locally on August 15, 2024.Cheers to progress, positive change and necessary evolution in the Real Estate Industry!

 What’s Happening?

In brief, a group of attorneys brought a class action lawsuit in Missouri against NAR and won. The lawsuit challenges certain practices within the real estate industry, particularly those surrounding Realtor compensation and the advertising of it. The settlement marks a significant shift in how these practices will need to be handled going forward. Changes took effect locally on August 15, 2024. 

HELPFUL FAQ LINK

For Sellers:

Thankfully, the Exclusive Right-To-Sell Listing Contract remains very similar to mandated contract from prior to the NAR Settlement. The main focus once again falls under Section 7.0 Compensation To Brokerage Firm; Compensation to Buyer Brokerage Firm. This is where we will hyper focus on who is responsible for each Agent’s compensation and exactly how much.  

Pros: The cream will rise to the top as they say. There will be more competition among agents, and you will need to identify what you need most from your Agent. 

Cons: There may be increased pressure to negotiate commissions, which could complicate the process, cost more or cost less.  

 What’s Happening?

In brief, a group of attorneys brought a class action lawsuit in Missouri against NAR and won. The lawsuit challenges certain practices within the real estate industry, particularly those surrounding Realtor compensation and the advertising of it. The settlement marks a significant shift in how these practices will need to be handled going forward. Changes took effect locally on August 15, 2024. 

HELPFUL FAQ LINK 

For Buyers: 

Buyers will be expected to sign and acknowledge they are aware of their financial responsibilities via a state approved disclosure/agreement with the ‘Showing Agent’ prior to any showings occurring. Within the Exclusive Right-To-Buy Listing Contract, the most noticeable changes will be under Section 7.3 Who Will Pay Brokerage Firm’s Success Fee. I will review this very carefully, thoroughly and in full detail. The adjusted options are.

· 7.3.1 Seller’s Brokerage Firm or Seller May Pay. Buyer IS Obligated to Pay.

· 7.3.2 Buyer Will Pay. 

Now remember, everything is negotiable from items within this contract to items within the Contract to Buy-And-Sell Real Estate. You can get creative and negotiate the showing of one property, multiple properties over one weekend, a specific territory, dive in with your Agent for a 3- or 6-month commitment and/or far more. Beware of what you read and hear in the media. Please know that the compensation for Buyers Agents has not vanished into thin air. It’s simply a matter of who is going to be responsible for some or all of it + how much the Buyer Agent compensation is. 

….AND NEVER FORGET THE GOLDEN RULE!

YOU GET WHAT YOU PAY FOR. 

So once again, beware for those deals that seem too good to be true! If saving Agent Compensation on one of the largest purchases of your life is high priority to you, just know that you might be carrying much higher risk and actually paying far more for the home than that compensation might have been. I ALWAYS suggest going with an educated advocate who will substantially reduce your risk. 

Pros: 

· More transparency and conversations about how compensation is handled, what the maximum compensation can be, and who is responsible for it. This should allow for better-informed decision making. 

Cons:

· If Buyers have to cover the Buyer Agent compensation; they might have less buying power, making their offer less desirable. If a flat rate or discount Buyer Agent is representing the Buyer, the Buyer could run the risk of less or non-transparent communication, rushed decision making, higher liability during the transaction or after closing.

· Reminder that rolling Buyer Agent compensation into a mortgage is strictly prohibited by federal law. This may change over time, but for now, if the Seller is not covering the Buyer Agent Compensation, or a portion of it, then it will come out of the pocket of the Buyer at Closing.

For Investors:

Pros: The evolving landscape could present new opportunities to strategize deals with greater clarity on costs. Opportunities for private financing could become more popular.  

Cons: As with any change, there may be a period of adjustment as the market finds its footing. Inventory levels could be an issue if Buyers have to target less expensive homes and take on more projects due to less buying power (Buyer Agent Compensation Responsibilities).

Current Market Snapshot 

The Denver housing market is showing signs of increased activity as we move further into 2025. Here are the key facts: 

Inventory Surge: January saw a significant 44% year-over-year increase in active listings, marking the highest start-of-year inventory since 2014. Some of the inventory however is carryover from withdrawn and expired listings in 2024.  

New Listings: 4,339 new properties entered the market in January, a substantial 135.43% increase from December 2024. 

Median Home Price: Prices remained fairly level at $575,000, a decrease of 0.51%.  Days on Market: Homes are spending a median of 45 days on the market, up 12.5% from December 2024.  

Pending Sales: Demand, as measured by pending sales, increased by 31.83% compared to the previous month. 

Updated | Market Trends | Outlook

Balanced Market Emerging 

We're seeing a shift towards a more balanced market. The surge in inventory gives buyers more options, while sellers are adjusting their strategies to remain competitive. This is creating opportunities for both sides of the transaction. 

Price Stabilization 

While we've seen moderate price growth, the market is showing signs of stabilization. The 3% year-over-year increase in median home prices indicates steady appreciation without the dramatic spikes of previous years. 

Buyer Behavior

Buyers are becoming more selective, taking advantage of the increased inventory. They have more leverage in negotiations, often securing seller concessions or below-list-price purchases. 

Looking Ahead

1. Gradual Recovery: Experts predict a moderate increase in home sales and a slight rise in median home prices throughout the year. 

2. Interest Rates: While still higher than historical lows, rates are showing signs of stabilization, which could encourage more buyers to enter the market. 

3. New Construction: The pipeline for new apartment units is slowing, with only 8,500 units expected in 2025, down from 18,400 in 2024. This could lead to a more balanced rental market. 

4. Market Segments: The luxury home market, particularly properties between $1 and $2 million, is showing resilience with increased sales activity. 

Conclusion

The Denver real estate market in 2025 is characterized by increased inventory, stabilizing prices, and a shift towards a more balanced market. For buyers, this means more options and potentially better deals. For sellers, it emphasizes the importance of realistic pricing and effective marketing strategies. 

As your experienced Denver realtor, I'm here to help you navigate these market conditions. Whether you're looking to buy, sell, or invest, now is an excellent time to explore your options in our dynamic Denver market.

What are tariffs?

Tariffs are taxes imposed by governments on goods imported from other countries. When a product crosses a national border, the importing company must pay this tax, which is typically a percentage of the product's value. For example, if there's a 25% tariff on steel, a company importing $100,000 worth of steel would need to pay $25,000 in tariffs.

The main purposes of tariffs are to protect domestic industries and generate revenue for the government. By making imported goods more expensive, tariffs can encourage consumers to buy locally produced alternatives. This can help protect jobs and industries within the country. However, tariffs often lead to higher prices for consumers, as companies usually pass on the increased costs. They can also spark trade disputes between nations, potentially leading to broader economic consequences.

Perhaps you thought it was another county paying a tax to export products to us... Not quite what the new administration has been transparent on, right?

Impact on Real Estate

Tariff increases would have significant impacts on the US real estate market, particularly in the areas of construction costs, home prices, and overall market dynamics.

Construction Costs

The implementation of tariffs on key building materials would directly increase construction costs.

Specifically:
Softwood lumber imports from Canada, which account for about 30% of US usage, would face a 25% tariff, potentially raising the rate to over 39%. Gypsum imports from Mexico, used in wallboard production, would also be subject to a 25% tariff. Steel and appliance imports from China would incur additional costs.

These increased material costs could add $3 billion to $4 billion to overall construction expenses[1]. Smaller home builders with tighter profit margins would likely be hit hardest, but larger builders would also feel the impact..

Home Prices

The rise in construction costs would likely be passed on to consumers, leading to higher home prices.

This could:
1. Exacerbate the existing affordability crisis, especially for first-time buyers.

2. Reduce the number of new homes built or increase prices for newly constructed homes. 

3. Potentially drive buyers towards older, existing homes, increasing demand and prices in that market segment as well.

Market Dynamics

The broader effects of tariffs on the real estate market could include:
1. Slower housing construction: Higher material costs and reduced profit margins might make new construction projects less appealing to developers, potentially worsening existing housing shortages.

2. Economic uncertainty: Tariffs could lead to lower economic growth, potentially weakening housing demand if there is significant labor market deterioration.

3. Mortgage rates: If inflation escalates due to tariffs, interest rates could potentially increase, affecting affordability and buyer purchasing power.

4. Investment shifts: In times of economic uncertainty, real estate might become a more attractive investment option compared to stocks, potentially supporting property values.

5. Regional variations: Areas heavily reliant on imported building materials may experience more significant effects on their housing markets.

The combination of these factors could create a challenging environment for the US housing market, potentially leading to reduced affordability, slower construction, and increased market uncertainty. However, the full impact would depend on the specific implementation and duration of the tariffs, as well as any potential retaliatory measures from affected countries.

Primary Residence Required:

Denver, Mountain View, Wheat Ridge, Arvada, Douglas County

Investment Properties Allowed: Mountain View, Westminster, Wheat Ridge, Arvada, Douglas County

Total License Cap: Denver no limit, Mountain View no limit, Westminster no limit, Wheat Ridge 2% Cap, Arvada no limit, Douglas County no limit

Limited Number of Days: Arvada 240 Days

Rentals Not Permitted: Parker, CO

For additional locations or details reach out directly to me. Please note that regulations are subject to change and the responsibility of the homeowner to ensure they are compliant with local rules and regulations.

Source: STR Regulations, 2024

As a Denver realtor, it's crucial to keep our clients informed about the latest developments in the housing market, including factors that affect mortgage rates. The Federal Reserve's recent decision to hold interest rates steady and the response from President Donald Trump are significant news items that could impact the real estate landscape.

On January 29, 2025, the Federal Reserve announced its decision to maintain the target range for the federal funds rate at 4.25% to 4.5%. This pause in rate cuts comes after three consecutive reductions totaling one percentage point since September 2024. The Fed's decision reflects their ongoing efforts to balance economic growth with inflation control, as recent indicators suggest that economic activity continues to expand at a solid pace while inflation remains somewhat elevated.

Interestingly, President Donald Trump, who has been a vocal critic of the Federal Reserve in the past, has recently expressed support for this decision. In a surprising shift from his earlier stance, Trump stated, "I'm not surprised. Holding the rates at this point was the right thing to do". This change in tone comes just days after he had called for immediate rate cuts during his address at the World Economic Forum in Davos. As real estate professionals, we'll be closely monitoring how this alignment between the Fed's actions and the President's views might influence market stability and consumer confidence in the coming months.

President Donald Trump, who began his second term on January 20, 2025, has outlined several initiatives aimed at addressing the housing affordability crisis and boosting the real estate market. Within his first few days in office, Trump issued an emergency order directing executive departments and agencies to "deliver emergency price relief," which includes lowering housing costs and expanding supply. 

The Trump administration has identified regulatory requirements as a major factor contributing to the housing affordability issue. In his previous term, Trump reduced regulatory costs by almost $11,000 per household. For his current term, he has proposed using federal land for housing development to help meet demand, suggesting the creation of "zones" with ultra-low taxes and regulations to stimulate small business job creation. 

Trump has also expressed a desire to lower mortgage rates, aiming for around 3% or potentially lower. While the president doesn't directly set mortgage rates, his policies and appointments to the Federal Reserve could influence them. Additionally, Trump has indicated plans to increase the cap on state and local property tax deductions, which were set at $10,000 as part of the 2017 tax law. 

Real estate professionals should be aware that these proposed changes could potentially impact the market in various ways. However, it's important to note that many housing regulations, such as zoning laws and permitting, are controlled by local governments. The federal government's role in implementing significant changes may be limited without cooperation from state and local authorities.

Current mortgage interest rates have seen an uptick in recent days, reflecting ongoing economic uncertainties and market dynamics. As of January 10, 2025, the average 30-year fixed mortgage rate stands at 7.03%, up from 6.95% a week ago. Similarly, 15-year fixed rates have increased to 6.34%, while 5/1 ARM rates have risen to 6.55%.

These rate increases come despite the Federal Reserve's recent rate cut in December 2024. Several factors are contributing to the current rate environment, including inflation concerns, political transitions, and global economic developments. The upcoming Federal Reserve announcement on January 29 is eagerly anticipated by market watchers for potential impacts on future rate trends. 

For prospective homebuyers and those considering refinancing, it's crucial to understand that mortgage rates can fluctuate daily and vary based on individual financial profiles. While current rates are higher than historical lows seen in recent years, they remain within a range that still allows for homeownership opportunities for many Americans.

As we look ahead to 2025, the nationwide housing market is expected to show signs of improvement, offering a mix of opportunities and challenges for both buyers and sellers. Several reputable sources have weighed in with their projections, painting a picture of a market that's gradually becoming more balanced. 

Zillow, a leading real estate platform, forecasts a modest 2.6% increase in home values for 2025, mirroring the growth seen in recent years. They also anticipate a slight uptick in existing home sales, projecting 4.3 million transactions in 2025, up from the expected 4 million in 2024. This suggests a market that's slowly regaining momentum after a period of stagnation. 

The National Association of Realtors (NAR) presents a more optimistic outlook, predicting a 9% rise in existing home sales for 2025. Lawrence Yun, NAR's chief economist, attributes this potential growth to improving job numbers and recent gains in the stock market, which could motivate more Americans to enter the housing market. 

However, it's important to note that these projections come with caveats. The Mortgage Bankers Association (MBA) forecasts a somewhat sluggish economy through 2027, which could impact the housing market. Mortgage rates will play a crucial role in shaping market conditions, with some experts anticipating potential rate cuts in 2025. 

For potential buyers, there's a silver lining on the horizon. Zillow suggests that more inventory should become available in 2025, providing buyers with increased options and potentially more leverage in negotiations. This could signal a gradual shift towards a more balanced market, offering some relief from the intense seller's market we've experienced in recent years. 

As we approach 2025, it's clear that the housing market will continue to evolve. While challenges persist, the overall outlook suggests a market that's slowly stabilizing and potentially offering more opportunities for both buyers and sellers. As always, local market conditions may vary, and it's essential for both buyers and sellers to stay informed about their specific area's trends and work closely with a knowledgeable real estate professional.

As a Denver realtor, I've seen firsthand how going above and beyond when preparing your home for sale can make a significant difference in the market. In today's competitive real estate landscape, and with ample homes for Buyers to sift through, it's crucial to put your best foot forward and create a lasting impression on potential buyers. 

First impression is everything.  

To start, focus on enhancing your home's curb appeal. Mow the lawn, trim bushes, and add some vibrant potted flowers to your front porch. Consider power-washing your driveway and exterior siding to give your home a fresh, clean look. These simple steps can dramatically improve the first impression buyers have of your property. 

Inside, deep clean every nook and cranny, including carpets and hard-to-reach areas. Declutter and depersonalize your space to help potential buyers envision themselves living there. Consider professional staging to showcase your home's best features and create an inviting atmosphere. Remember, a well-presented home can often command a higher price and sell more quickly. 

Going above and beyond also means being proactive in the selling process. Hire a professional photographer to capture high-quality images of your home for online listings. In today's digital age, many buyers start their search online, so make sure your listing stands out with stunning visuals. Additionally, consider creating a virtual tour to give potential buyers a comprehensive view of your property from the comfort of their own homes. 

By taking these extra steps, you're not just selling a house; you're offering a lifestyle and a future home. This approach can lead to more interest, potentially multiple offers, and ultimately, a successful sale that exceeds your expectations.