Traffic picked up this year at the Oakwood Homes sales office for Banning Lewis Ranch, where new homes in the northern Colorado Springs neighborhood start in the mid-$300,000s.

But business is nowhere near pre-pandemic levels or even during the pandemic, when home buying was in a frenzy, Lauren Hanshaw, a new-home counselor at the office, said on a quiet weekend morning last month. She’s comparing it with 2023, which she called “my worst year in 10 years.”

“Traffic is a little bit more pointed. You don’t have as many lookie-loos versus people who are in need of a home,” Hanshaw said. “This year, we’re seeing a little bit more of a calmness because people understand that there’s still a demand, a need for homes and that rates are cyclical. They’ll be able to change that status in a couple years if they refinance their home.”

Since mortgage rates have barely budged even with two interest rate cuts by the Federal Reserve since September, Hanshaw’s belief is that shoppers are more educated. They know they won’t walk out the door with a monthly payment of under $1,800 or $2,000 — a very doable feat when rates were below 4% and even 5% at the Banning Lewis Ranch price point. On Thursday, the average mortgage rate for a traditional, fixed-rate 30-year loan was 6.98%, according to Mortgage News Daily, up from 6.62% a month ago and down from 7.41% a year ago.

But builders like Oakwood are doing what they can to get potential buyers in the door with rate-reduction incentives. Nearby Richmond American Homes is touting 3.999% rates (which increases to 5.999% in year three). Baessler Homes, which builds in northern Colorado, has a deal to get payments to “as low as $1,977” in the first year, and is essentially offering up to $20,000 in concessions (housing payments increase after year one to $2,578 in year four, or a 5.99% rate).

Meanwhile Oakwood, which started the year with some 4.99% offers, now has a 2.99% offer on select houses in Colorado Springs and a 3.99% promo in Denver. The builder is also working with the Colorado Housing and Finance Authority to provide down-payment assistance of up to $25,000, plus below-market rate loans. Most of the incentives, though, are only available to certain buyers and for certain houses.

It’s been working, especially after the pullback in 2023, said Michael Fraley, Oakwood Homes’ chief growth officer.

“When we rolled into 2024, we really started to do what we call builder forwards that were allowing us to get the rates down,” Fraley said. “As we started to introduce these rates, the 4.99%, and in some instances we got down to 4.25%, that’s when we saw many customers. In fact, our number one selling collection is the Ascent Collection in Colorado Springs. We sell about eight of those a month and that’s been consistent.”

The lowest priced two-bedroom, two-bath homes in the Ascent Collection are duplexes — 1,264 square feet and starting at $334,990. That’s less than El Paso County’s median sales price of $370,000 for a townhouse or condo in September.

Oakwood could probably sell more but is only building eight a month in that community, Fraley said. However, he added, “Had we not been able to find a way to get those below-market rates, I don’t think they would be selling as well.”

Concessions aren’t limited to new-home builders. Sellers and buyers often negotiate on the list price. According to the Colorado Association of Realtors data, sellers were getting very close to what their asking price in September — or 98.6% of what they asked for. That compares to June 2021, when bidding wars were common and sellers received 104.4% of their list price.

Of course, now, it’s a different market. According to the Denver Metro Association of Realtors, seller concessions were up in June to 48% of sales, compared to 29.2 percent a year earlier. The average concession was $7,295.

It’s all cyclical, said Hanshaw, who began working in the real estate industry in 2014 as the economy was recovering from the Great Recession.

“When I started in the industry, it was like you could ask for the world — a free basement, free backyard landscaping, free fencing and builders would entertain it to obtain a sale. Then it became a market of, I’m not giving you a refrigerator because the next person that walks in the door will take the deal without a refrigerator,” she said. “Now, I’d say, we’re back into negotiating a little bit heavier to obtain the sale.”

➔ 58% of Denver metro rentals offering an incentives. Free parking, free rent and other concessions for renters are on the rise, according to data from real estate site Zillow. In the Denver metro area, 58% of rental listings in October offered some sort of concession, up from 43.4% last year.

Nationwide, concessions were at a record high with 37.7% of all listings offering some sort of perk, compared with 30% a year earlier. That means landlords are competing for renters, especially after September saw a 50-year high in completed construction projects aimed at renters. Denver metro saw the third-highest jump in share of listings with a concession. >> Details

Sun economy stories you may have missed

➔ How to reduce trash — in outer space? A Colorado company is working on its own WALL-E-like trash compactor for future space habitats. >> Read story

➔ Clean-car sales jump 10% as Coloradans lean on state, federal and utility rebates. EVs, plug-in hybrids, and hybrids made up 38% of vehicle registrations in third quarter of 2024 >> Read story

➔ Denver Health was losing almost 90% of its nitrous oxide to leaks. So it cut the gas. The hospital is switching from centrally piped nitrous oxide — also known as laughing gas — to portable tanks to reduce greenhouse gas emissions >> Read story

➔ Health care prices for Colorado public sector retirees see huge increase for 2025. Two Medicare Advantage plans offered by Colorado PERA are seeing big jumps — 130% for one and more than 200% for the other >> Read story

Election 2024 stories:

• Proposition 130: Voters back a $350M funding boost for Colorado law enforcement >> Read
• Proposition 129 passes: Colorado creates new veterinary position aimed at solving pet care shortage >> Read
• Denver’s 2Q: Voters appear to approve tax increase for Denver Health >> Read

➔ View all of our Election 2024 coverage

Take the poll: Insurance woes

If you missed the reader poll last week, there’s still time! The spike in homeowners insurance costs may have wiped out any savings of a low-interest mortgage. Feeling it? Take the reader poll to help us better understand what’s going on in Colorado ➔ cosun.co/WWinsurance

Other working bits

➔ 185 applications for Colorado’s broadband program. And they’re asking for $1.78 billion, which is more than double what the state received in funding for the Broadband Equity, Access and Deployment program. U.S. lawmakers approved the federal program after realizing in the pandemic that some places in America have mediocre or nonexistent internet service.

Colorado received $826.5 million in BEAD funding and opened its program to applicants earlier this year. If all projects were approved, that would help 111,896 homes, schools, businesses and community organizations, according to the Colorado Broadband Office, which is overseeing the grants. More than half of those locations — approximately 67,559 — are considered unserved with no broadband internet service. The Broadband Office plans to review every application in the coming weeks, which will take up to 160 days. >> Details

• Even more broadband money? BEAD doesn’t do everything though. So, the Broadband Office proposes taking the High-Cost Support Mechanism (HCSM) Fund, which is collected by telephone companies to provide universal service, and create the Advance-Local program. The proposal would use 60% of the $14 million to award middle-mile projects, which are the fiber lines connecting big pipes nationwide to the local provider’s. The remaining 40% would be for grants to local internet providers and short-term construction. At least that’s the plan. The office is open to feedback.
• $11.8 million more going to southern Colorado. After the state’s awarded $113.5 million from the federal Capital Projects Fund for 27 projects statewide last January, more funding arrived. That’s now been granted to the Southern Colorado Economic Development District in Crowley County to connect 1,753 homes and businesses. Combined with an additional $2.8 million in public/private matching funds, the Crowley community would invest $8,316 per home or business. SCEDD earlier received $12.5 million to improve infrastructure in Bent, Otero, Pueblo and Lake counties. >> Details

➔ Send a question to the EEOC. Any question is allowed, according to the U.S. Equal Employment Opportunity Commission, which is hosting the annual end-of-the year webinar Nov. 12 at noon. Will the questions be answered? That’s unknown. But questions need to be asked during pre-registration for the 90-minute session. >> Register

Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww

Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

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