After a quiet summer in Colorado’s housing market, interested buyers are emerging from the sidelines into a buyer-favored market.

While this new buyer’s market has been slower in reaching the Western Slope’s mountain resort towns, some real estate agents are advising that first-time homebuyers take advantage of the cooling temperatures and start looking — it’s likely they’ll find better conditions than what they’ve seen in the last five years.

“After a long seller-dominated run in Colorado, the housing game shift is a welcome change for homebuyers who now find themselves holding the cards in what has become one of the most advantageous buyer environments in years,” the Colorado Association of Realtors said in October’s monthly report. “Today’s buyers are armed with far more options, relaxed timing and more overall control in the process.”

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Even with higher interest rates, the consensus among Realtors in Colorado is that buyers have more leverage and choice than they have in recent post-pandemic years.

“If there are people that are renting, and they’re trying to plant their roots, now is the time to be getting serious,” said Monica Anderson, chairwoman of the Grand County Board of Realtors.

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Are mountain towns seeing a buyer’s market?

Depending on where you land in the mountains, buyers might find a completely different market.

“Resort markets — like in Aspen, Snowmass, Vail, Telluride — are a bit different than your regular hometown USA market,” said Mark Lewis, a real estate broker at Aspen Snowmass Sotheby’s International Realty. “We have witnessed a slight slowdown in Aspen and Snowmass, but yet our prices continue to rise, and our price per square foot continues to rise. … I definitely wouldn’t say it’s a shift to a buyer’s market.”

Lewis added that Aspen’s modest increase in inventory, however, gives interested buyers more choices than they’ve had in the last few years.

Jennie Longville May, a broker associate with Berkshire Hathaway HomeServices in Eagle County, said whether or not buyers hold the advantage can vary based on Eagle’s many “sub markets.” The county’s resort community — where inventory is lower and buyers are generally cash-rich — still favors sellers, whereas pockets of the valley floor are seeing a weakening of seller dominance correlated with higher inventory.

Meanwhile, the market in Grand County has been trending toward a buyer’s market, albeit at a slower pace than what Front Range markets are experiencing, Anderson said.

She added that “mud season” — the period of time after Labor Day where there’s little-to-no fire activity and resorts are closed down in preparation for the winter ski season — is typically a slow time for buyer activity. This year, however, buyer activity has ramped up for homes in mid-level price points between $500,000 and $1 million.

“In my business, I’ve been busy with buyers within that price point. My last few offers have been multiple-offer situations,” Anderson said, though she added that Grand’s market is still seeing longer-than-average days on the market, which has caused prices to soften depending on the location and type of home.

Anderson and Lewis said some properties in their respective regions are seeing price reductions and buyer incentives as sellers are forced to get creative. The Eagle/Vail market is also “seeing homes sit on the market for a long time,” leading to price reductions in some of the non-resort pockets of the county, according to Longville May.

Advice for first-time homebuyers: Start early, do your research, be realistic

A large portion of people joining the market search for homes this fall are investor buyers, at least in Grand and Pitkin counties’ corner of the mountains. The decreased competition from other buyers could serve as a wake-up call for renters who’ve been sitting on the sidelines.

“(Investor buyers) have been sitting and patiently watching the summer market and looking for those sellers that are maybe ready to just be done, and looking for a little more motivation on price,” Anderson said. “That’s my big push, is, ‘Hey, this is the time.’ If you’re a first-time homebuyer, try to get in now. You’re really not going to have the competition like you had when the floodgates opened after the pandemic, where you’re getting 20-30 offers over a weekend.”

The Vail Daily asked real estate agents across three Western Slope counties for their best advice for first-time homebuyers. Here’s what they said:

Find a trusted local lender

A good lender can make all the difference in a home search. For aspiring homeowners who don’t already have one, the best place to start is by asking a trusted local Realtor to recommend one.

“We have several amazing lenders in the area that I know and trust and will do a great job making sure that you get all of the benefits … from those programs” Anderson said.

Check if you qualify for assistance

One of the best places for first-time homebuyers to start looking for assistance is with their local county’s housing authority. Interested buyers can fill out an application to see if they qualify for downpayment assistance programs or first-time homebuyer loans, in exchange for completing a first-time homebuyer course.

Reaching out to individual cities or towns within a buyer’s area of consideration could also help identify affordable housing communities and programs within city limits, Anderson said. 

“Get on their list for affordable housing. Once you’re on that list, whenever something releases, you’ll get an email and you’ll be one of the first to know what’s available,” she said. “Ask those questions, find out what’s coming down the line.”

Examples of state and local housing assistance organizations recommended by real estate agents include the Colorado Housing and Finance Authority, Grand County Foundation, Eagle County Good Deeds Program, Aspen-Pitkin County Housing Authority and Mi Casa Avon. Federal Housing Administration loans also offer specific programs to first-time homebuyers.

Another little-known trick that many buyers don’t know, Lewis said, is that some 401(k) plans allow clients to take out loans for a down payment.

“The properties are so expensive that people are having a hard time coming up with the down payments, so some of these 401(k)s allow for borrowing against them,” he said.

Don’t be afraid of deed-restricted properties

Because Colorado’s average interest rate is around 6%, Longville May said buyers are more price-sensitive than they have been in previous years. Being open to deed-restricted homes can widen the pool of potential homes for interested buyers, especially the more affordable homes in the region. 

Many buyers, however, can be hesitant to explore that market due to a lack of information on what deed restrictions actually mean. This is where local lenders can come in and help buyers find something that works for them.

“First-time homebuyers need to not be frightened or overwhelmed by the opportunities of deed restricted properties,” Longville May said. “There is a plethora of opportunities in our valley that I think buyers are missing (because) they’re frightened by the word ‘deed-restriction.'”

Start early

Anderson’s advice is this: “get your pre-approval in place, find out how much money you can put down and what your monthly max is,” and “start really, seriously, looking at the market to see what’s available and try to get in now.” Once you know your purchase power, the search becomes less daunting.

“If there are people that are renting and they’re trying to plant their roots, now’s the time to get serious,” Anderson said. “Rates are still a little higher, but once they get down a percentage point or higher, that’s when you refinance, and you get your mortgage payment down that way.”

Lewis said Colorado’s markets will likely never see 2-3% interest rates again, so those waiting for a miracle will be left waiting longer than they can afford.

“There’s a lot of people on the sideline because of interest rates,” he said. “Waiting, most of the time, will cost you more money in the long run … so the earlier or the sooner that you can get in, even if you’re paying a little bit higher interest rate, at least you’re in.”

Regardless of whether people are looking for homes now, next month or in the next five years, Anderson said it never hurts to call a Realtor anyway and start the process. For those thinking of home ownership later down the line, Lewis and Longville May agreed that building good credit “well in advance” is the next-best thing.

Don’t make assumptions

“People just immediately assume … ‘I don’t make enough money.’ I think the way to get around that is to speak to a lender. Just have a conversation. Let them run the numbers for you,” Anderson said. “A lot of people are paying rent, if not more or equal to what they can find through some of these down payment assistance programs and low income housing options.”

“If you’re paying over $2,000 a month for a rental, you should really be paying yourself and figure out how to get into a home,” she added.

Longville May said one of the fears she hears most often from interested buyers is that they don’t have a high-enough credit score, which negatively affects their interest rate. Rather than treating this as a roadblock to connecting with a Realtor, Anderson said they can often have “tips and tricks” to help clients boost their scores.

“Talk to a local lender and just get prequalified. I think you’ll surprise yourself,” Anderson said.

Be realistic about location

Many resort communities on the Western Slope are pricing out first-time homebuyers as entry-level homes reach prices past $1 million. Although not many buyers’ first choice, looking for a place farther downvalley is often the more affordable option.

“People will come into my office and say, I want to buy a home, but I want to be just in this little pocket here,” Longville May said. “I would say, expand your horizons and be willing to go further out of the resort communities because you’ll get more opportunities.”

In Winter Park, some entry-level homes are reaching prices around $1.2 million, Anderson said. Interested buyers will often find more inventory and newer construction by looking in neighboring municipalities instead.

“A lot of people don’t want to settle just for a condo, (but) there’s very, very few single-family homes in the affordable housing programs,” Lewis said. “So if somebody wants a single-family home, they’ve got to go downvalley.”

Even though options may not be perfect, the one thing all three real estate agents agree on is that it’s better to start the search for homes now than to wait for change that may or may not come — or may get worse.

Even if interest rates were to fall to 5% again, the rush in competition and surge in prices might be enough to make you wish you hadn’t waited.

“You’re probably not going to get everything you want on the first shot, but what you’re going to do is create an opportunity for long term planning,” Anderson. “In this market, if it’s perfect, you’re paying a premium.”