5280 Magazine published an article this year titled Everything You Know About Denver’s Real Estate Market Is Wrong. The author, Natasha Gardner, interviewed a variety of local real estate professionals, and covered some popular topics such as rising interest rates, low inventory, market timing and new construction, among others.
The article was fairly detailed. Here are some key take-aways:
Low inventory is in a loop
Many home-owners who would consider down-sizing or upgrading, choose to stay put to avoid the challenge of buying a new home in Denver’s competitive market. As more people enter the City, this is only increasing demand- and prices- for the few listings that are currently available.
Target the “Slow Season” to buy
The Denver real estate market traditionally heats up in the summer and cools in the winter. While this has changed somewhat with historically low inventory levels, it’s still beneficial to buy in the winter and sell in the summer.
The article also noted that some neighborhoods (such as Park Hill) never seem to lose demand!
Don’t Count On Rising Interest Rates to Stall the Denver Real Estate Market
Although the Federal Reserve raised interest rates in both December and March by 0.25%, some mortgage analysts note that this may not have a big impact on Denver’s competitive market. While a change of 1% in interest rates usually affects a buyers’ purchasing ability by about 10%, buyers shouldn’t expect a market crash based on the moderate rises we’ve seen.
Use The Homesnap App
I also use this app as it gets its information directly from the local MLS… Honestly, nearly anything is more accurate that Trulia and Zillow, neither of which have up to date information.
Historical Denver average of homes sold in the month of February: 14,308
Number of Denver homes sold February 2017: 3,878
Up & Comers
These neighborhoods were identified as areas of rising popularity, and price point:
DOM= Days on Market
Median Sale Price: $295,000
Price Change: +18 percent
Median DOM: 6
Median Sale Price: $298,700
Price Change: +12.72 percent
Median DOM: 7
Median Sale Price: $256,000
Price Change: +11.3 percent
Median DOM: 6
Median Sale Price: $264,500
Price Change: +16.52 percent
Median DOM: 5
Use a Good Agent
This is sort of subjective, but in my experience a “good agent” is one who will do whatever it takes to get a property under contract. I’ve gotten buyers under contract in spite of bidding wars. It’s not always about having the highest offer, sometimes what’s really important is making the listing agent feel confident that you are the offer that will close on time, and without issues.
Consider Using a Backup Offer
The article notes that 1 in 5 offers fell out of contract last lear during the month of February. While I feel 1 in 10 may be a more conservative number, the fact remains that making a backup offer can be a great way to get a property under contract off you keep coming up in second place.
Beware of Buyer Fatigue
Lots of buyers quit trying to buy after losing out on multiple bids during the summer… I have not experienced this personally
Assume the Seller is Listening
Colorado is a single-party consent state when it comes to recording conversations. So, anything potentially damaging should be said outside of the home you are considering making an offer on.
The Luxury Market is a Buyer’s Market
Shopping for a home is much easier at $1,000,000 and above. In my experience, the pressure starts to let off once you cross 500-600k.
The author notes how your housing preference may change after viewing properties in the neighborhoods you think you want to buy in. Here is what they said verbatim:
“Can’t find the perfect home in your first-choice area? Try, try again.
You are retired and settled in another state but desperate to live near your grandkids (and your kids’ place doesn’t have a grandparents’ suite). You start in Harvey Park, where there are actually homes for sale. » You decide you want something smaller—and closer to downtown, where there are restaurants and activities to fill your newly clear social calendar—so you look in Sloan Lake. » If you’re going to pay that much for a condo, you think, why not be at the center of things? You buy near Union Station in LoDo.
You’ve been rental-hopping for years—near Colfax Avenue in Capitol Hill, then Uptown, then City Park West. South Park Hill’s tree-lined avenues are appealing after dealing with city-center traffic. » But the historic area is expensive, so you look in North Park Hill. » And then in Northeast Park Hill. » Your agent points out that you could get more house in family-friendly Stapleton, which is right next door. » You want an older home, though, so you head back down toward Colfax—but this time go to Aurora.
You dream of raising kids on the charming blocks near Washington Park’s namesake green space, but you want to be able to afford retirement before you are 80. » Platt Park is appealing, but you need an extra bedroom for visiting family. » You find a place in University Hills but get outbid. » You buy in Littleton.”
Consider Buying New
New construction is on the rise in Denver, just not as fast as the population growth. While the newer communites such as Lowry may not offer some of the historic neighborhood aesthetic, it could offer the space you are looking for.