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Deals Going Sour In Competitive Denver Housing Market
Rents are increasing, house prices are increasing, there are many more buyers than available properties. Oh, my! Just when you thought the real estate market couldn't get any crazier in the Denver area, April brought a record percentage of deals that fell through.
Buyers are getting frustrated with the process because so many listings (especially houses under $300,000) get multiple offers. It's become common to offer higher than asking price. Sometimes WAY over asking price. When the appraisal comes in lower than the offer, buyers are sometimes unable to come up with the difference and the whole deal falls through.
It's also becoming more common to see houses that need repair, but the sellers won't budge on inspection issues and have a "take it or leave it" attitude knowing full well there are buyers who will take it as-is. While it's not so great for any buyer, that makes it especially difficult for FHA buyers who are bound by a rather stringent set of restrictions concerning the quality of the homes. In some ways, FHA appraisers have become inspectors by not allowing the appraisal to "pass" FHA standards.
The Denver Post wrote an article about this situation, but it didn't answer the question in my mind. Isn't the price someone is willing to pay indicative of the value of the item being purchased? If I have an antique watch for sale for $2,500 and someone offers me $3,000 the watch instantly becomes worth $3,000. Now I'm not saying that appraisers should just accept any offer on any property and declare that "yes, that's the value", but I have to wonder if appraisals based on data that is 6 to 12 months old is truly valid in a market that is growing at the rate we are.
Randy Connell is a Denver, Colorado real estate professional specializing in first time buyers and investors in small multi-family properties. Randy works out of the EXIT Realty Cherry Creek office and is a part of the Colorado Generation Realty team. Randy is an investor as well and has owned multi-family properties since 1984.
If you're interested in buying or selling property in the Denver area please call Randy at (720) 998-4964 or visitwww.BuyAndSellDenverProperty.com
With more than a decade of experience, LaDawn enjoys educating first time home buyers, working with the 55+ community, relocation clients, sellers who want to downsize, step up purchase or anything in....