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Everything You Know About Denvers Real Estate Market Is Wrong
From 5280 May 2017
By: Natasha Gardner
Well, maybe not everything. But thanks to scant housing inventory, massive population growth, and still-low interest rates, buying or selling a home in—or even near—the Mile High City means stepping into a fierce game with ever-changing rules. Here’s how to play the market right now.
Let’s start with the good news: If you own a house in Denver, its value probably has gone up in the past year. If you sell that home, you’ll likely pocket some cash. And if you’re looking to buy here…well, at least you’re investing in an appreciating market. (Median home-sale prices are increasing more than 30 percent year over year in some areas.) Plus, the market is so hot that real estate agents can make solid arguments for why purchasing a property in nearly any Denver neighborhood is a good idea.
But all that buying and selling means the metro area’s housing market is a different beast today than it was a decade ago. Denver once was known as a place where you could buy a stand-alone home with a yard, in a central neighborhood, for less than $350,000. Today, that house is real estate’s version of a pink unicorn. When one is spotted, there’s a frenzy of offers—many above asking price—with cash-only options, rent-back promises, appraisal waivers, and sometimes more bizarro proposals, like the buyer who suggested adopting a seller’s cat because the seller was moving out of the country (the buyer still didn’t win the bid).
To make sense of these changes, we asked more than a dozen real estate experts—with over 200 years of collective experience—for the new rules of surviving (or even thriving) in Denver’s real estate market. Along the way, we discovered a must-have app for house searching; compiled top neighborhoods for a variety of buyers; and gleaned advice on learning to love the home you can afford. Because, in this climate, the most difficult part might simply be getting into the game.
The Fine Print
Median sale prices for attached single-family and detached single-family homes, percentage changes in those prices (year over year), and median days on market (DOM) are through January 2017 and were provided by REColorado, via agent Jill Schafer, with Kentwood Real Estate; neighborhood boundaries were determined by Schafer.
Rule No. 1
Understand the impact of record-low inventory levels.
Like your favorite slopeside wipeout GIF, the Denver metro area is stuck in a loop: Lots of people want to buy homes. Prices rise because there isn’t enough inventory for all the new transplants, empty-nesters who want to downsize, and millennials having babies (see Rule 13 for more on our starter-home and condo shortages). Homeowners see the appreciation and consider selling…until they realize they won’t be able to afford to buy another home in Denver, so they stay put. Inventory stays low. Demand builds, which leads to—you guessed it—prices going up even further.
Rule No. 2
Target traditionally quiet times to buy and sell in what’s now a yearlong season.
The ups and downs of the market used to be predictable. Inventory would start to increase when tulips began blooming in the spring. By midsummer, buyers and sellers would be in a furor. And it would all wind down when the Broncos kicked off and snow started piling up in the mountains. Not anymore. “The selling season was off to an early start this year,” Kentwood City Properties’ Brigette Modglin says. “Inventory and sellers picked up once February hit.” For some buyers, looking at properties during quiet times (holidays, snowstorms, sweltering summer weekends when Denverites flee to the high country) is a strategy. “The smartest time for someone to purchase last year was during the election,” says Vivi Gloriod with Cherry Creek Properties. “Everyone was watching news and looking at Facebook instead [of buying].”
My name is RaNae Urso and I specialize in residential sales and buyer representation in the Denver Metro area. I have been in the real estate business over 14 years of my 30 years in Colorado. I enjo....
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