The local real estate market kept trucking along at an amazing pace through the first quarter of 2013! It’s hard to believe the last time we had this few properties (6,700) on the market were the days when Back to the Future was the top grossing film of the year, New Coke was launched (and failed), and the Titanic wreckage was found. The average home was valued at a whopping $89,000 (the price of a new Range Rover) and interest rates were at 13% (not even my credit card is that bad)! What year was this? 1985! How times have changed! Also consider that we had 1.5 million residents in the Metro area in 1985 compared to 2.7 million residents now. It’s no wonder builders can’t keep pace with our explosive population growth!
For the first time in many years, the number of properties going under contract (approximately 7,500) exceeded the number of properties listed and available for purchase (6,700). This has led to extreme competion in our marketplace with 42% of homes and condos selling AT OR ABOVE asking price. In fact, Denver is one of the top performing “flash markets” where properties sell within 24 hours of being listed (Denver Post). 6% of homes sell within 24 hours of being listed and 35% sell within a week. The average days on market has fallen 35% from last year as well. Obviously this means big appreciation gains for homeowners!
The average single family home appreciated over 12% from the same time last year and the average condo appreciate nearly 21%. I ask the question, how long will it take our market to overcome a 28 year low of inventory?
For buyers, the days of low-ball offers and negotiating heavily on purchases are over, at least for the time-being. Fewer than 11% of properties sell for 5% or more under asking price. As a buyer, if you are looking at a home that was just listed you likely won’t stand a chance of purchasing that home unless your offer is at list price or above. And be prepared for bidding wars on most newly listed homes (Denver Business Journal
). This is just a reality buyers face, and remember as a buyer you are always
protected by the appraisal provision in a contract: If the property doesn’t appraise for the contracted price, you don’t have to buy it!
Sellers, enjoy the ride while it lasts, but remember you need to price your homes realistically or they won’t appraise even if you have a buyer on the hook. Then it’s back to square one!
As always, I am up-to-date on the latest market happenings. Please don’t hesitate to contact me whenever you or someone you know is considering buying or selling a home!