It’s Still A Sellers’ Market
Folks, it is a crazy sellers’ market out there. My sister, with her NYC slang would say it is Cray. Seriously, however you state it, the market is heavily favoring sellers with homes continuing to receive multiple better than full price offers. The usual enticements that home buyers were offering in 2016 to stand out, these are all standard these days. More on what buyers are giving up in a moment.
Why Is It A Sellers’ Market?
Good question. Simple answer is that we have lower inventory than usual combined with a large influx of population. People are coming to Colorado for lifestyle and jobs. We may or may not be in favor of legal marijuana, but honestly, it isn’t a negative when it comes to Colorado home values. It can be a negative for landlords who are not careful and selective in tenants. I’ve blogged on that – see link at bottom. Be careful in vetting tenants!
But back to the question at hand. Jobs. We have great opportunities in the region. Twitter, various online Apps, Google, new startups. Seems everyone in the Tech universe wants to be here. Probably part of what is contributing to ten new arrivals in Boulder County daily. That according to a recent Daily Camera article.
Employment is booming. It’s not uncommon to see “help wanted” signs around town. The secret seems to be out, Colorado is a great place to live. This time last year, I was at an economic forum about Boulder. Everyone was asked to stand. Then, those born outside of Colorado were asked to be seated. 360 out of 400 people, no joke, sat down.
Next the hosts asked, anyone not born in Boulder, please be seated. There were four (4) people left standing. Boulder Colorado is a city filled with people from all over the world who want to live here. And it is really impacting home values and the current Boulder Sellers Market.
It Isn’t Just Boulder County
The hot spot these days? Berthoud. Think small little farming town. It used to be bisected by Hwy 287, but that was moved decades ago. Since then, this sleeply little town has blossomed. There are estimates of thousands upon thousands of new homes coming to town. Why? The town sits at a crossroads. Drive 30 minutes in any direction and you arrive at a booming job market. Loveland, Boulder, Greeley, Fort Collins.
Denver Market Surging
The Denver metro housing market continues to boom. I just listed and sold, for well over asking price, a sharp two bedroom condominium. We followed the new approach for marketing. Teaser advertising on Facebook before it hit the MLS, followed by entering the market days before showings started. Of course, I had agents requesting an exception. We held off on showings until the weekend, then managed 23 in the first day alone.
There just are no homes out there. And as the offers came in, we saw buyers offering all the extras – I mentioned above I would address this. Good place to discuss. Last year, you might see one of these items on a contract. This year? Many buyers offering all of these concessions.
- Waiving the inspection and agreeing to take the home As-Is. Not at all uncommon. Next up, some buyers say they are merely looking for health and safety issues, but will not ask for repairs.
- Agreeing to bring extra cash to cover the difference between the appraised value and the contract price. Some buyers might offer to cover a gap of $3,000, 5,000 or 8,000. Others are just waiving the appraisal altogether.
- Offering to pay for title insurance. This one is starting to happen this year. It’s a big deal, because if the buyer orders title, it saves the seller the cost of the policy.
- Free rent back. Last year, this was an original bargaining tactic. This year? Standard Operating Procedure. Not uncommon for a seller to stay one or two months in their home for free after closing!
- Better than full price. Very common in today’s market.
- Multiple Offers. Very common in today’s market.
It is the Wild West Out There
Of course, I do hear folks, now and again, say, “well, we are not competing, we’ll wait for the market to calm down.” This happens a good deal – folks saying that, not the market calming. And the catch 22 is that the last time the market cooled significantly, the Great Recession in 2008, buyers dried up dramatically.
Where is the market headed next? I don’t have a crystal ball. But based upon the excruciatingly low home inventory, still solid home mortgage rates and ever increasing area population, I don’t see the market changing dramatically.
Condos and Town Houses Needed
What will impact the Sellers’s Market, imho, will be the arrival of new condo stock. Because of well intentioned but harmful Condo Defects legislation, the construction of new attached dwellings has pretty much ground to a halt. In place of affordable attached dwellings? Very expensive monthly apartments for rent.
My opinion, these will begin to convert to condos seven years after construction. That’s also 7 years until the statute of limitations built into the Construction Defects rule expires. I’m already noticing a lot of apartments built with individual electric meters. These are units that prepped for the future. Easily converted to condos some day in the not so distant future.
Look, the Construction Defects rules are definitely impacting the marketplace. Check out the much ballyhooed but delayed Superior Town Square project. We – Realtors – should be selling this by now, but instead the project hit a delay and housing units are only now under construction. I think they are building rentals to start. You can read about that project below.
So What’s Next?
Lunch. I’m hungry. No, seriously, what’s next? If you are contemplating the sale of your house (or condo or town home or chunk of land) please give me a call. I would be delighted to discuss your situation and help you get top dollar. I have a great marketing program – yes marketing still makes a difference. That condo sale I was talking about earlier? In the same complex, there is a less expensive unit just sitting the market. Poorly marketed. So, yeah, good marketing goes a long ways.
Or, if you are wondering about this from the perspective of a home buyer, please also give me a call. I have helped clients get under contract with NOT the best offer or terms. How? Good negotiating skills. Of course, if you are willing to make the winning offer to start, that is also very helpful. LOL.
That’s it. Check back in the future for new blog posts.
Recommended Blogs from Realtor Bob Gordon
- Fear and Loathing when it comes to marijuana tenants impact on housing
- Superior Town Square project breaks ground.
- Home Buying Top 10 List
- Home Sellers
About the author
Bob Gordon is an avid blogger, hiker, skier and snorkeler from Boulder Colorado. Assisting clients with the sale of and purchase of real estate since 1995. Pictured here with the ultimate #Selfie snorkeling in Maui. Please give me a call and the opportunity to assist you and your family. I’m a full time Realtor with a passion for what I and great results for clients.