Denver’s record-low inventory has changed the game
We’re in uncharted territory in the Denver housing market with record-low inventory paired with the uncertainty as the pandemic begins to lift, low interest and unemployment rates. It’s a recipe that has turned Denver real estate into a game of speed that makes real-time data a must.
The average days on market for Denver metro single-family homes stood at 18 days in 2021 through March, according to the Denver Metro Association of Realtors April market report. That’s 50 percent less than the same period in 2020! This has pushed home prices to new all-time highs each month. The average close price in March 2021 of $674,990 represents a 19.3 percent jump from March 2020.
Source: Denver Metro Association of Realtors
This is a pressure cooker pushing prices, demand and activity higher, which means speed and real-time data is of the essence to operate smartly in this market. The speed of the market is too fast.
This means that buyers and sellers need to be using real-time and current data when making offers and setting listing prices. I’m seeing this everyday. I had a recent Washington Park property go under contract at over $300,000 over list price! That gives an idea of just how fast the market is moving (and we used real-time stats to price that one!).
Reach out to me at firstname.lastname@example.org for expert advice on finding success in the Denver market.
A fellow milehimodern broker had a recent listing of a similar size as one of mine that went under contract, and he called me to get some perspective on pricing. Based on my feedback, he changed his recommended list price from $1.9 million to $2.1 million. It went under contract at $2.2 million!
Automated valuation programs such as Zillow’s Zestimate are missing the mark, significantly. I see other agents in the field making the mistake of making too-low offers and mispricing homes. Another milehimodern listing in Sundance Hills in the Cherry Creek School District, built in the 80s in a neighborhood where $850,000 was the price point, went under contract recently at $1 million. The very next comparable home that went under contract did so at $1.5 million
How to navigate the crazy market
It’s a crazy market, clearly, but buyers and sellers just have to adapt to the reality on the ground. That means moving quick, using the most up-to-date data possible, presenting as all-cash buyers whenever possible, and working with connected, knowledgeable agents.
For buyers entering the market at a budget of $750,000 and below I’m recommending they check out new construction, considering townhomes and looking farther afield. With new construction, buyers can get a property under contract without a bidding war, as many new-build homes are not sold through the MLS. Also, builders typically set their price — it’s not subject to a bidding war.
Sellers, be sure to work with an agent who is pulling pending stats, networking with their professional colleagues, and thinking strategically about pricing and timing. If you just look at recently sold properties, you’ll significantly underprice, and likely leave thousands of dollars on the table.
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