Mark McClung

Denver Real Estate Market Update – June 2017

Hot summer, hot market.

Curtis Park, Denver | Love Your Hood

It’s hot, there aren’t a lot of homes available (some even without air conditioning), and buyers are frustrated. Sellers are continuing to make the rules and buyers are getting left out in the heat. Sound familiar?

Home prices are breaking records and would-be sellers are more worried about their replacement purchase than selling their current home. So, they opt to wait it out. The result: no inventory, increasing home prices, and homes continuing to fly off the shelf.

Inventory, yep I said it again

Average Months Housing Inventory Denver County 2007-2017

A quick glance at this chart doesn’t reveal much. From 2016 to 2017 the inventory numbers ticked down from 1.5 to 1.4 month. Not a huge surprise if you’ve recently been shopping for a home (you already know there aren’t many options out there). What caught my eye were June’s inventory numbers compared to 2016. The active (available) number of homes for sale in June 2017 compared to June 2016 was down 7.3% while the number of sold homes for the same time period went up 3.7%. That equates to 1.3 months of inventory for June which is putting pressure on our 1.4 month average for 2017. No surprise this is pushing median sale prices to record highs. (more…)

The Top Ten Denver Neighborhoods of 2016 – Second Quarter Update

Second quarter 2016 was an eventful one for Denver real estate. The Brexit gave us lower-than-ever mortgage rates and as the second quarter ended, we saw more home inventory than we have had all year. As a result, price reductions increased and it seems like buyers may have more choices and power. But not only did June give us more active and new listings, it also set the record for days on market, average and median sold price, number of homes that sold, and sold volume.

We could be on our way to a much needed market correction.

The 10 Most Expensive Denver Neighborhoods

Sun Valley, Denver, Colorado

When compiling the 10 most expensive Denver Neighborhoods, we found it valuable to include a list based on the greatest price per square foot and another based on highest median sales price. When you think Hilltop neighborhood you think of large houses and expansive lots. While this neighborhood boasted the highest median sale prices in the city, it doesn’t have the highest prices per square foot. Instead, if you want to know the most expensive prices per square foot of real estate, check out the second list. Here you’ll find properties in more densely populated neighborhoods.  While the properties may not be as large, each square foot of them is more pricey.

Based on 2nd Quarter 2016 Median Sale Prices

It’s no surprise to see the top eight neighborhoods on the most expensive neighborhoods based on median sales price list! Now we know what everyone is talking about when they say Denver is expensive! What IS a surprise is to see Sun Valley on this list. With one purchase in April (and the whole year), it made its debut but you probably won’t see it on this list again.

THE 10 MOST EXPENSIVE DENVER NEIGHBORHOODS

(Based on Median Sale Price)

Rank Neighborhood

Median Sale Price
(2016 Q2)

Price per Sq. Ft.
(2016 Q2)

1

Country Club

$1,224,348

$381

2

Hilltop

$948,013

$307

3

Cherry Creek

$823,548

$359

4

Washington Park

$795,867

$346

5

Belcaro

$741,551

$327

6

University Park

$716,278

$290

7

Cory – Merrill

$702,328

$267

8

Wellshire

$669,917

$257

9

Washington Park West

$592,622

$307

10

Sun Valley

$589,945

$307

Denver County

$375,848

$257

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Should I Represent Myself When Buying or Selling Real Estate?

Admittedly, before venturing into real estate as a profession, selling a home without representation crossed my mind a few times.  Now, I frequently take calls about For Sale By Owner (FSBO) listings and inquiries on properties where the buyer only wants to talk to the listing agent because they are representing themselves. Having peeked behind the curtain to see the intricacies of the real estate transaction, I’m glad to have hired a Realtor® to guide my way to the closing table.

Selling Your Home without a Realtor®

When selling your home, the “commission carrot” can cloud your judgement and tempt you to go it alone. A good real estate broker will provide value that far exceeds the fee charged at the closing table. Here are the three main steps in the home selling process where utilizing a professional can most benefit you:

Determining Price

The biggest mistake owners make is setting the listing price incorrectly. They usually base their pricing on the internet, typically by Zillow’s Zestimates. Big mistake. Nearly 25% of Zestimates are off by more than 10% from the sale price. Zillow even states in the fine print that these estimates are a starting point for determining value. Overprice your home, and the phone might not ring after your listing goes live.  Underprice it, and you may leave money on the table at closing. 

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How to Interview and Hire a Real Estate Agent

According to the National Association of Realtors® (NAR) 2012 Profile of Home Buyers and Sellers, 66% of all buyers hired and interviewed only one agent. There’s nothing wrong with hiring the first agent you meet, but make sure you ask the right questions and more importantly, that you get the right answers. We’ve compiled a list of questions to ask any potential real estate suitor to help get the conversation started.

How to Hire a Real Estate Broker

Why Are You in Real Estate?

It has been proven time and time again that to be good at what you do you have to love what you do. This is a great conversation starter, and it lets you get to know the agent and their background that led them to their real estate career. If the agent deflects and just wants to ask his or her questions about your price range, number of bedrooms, location, etc., then they probably think they have you in the bag. Business is about relationships, you will be spending a lot of time in person and on the phone with this agent over the next several months. Personality conflicts will add a barrier to effective communication and can make it hard to respect the real estate advice that you receive.

Are You Full-Time or Part-Time?

You don’t hire a part time lawyer, surgeon, dentist, or pilot so why would you hire a part time real estate agent? To be great at a trade you need to be 100% invested in that trade and practice it day in and day out. When was the last time you re-programed your all-in-one TV remote from memory? Chances are if you don’t do it multiple times a week you will have to reference someone for help.

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As a Buyer, What Can I Expect at the Closing Table?

You’ve negotiated a successful offer, resolved all the inspections items, and done your due diligence.  You are so close to ownership that you can feel the new keys in your hand.  The only thing standing between you and moving into your new home is the closing table.  Whether this is your first real estate closing or you are a seasoned veteran, the following will point out what to expect in a real estate closing in Colorado.

What to Expect at Closing

PRE-CLOSING ITEMS: 12 TO 48 HOURS OUT

Depending on how condensed your contract period is, you may receive the final settlement and HUD-1 statements with enough time to review them with your lender and real estate broker.  It isn’t uncommon, with the volume of new mortgages and refinances, to receive these documents just hours before closing.  Either way, you will have time at the closing table to have all your questions answered about the details and account for every penny of the transaction.

Prior to your closing, you will do a final walk-through of your new home with your broker to inspect its condition.  This is your opportunity to ensure all agreed upon inspection items have been completed, the condition of the home hasn’t changed from when you went under contract, and all contractual items are in the home.  The final walk-through is not an opportunity to re-inspect the home. (more…)

Home Financing Options Explained

Buying a home can be one of the most exciting (and costly) purchases you will make during your lifetime.  One of the most important steps in the process is determining how much you can afford.  Yet, many people wait to secure financing until it is absolutely necessary.  In a competitive housing market, having your financing in place before you start your home search gives you the ability to place an offer immediately after viewing the home of your dreams and making that offer stronger.  It also allows you to focus on the more enjoyable decisions like choosing a neighborhood.

Home Financing Options

PRE-QUALIFICATION VS. PRE-APPROVAL

Pre-qualification and pre-approval are two common words thrown around in the mortgage industry.  Pre-qualification is an unofficial estimate of how much you can borrow and repay for your home purchase.  The amount lending institutions will pre-qualify you for is derived from the information you provide on your finances, credit history and income. Obtaining Pre-approval requires you to submit financial documents, such as tax returns, business licensing, and bank statements.  Lenders will analyze the documents, run credit checks, and verify employment.  The pre-approval process verifies you have the ability to repay the amount for which you are approved and carries more weight when you submit an offer to purchase a home.  Although it takes more steps to obtain pre-approval, it verifies to the seller that you have the financing available to follow through with the purchase. (more…)