Mark McClung

Afraid of being homeless after you list your home?

As we all know, for the last five years, Denver has been deep into a seller’s market in the single family home category. The problem isn’t selling the home, it’s finding a replacement if you plan on staying in Denver. The Contract to Buy and Sell doesn’t have any built-in contingencies for sellers to back out of the sale, unless your real estate broker has negotiated them into your contract. In fact, the buyers are in complete control most of the way to the closing table.

There are several strategies your broker can contractually negotiate on your behalf to reduce the stress of being homeless after the sale. Every situation is unique, so make sure you communicate your concerns, expectations, and the best-case scenario for your move to your broker prior to listing your home.

Price is only one piece of the puzzle.

Bidding wars end all the time with offers that are not the highest price submitted. The key to coming out on top is asking the right questions to find out what in the transaction is most important to the seller. Working with buyers who also understand this concept is key, as they typically ask questions and shape their offer accordingly.

Contractually, what does this mean?

Here are a few techniques to increase the success of a smooth transition into your new home:

  • Seller Replacement Contingency – Written correctly, this allows the seller to terminate the contract within a certain period of time prior to the negotiated date, if they are unable to find an acceptable replacement home. Be prepared to reimburse the buyer any hard costs incurred during this period (think home inspection, appraisal, etc.).
  • Post Closing Occupancy Agreement – This is a fancy term for a seller rent back (sometimes free) from the buyers after closing. You can usually ask for up to a 60-day rent back (sometimes more) after closing to allow more time to purchase your replacement property.
  • Buying first, selling second – Sounds easy, right? Well, the tough part is getting a seller to accept your contingent offer to buy their home before you sell yours. The “secret sauce” here is to have everything ready to go on your current home, so the only thing left to do is hit the “active” button on the MLS. Being transparent with the listing broker and implementing some of the strategies mentioned above (i.e. asking the right questions) also helps to get your new home under contract.
  • Bridge Loans – This is a great strategy if you have sufficient equity in your home and you’re okay increasing the cost of your replacement home financing. This allows you to submit non-contingent offers on your replacement home before you sell your current home. There’s also a scenario where you can use this as a contingency and still pull off selling your home and buying your replacement on the same day!

 

While this list isn’t meant to be all-inclusive, it is meant to show you that there are ways to accomplish selling and buying in a super-competitive Denver market. The key to success is partnering with a seasoned real estate professional who can advise you of your best options.

Denver housing market is building on previous highs

There are no signs that the Denver real estate market is cooling. In fact, it’s picking up momentum as we head into the slower months of the year. Sales volume is up, inventory is down, and the result is a 21% increase in the median sales price from October 2019 and a 5.6% increase from September. The biggest news to talk about is the 11.8% increase in median sale price for attached single family properties. In fact, it set a new attached record at $436,000, and it’s only the second time the attached MSP has been above the $400k threshold.  It seems that buyer confidence is reducing the gap between attached and detached homes.

Want more detailed information about the market in your neighborhood? Please reach out!

Downtown Denver real estate market offers opportunity

Overall, Denver is setting home sales records for soaring median sales prices, low inventory, and the number of homes sold. Tell that to someone who’s trying to sell a condo downtown†, and you’ll probably be met with a puzzled look! Since COVID-19 swept the headlines, living downtown has become less popular. The psyche of buyers looking to call downtown home have changed, and the statistics are backing that up. The downtown real estate market comprises a small percent of Denver’s overall monthly activity, so it’s getting buried by all of the records the rest of the city is experiencing. Here are a few stats we pulled from the downtown condo/loft market for September:

  • Median sale price is down 14.2% to $485,000, from $565,000 in September 2019.
  • The number of sales for September is down 60% from September 2019.
  • There was 4.3 months of inventory, up 21% from September 2019.

Just like the stock market, our housing market has sectors that are down while the overall market remains strong. Can someone say opportunity? Market reports are great, but keep in mind: they are broad in scope and usually give you the 30,000 foot view. The statistics that really matter are the ones for the neighborhood you’re looking to call home!

Want more detailed information about the market in your neighborhood? Please reach out!

† In this article, Downtown Denver includes the neighborhoods of Union Station (LoDo) and Central Business District. 

Summer is winding down, but the Denver real estate market is staying strong

Summer is winding down, but the Denver housing market appears to be continuing its momentum right into fall. Interest rates have inched even lower, tempting buyers who have been on the fence about buying during a pandemic. We’ve had the best August in the last ten years for the number of homes sold at 1,507 (the average number of homes sold in August since 2011 is 1,240). With tight inventory and a new all-time low interest rate, expect to see prices continue to rise along the Front Range for the foreseeable future.

Want more detailed information about the market in your neighborhood? Please reach out!

This market is hot, hot, hot!

If you were living under a rock and the first thing you read was July’s real estate statistics, you never would have guessed we are five months into a pandemic. The median sales price for a single family home continues to push higher. Buyer demand continues to remain strong, pushing down inventory and average days on market.

The buyer rush that occurred after stay-at-home orders were lifted is starting to hit the sold statistics. The number of homes sold has increased over 18% from last year and is nearly double the amount since before the pandemic hit! Add low interest rates to the equation, and you have a recipe for a seriously hot market taking us into the colder months.

Want more detailed information about the market in your neighborhood? Please reach out!

Denver 2020: What to expect from the market

Source: Kelcey McClung of 5280

Coming off, yet another, bidding war this past week (oh, Hilltop), the numbers don’t lie! Inventory remains low, demand has picked up over the winter due to low interest rates, and prices keep inching higher. If you’re looking to purchase a new home in 2020, we recommend doing it in the first quarter. The summer is shaping up to be another brutal one for buyers!

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Buyers becoming more disciplined, calculated

November was an interesting month. Compared to 2018, the median sale price is up quite a bit. But compared to October, there was a slight drop in price, which is to be expected. Home inventory is down, but the average time spent on the market is up. Buyers look to be becoming more disciplined in their decision making. Multiple offers are still happening, but only on pristine, well-priced homes in hot neighborhoods. Buyers aren’t just buying because they’re worried about getting left out of the Denver market! They’re more calculated with their home selection and are using statistical data to justify their offer pricing. As we close out the decade and begin 2020, we’ll keep a close eye on inventory numbers. If year-over-year numbers are significantly lower for the first quarter, buckle up and expect a wild ride this summer!

Denver still feeling priced out of ownership

Source: the Colorado Real Estate Journal

The age old question, revisited: should I rent or should I buy? Here, the author presents statistics that illustrate Denver’s current preference of renting over buying. In the last 10 years, home prices have exceeded rental increases by 24%, requiring far less cash to execute a lease than to transfer a deed. But one thing to note: you don’t need to wait until you have 20% saved up to purchase a home — conventional home loans start with as little as 5% down! In fact, there are other loan products that can bring the down payment even lower.

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Rates are down, sales are up, what about price?

Falling interest rates. Lower inventory. Higher sales volume. How much higher can prices go?

We’ve been reading again and again in the news about falling interest rates. Then, it finally happened: rates rose for the first time since October 2018. Does this mean interest rates are finally becoming stagnant? While the 30-year mortgage rate is down nearly 1% from last October, a small increase from September is notable. The increase can be partially attributed to a rising stock market and hints of a deal in the China trade war.

Denver home inventory was down 4.5% from last October while homes sales were up 9.4% for the same time periods. This equation has the potential to push prices higher during a season that typically sees steady to modest price increases. If you’re anticipating a deal during the winter season, keep an eye on interest rates. If they keep rising, you may see panicked buyers making rushed decisions in order to lock in a great interest rate.

Home sellers stretching for every last penny in metro Denver

Source: Aldo Svaldi of the Denver Post

If you were to search “overpricing a home” on Google, you’d find pages upon pages of articles and blog posts advising that it’s a bad idea. A year ago, one could get away with overpricing a home since putting it on the market alone would garner positive attention. Today, things have changed. Highlighting his reasoning with real time Denver market statistics, this article’s author advises slightly under-pricing a home when listing it these days. Agents and buyers not only know what the home is worth; they also know that a listing price must accurately represent the home’s worth in order to see a quick sale.

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