Colorado has long been a vacation destination for skiers, hikers and outdoor active folks. Now these people are loving Colorado so much they have decided to move here. All at once. Pretty much the entire state of Colorado is seeing low existing home inventory. Homes are selling faster than they can be listed.
This has created a market heavily weighted to the seller side. Real estate agents from Evergreen to Denver are having a hard time finding homes for their buyers and when they do it turns into a bidding war and homes are going under contract for over-list price. You may ask yourself why this is happening. The main reason is simple. Supply and demand are working in our capitalist society. Some buyers may think this isn’t fair. Sellers seem to enjoy it. This just happens to be a period in time where sellers have more control. they are able to dictate terms and the market. There have been plenty of buyers markets so buyers shouldn’t feel too bad.
Even in this market, we continue to prove homes are worth the high prices. The real estate market is seeing multiple offers on just about every home. Pushing contract prices way above list price. Buyer agents are risking a lot to get their buyers into the home of their dreams. Real estate agents are writing offers that are removing a lot of contingencies. They are writing offers that the buyer will waive inspection objections, appraisals and anything else they can do to make their offer more appealing to the seller.
Real estate agents have been seeing homes go under contract for as much as 20% over list price. That is an amazing amount over list. That means these buyers might be buying their home and going in upside down by 20% off the bat. Buyers think the values will continue to rise are double digits, 10-25% a year like we have, forever. That will most likely not be the case. It could take (once our appreciation levels to a more normal rate) 5 years or more to just be even for what they paid for the home. It is a very dangerous position for buyers to be in. It is a gamble that some should not play with.
Any real estate agent in Colorado would tell you that it is still a great time to buy a home. That is very true. Just be smart. Don’t get caught up in a bidding war and let emotions take over. Decide what your maximum amount will be on a particular property and stick to it. Don’t overpay for something that may not appreciate the way you want. Being upside down in a home is never where you want to be. Our real estate values can not continue to appreciate at the rate it has been. It is literally impossible. We will soon see a more normal rate of appreciation and buyers will be able to gain a little control over the market.
Ask any experienced homeowner and you’ll learn that buying in a ‘hot’ real estate market can be challenging. A high supply of buyers competing for a low stock of available homes is a combination that can lead to bidding wars, price inflation and other headaches. The good news: with some careful preparation and the right mindset, a bidding war is one that you can win. Read on to learn how you can beat out other bidders by making an irresistible offer.
Are you an experienced negotiator? Unless you have made a career out of buying and selling homes, you may find that your skills are lacking. The middle of a bidding war is a poor time to have this realization, so it’s best to start the process with strong professional representation. Invest the time in securing the services of an experienced real estate agent who has a history of successful home purchases and happy clients. For extra assurance, ask them for recent testimonials so you can hear how they helped other buyers.
Real Estate Agents
Danny Skelly
Broker/Owner
Orson Hill Realty
Evergreen – Denver – Morrison -Conifer – Golden – Lakewood
Get involved!
Comments