Tag Archives: Denver’s Hot Market

Metro Denver home prices continue strong gains

Average home prices in metro Denver made another big jump in July, increasing by 12.9 percent over the same period last year to $412,312, including both attached condos and townhomes and detached single-family homes, according to the latest data from the Denver Metro Association of Realtors.

The average sold price for a detached single-family home increased 12 percent year-over-year in July to $460,623 while the average price of condos and townhomes rose 12 percent to $285,531.

That number is the lowest for the month of July on record, but is a nearly 10 percent increase month-over-month from June, when 6,796 active listings were on the market.

The monthly increase offers a glimmer of hope in a market that hasn’t seen much relief from historic inventory lows and price highs for well over a year, said Anthony Rael, chairman of DMAR’s Market Trends Committee and a Denver real estate agent.

At the beginning of 2016, some in the residential real estate industry predicted, citing the unsustainable nature of double-digit price increases, that the rate of appreciation of Denver home prices would slow over the course of 2016.

But, according to July’s numbers, and figures for the rest of 2016 so far, that hasn’t happened.

“We would have loved to see appreciation slow,” Rael said, again noting that the rate of increase in metro Denver is unsustainable. “If we’re having this conversation about double-digit increases for a third year in a row, we’re going to reach a critical level.”

Denver’s home prices began appreciating years ago as the market emerged from the recession and the market has been dealing with an inventory shortage for more than two years. Prices started accelerating at double-digit rates in the last part of 2015.

The market saw a slight cooling in prices from June to July of about 1.9 percent, but that is mainly attributed to the seasonal nature of real estate, Rael said.

The most surprising statistic in July, according to Rael, is the number of homes sold in the metro area, which dropped by 17.6 percent year-over-year to 5,016.

Some of that decrease can be attributed to slowing in the number of homes sold as a result of higher prices and lower inventory, but Rael said that another factor might be at play.

“It could be tied to appraisals,” he said. “There’s a backlog of appraisals right now.”

August data, reported in September, will reveal whether the number of sold homes bounces back, but Rael suspects that vacations and staffing shortages in the appraisal business have contributed to a backup of under-contract deals leading to fewer homes sold in July.

Another housing price indicator, the CoreLogic Home Price Index, which measures appreciation, showed that prices in the Denver metro area increased by 10.2 percent over the year in June, compared with a national appreciation rate of 5.7 percent.

Irvine, California-based CoreLogic (NYSE: CLGX) compiles its index monthly using public records and real estate databases. The index is always a month behind the data received locally.

The Denver City Council is considering the establishment of the city’s first permanent fund for affordable housing, but council hearings on the matter have been pushed back to September.

Click here for details of the plan, which will be funded using a combination of increased taxes and new development fees.

Source: http://www.bizjournals.com/denver/blog/real_deals/2016/08/metro-denver-home-prices-continue-double-digit.html?ana=fbkms

Pro Tips: How To Score A Home Sale In Denver’s Hot Market

Buying a home in metro Denver can be a frustrating experience. With the influx of people to the state, limited number of homes for sale, and investors gobbling up properties to convert to rentals, it’s not uncommon for a home to receive dozens of offers as soon as it hits the market.

Kevin Risen, executive vice president of Coldwell Banker Residential Brokerage of Colorado, one of the biggest real estate companies in the state,has a few tips. He’s been selling homes in Denver since 1978. Risen spoke with Colorado Matters host Ryan Warner.

 

Try paying both commissions

According to Risen, offering to pay both the buyer’s and seller’s commissions, but only offering the asking price on the home, can be a successful strategy. That may be more comforting to a seller than an artificially high bid.

Try an emotional appeal

Writing a sincere note to the sellers can make your offer stand out. Recently, people have even started to make short videos to connect with sellers. These are especially effective if the other offers are coming from investors, rather than individuals or families.

“The truth of the matter is real estate is a very emotional business,” says Risen. “Sometimes that sweet letter or that sweet video can affect the homeowner who may say, ‘I’d rather sell this to a couple with a family that’ll fit into the neighborhood, rather than dealing with an ongoing tenant situation where my old neighbors are now mad at me because I sold to an investor.'”

Be flexible

Many people begin looking for one type of home — a single family unit, for instance — but find a condominium or townhome that is a better fit. It’s often a choice between changing the type of property they’re looking for or moving away from their desired neighborhood.

If you can afford a $300,000 home, you should probably be looking at homes closer to $250,000 in price. In such a competitive market, you’ll likely have to bid above the asking price, so it makes sense to create this buffer to allow for that.

Get preapproved

It’s not uncommon for homes to sell within a few days of being listed, so you want to be prepared to move quickly. While a sizable down payment may be helpful, “more important than that is getting pre-approved from a lender,” says Risen. “You want to be able to pull that trigger.”

Don’t skip the essentials

Buyers are sometimes tempted to grease the wheels for sellers by opting out of things like the appraisal, inspection, or warranty on a home. That’s dangerous, Risen says, because there can be serious problems that are not immediately obvious.

Do your homework

Risen says that these days, nearly every buyer starts their search online using sites like REColoradoRealtor.comTrulia, or Zillow. It seems as though the days of driving around and looking for houses are over.

Risen thinks that it will remain this way in Denver for the foreseeable future, saying “with my experience, I expect this market to continue at this pace at least for another 24 months, and possibly as long as 36 months because the inventory is so severely low.” But while buyers have to be patient and flexible, sellers are quite pleased, Risen says.

“We laugh and say they’re listing the property with the sold sign in the back seat.”

– See more at: http://www.cpr.org/news/story/pro-tips-how-score-home-sale-denvers-hot-market#sthash.ZezObAQ5.dpuf