Updated: Mar 22, 2022
March 21, 2022 | Greater Denver Metro Market Update
📈 THE BIGGEST TAKE-AWAYS FROM THE LATEST STATS: Record-high inventory in a February was recorded way back in 2006 when there were 25,484 active listings and an extreme buyer’s market in play. Record-LOW February inventory was set last month, with a meager 1,226 listings on market. Lack of supply coupled with a surplus of serious and qualified buyers caused prices to rise at an unprecedented close-price-to-list-price ratio of 104.75%. The metro area is set for another year of double-digit appreciation with interest rates rising throughout the year. Want to drill into all the numbers in detail? Go here and call me if you have questions. I'm here to help and would love to hear from you.
🚨 CAUTION, MARKET CHANGES AHEAD International instability, inflation, and increasing interest rates are all pushing hard across the market. Economists are warning that the US housing market should brace for possible changes in consumer behavior. The luxury real estate market ($1M+) is expected to feel the disruption the most since financial resources buyers often use to pay for home purchases in this segment (stock, cryptocurrency) have been volatile since the conflict began in Ukraine. While the luxury market has had strong market indicators so far in 2022, things may change and it could be a good time to make a move in this segment.
Overall, the Denver metro real estate market is extremely strong with some signals that it is slowing down, albeit s-l-o-w-l-y. Expect home prices to continue to increase, just at a slower pace. Also, the “average price range” is rising so fast it is outpacing the price any average buyer can afford. As cost of construction and demand for resale homes continues to go up, at some point “average buyers” will get pushed out of the market. When that happens, expect demand and traffic to soften and bidding wars to become less common due to a smaller pool of buyers able to compete.
✅ SPRING TO-DO LIST Five easy things (even potential) sellers can do right now to set up for a brighter tomorrow ...
Spring Forward. Spring is seasonally the best time to sell since it usually sees the most buyer traffic. Do yourself a favor, start spring cleaning now and declutter (declutter, declutter). Whether you decide to sell or not later this year you’ll feel great and be glad you tackled this project early.
Think BIG. Good. Now think EVEN BIGGER. A buyer’s “highest and best” offer these days extends far past an offer (significantly) over list price. Marketed and promoted rigorously at a supportable list price, sellers can expect a wide array of added incentives including buyer-guaranteed appraisal gap coverage, easy inspections, non-refundable earnest money, and much more. Up to 60-day post-closing occupancy agreements at zero dollars-a-day are granted commonly, and make next moves easy.
Control the Controllables. Despite intense buyer demand, ultimately every home’s market price is dictated by location and condition. If your location is negatively affected by a certain feature (i.e., busy street, power lines) be realistic about it. Improve its condition in smart and affordable ways. Call your insurance adjuster to address hail damage to your roof that has yet to be repaired. Replace an aging water heater. Repair non-functioning appliances.
PRO TIP: Focus on small, non-glamorous jobs that actually need attention and repair that will be discovered during an inspection. Avoid big, expensive, and time-consuming remodeling projects that almost always deliver a negative return on your investment. Make your home better and safer to live in practical ways today ... reap the rewards of a smooth and profitable transaction later.
Prepare for EXTREMELY HEAVY Traffic. Typically, new listings go active on Wednesday, showings start on Thursday and continue through the weekend. An offer deadline is usually set for Sunday evening with a very happy seller accepting one winning offer among multiples by Monday in a five-day turnaround. Some sellers also choose to leverage a one-week “coming soon” period in the MLS to generate even more buyer interest before showings ever begin.
With all of these tools, the return of Open Houses, and ability to do over-lapping showings again as COVID restrictions have lifted, prepare to have over 50 buyers to come through your home within its first few days on the market.
Make the process easy on yourself. Whenever you decide to market your home, book a weekend getaway during its debut to maximize traffic flow. Sit back, relax, and let your real estate professional work the trenches for you. Wherever you go, plan to be back on Monday morning to dig deep into contracts, carefully reviewing the offers your home fetched from a thoughtful and effective marketing launch.
Start Your Due Diligence, Today. Even in an emotional market, the data still matters. Pricing right is more important than ever to achieve the best seller outcomes. Bidding wars don't magically manifest all by themselves, they evolve after setting a careful stage that allows in the maximum number of qualified buyers to successfully compete for your home, on a deal that can survive rigid lending requirements, and committing to the strongest and best offer that your promotional strategies attract.
To get your best deal in this red-hot market, hire a dedicated real estate expert who is an expert in pricing homes, who knows these unique and intense market trenches. A seasoned pro who can interpret contract inclusions and omissions and clearly explain offer terms to you. A dedicated advocate who can prepare effective counteroffers and manage competitive broker pressure tactics.
One of the biggest (and easiest) mistakes a seller can make is signing an offer that looks good — but isn't — and then it's too late. You're locked in, unless your future buyer defaults or chooses to terminate.
Whenever you decide to market and sell your home, this year or later, know that you have an extremely valuable asset and opportunity at hand. Choose your professional partners carefully every step of the way to ensure your best outcome tomorrow. I'm dedicated to you achieving the best result possible in any market conditions, and here to help you move forward, always.
Michelle Schwinghammer is a REALTOR®, Certified Negotiation Expert® and Pricing Strategy Advisor® who helps people move forward in Colorado. She currently serves as the West District Director for the Denver Metro Association of REALTORS and is a leader on its Community Alliance Committee.
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