Updated: Apr 27, 2022
April 23, 2022 | SCHWINGSTATE's Greater Denver Metro Market Wrap-up with Hot Tips for Smart Sellers and Savvy Buyers
March proved that despite increased inventory, there is no sign of a market cooldown anytime soon. Average close price in the metro area has risen 9% and is now over $700K. Median close price rose almost 5% and is now over $600K.
Notably, of all the new listings that came to the market in March, only 26% were priced under $500K. Within this price segment, single-family (detached) homes have become extremely scarce and will sell at a rapidly increasing premium into the future.
The truth is that there's good news for both buyers and sellers this month. The slight seasonal shift in increased inventory will positively impact buyers who have felt fatigued in the residential market so far, while current homeowners continue to enjoy unprecedented equity growth. Even so, everyone will continue to wonder where things go from here, which we'll explore next week in a short special feature called "The Bubble??"
Now then, with no further adieu, here's your hot tips 🔥 for May ...
SCHWINGSTATE'S BEST 3 TIPS FOR BUYERS — RIGHT NOW
Indications couldn't be clearer. Home prices (and yes, rent too) in the metro area will continue to rise along with interest rates giving buyers an even steeper hill to climb later. The good news is that appreciation is expected to slow as more inventory comes to market.
FINANCE FINESSE. Work with a lender to become TBD Underwritten so that you are in a position to offer to close extremely quickly (8-10 days) giving you a big, cash-like advantage over other buyers. If you're budget-limited under $500K, focus on townhomes or condos to get your foot in the door and ride the equity wave UP. Brainstorm with experienced and dedicated pros on ways to make any offer you submit both competitive and creative, bringing your individual and maximum advantages to the table.
FOLLOW YOUR HEAD. While the beginning of the year may have been an emotional market for many, it’s well past time to shift to a logical one. Going over list price? Bid only up to your comfort limit. Require important contingencies in a contract you offer up. Perform inspections on any home before closing. Invest your time and intentions carefully and strategically. Your resources are valuable, protect them! Partner with knowledgeable, highly-committed pros who can (and will) help you make a challenging journey rewarding, and make smart decisions every step along the way.
FORTUNE FAVORS THE BOLD — and those who persist. Good news: If you’re still in the market there are serious reasons to be optimistic today. With the recent uptick in inventory it is more common to compete against fewer offers than it was earlier this year. With more listings coming on soon due to seasonality trends — coinciding with many of your former competitors giving up and dropping out — the chances are real that the golden opportunity you were working so hard for could be a lot closer today than you think.
Call me. I'd love to hear from you. I promise to work hard (and smart) to get you to break through on a home you love, on terms you dig, this year. Let's make it happen.
SCHWINGSTATE'S BEST 3 TIPS FOR (EVEN POTENTIAL) SELLERS — RIGHT NOW
Capped by steeply rising prices, rapidly increasing interest rates, buyer fatigue and a whole lotta heartbreak ... many would-be buyers are dropping out of the market for both financial and emotional reasons. Currently, offers continue to come in competitively. While bidding wars are still very much alive, both the number of offers and the rate of the escalation appear to be slowing.
Yes, home values will stay extremely strong and continue to rise, but prepare for showing traffic to be noticeably affected by those who leave the market this spring and summer.
TLDR: Just because you know a guy-who-knows-a-guy who got 25 offers after 100 showings and sold 25% over list last month, that experience in no way guarantees an exact response on another home sold later this summer.
Happy homeowner contemplating making a move? There's a lot to consider. So here you go, SCHWINGSTATE's best advice for May:
TAXING TIMES. It’s April. You have your CPA on speed dial. Give your pro a call now to thank her for all her hard work, and chat about capital gains to prepare for whenever you sell later. Ask about ways to minimize the tax bite with smart and allowable deductions to start tracking now.
INVEST IN YOUR INVESTMENT. Despite intense demand that will continue well into the foreseeable future (and what the guy-who-knows-a-guy says), homes really don’t just "sell themselves." A home that is prepared and marketed carefully and professionally will see vastly more traffic, attract serious and capable buyers, and have sellers knowledgeably and confidently committing to the very best offer — in a legally-binding contract that they understand and can successfully bring to a closing table. Invest the time, attention, and intention it's worth whenever you choose to bring such a valuable asset to market. You will reap big rewards in dollars, outcomes, and experience later.
STAY GROUNDED. Today, buyers are more knowledgeable than ever before. They have been studying and competing in the market for months. Buyers easily sense when a house is priced too high, even in a hyper-charged market. Sellers who get carried away and decide to jump in with their ideal bidding war price as a starting point — irreflective of comps affecting their verifiable market value at the time of listing — end up losing out. The data proves it:
In March 2022, only 6.4% of closed transactions reduced the asking price before receiving an offer. Properties that did so spent on average of 55 days on market compared to just 8 days for those without price reductions. Properties without price reductions attracted an average close-price-to-list-price of 106.4%
Pricing real property with precision from the start requires skill, expertise, and research. The good news is that doing so results in a faster sale, easier transaction, less carrying costs, and reliably brings the most money into a seller's pocket, every. single. time. Bank on it, and call me when I can help YOU.
Michelle Schwinghammer is a REALTOR®, Certified Negotiation Expert® and Certified 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 proud to serve as a leader on its Community Alliance Committee.
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