Purchasing a home in Denver has become an elusive proposition for many would-be home owners. Buyers are again faced with a seller’s market that has the sellers firmly entrenched in the driver’s seat, calling all the shots. It’s a repeat performance of 2015, but this time, frustrations for both buyers and agents are running high.
Frustration All Around
Frustration levels, like Denver home prices, are at an all-time high. Home buyers are again competing for the limited number of homes for sale in the Denver Metropolitan market. This year, it isn’t just the lower price ranges waging battle at open houses. Buyers are competing in the $400,000 to $700,000 price ranges as well.
Fed up with the tight market, would-be home buyers are giving up and sitting on the sidelines, waiting for a shift to a more normalized market. Realtors® are also living the frustration of being unable to assist their clients in getting them into their first, second or seventh choice in properties.
Home sales statistics compiled by REColorado for March 2016, show an increase in inventory of 6 percent compared to the same time last year, with Denver home prices reaching at an all-time high. While it is good to see the bump in inventory, these statistics don’t tell the story of buyer frustration.
“Days On Market” Tells the Tale
Denver real estate agents working with buyers are finding themselves showing dozens of properties and submitting offer after offer in an attempt to get their client into a home. Digging into the statistics, Days on Market (DOM) is not nearly as optimistic as the increase in inventory appears to be. The median Days On Market March 2016 is a mere 6 days.
Think of it this way. A home goes on the Market on Thursday – day number one. Showings start Friday and go through the weekend – days two through four. Offers are presented to the seller by the listing agent on Monday, and the home is under contract on day six.
Thus, buyers have one shot at a home, and they are easily up against 5 or more offers. To compound the competitive struggle, sellers are getting offers for their property that are sight unseen, all cash, as-is with no inspections and well over asking price by thousands of dollars. Buyers utilizing FHA loans, VA loans, or down payment assistance are at a great disadvantage, and are finding themselves disheartened over and over again.
Good News Ahead
But it isn’t all bad news. Historically, inventory levels begin to increase dramatically heading into April. Although the number of buyers will increase as well, the market will loosen and improve through the summer and fall. Looking ahead, with another potential interest rate hike in 2016 and home builders beginning to catch up with demand, this may be the height of the toughest seller’s market in Colorado.
Jim Brown is a Realtor® and agent success leader at Private Label Realty in Denver, Colorado. He advises, assists and mentors agents at all levels to help them succeed and grow their real estate business. www.JimBrown.me