The Denver real estate market has been sizzling hot since 2014. As we head into the second quarter of 2018, prices have jumped and the median number of days on market has plummeted again. Looking back over the past four years, the message is clear; déjà vu, déjà vu, déjà vu.
The Pattern is Clear
When looking at the statistics and developing patterns, the similarities from year to year are quite remarkable. The cookie cutter style charts show the pattern so clearly, that forecasting month by month through the year is quite easy, and with this, we can pinpoint the best time to sell, and the best time to buy.
As long as inventory is limited, the same patterns of high demand and rising prices will continue. Not until a seller loses the fear of finding a replacement home will things deviate from the norm. But as with all things, change in the future is certain.
Location, Location, Location
As the real estate mantra goes, location is everything. Even in this robust seller’s market, location plays a part in price and timing. In the most sought after neighborhoods, open houses are overrun by would be homeowners, and bidding wars send the prices to new heights. Homes listed on a Friday can be under contract by the end of the weekend. Demand drives the buying frenzy.
But in areas that do not have the high demand, meaning they are not in some of the more central areas of Denver, the story is different. It isn’t that the homes don’t sell quickly, they just don’t go under contract in a day. Realtors have become so accustomed to homes selling in days, that to wait a couple of weeks on the market is unnerving.
Also missing from these properties is the bidding wars. Buyers who aren’t competing with eleven other offers have more control in the process. While a low-ball bid still isn’t effective, there is certainly some wiggle room in price.
Is It Time?
Based on the patterns year over year, and where we stand in the market today, if you are planning to sell, today is the day! Prices will continue to rise through May, with the culmination of the selling season in June and July. At that point, prices will level off and even decline through the remainder of the year.
Buyers are really best if they can hold until the end of summer. Prices will retreat, although inventory will decline steadily through December. An argument for buying sooner, however, are the rising interest rates. Money saved towards the end of the year in purchase price, may be lost on interest.
In the End
No matter how you look at it, in this continuing market sellers are in control and buyers are doing whatever they can to secure a home. All across the front range, building has gone wild, helping satisfy the need for more inventory. At the same time, more and more people are leaving the state in search of more affordable homes. While we are still short on housing, at some point there will be a shift in the amount of inventory and number of buyers, and we will see this multi-year pattern come to an end.