More metro Denver buyers willing to pay whatever it takes to get a home under contract – Aurora, Colorado

Aurora, Colorado 2021-05-01 08:00:47 –

The housing market in Metro Denver has been hot for nearly a decade, so no one blames the pandemic for a break, especially for a year. Instead, the enthusiastic pace has only accelerated, breaking records of all kinds, including the amount the buyer is willing to pay beyond the seller’s asking price.

Ginaros, an agent in the New Era Group at Your Castle Real Estate in Denver, experienced how hot things were on the list of Lakewood homes earlier this month. The property produced 74 shows within 4 days and robbed 15 serious offers from buyers. All of these are above the list price of $ 590,000.

How desperate was the buyer? The winning bid is $ 687,000, 16% above the $ 97,000 premium, a carefully considered offer price.

“It was great to be $ 30,000 above the list price before,” Ross says. “Now that can’t be achieved.”

Usually the seller is not even given to get the asking price. A more typical pattern is for the seller to do his best to get the initial price right and then lower the price a bit to close the deal, said a local member of the Denver Metro Real Estate Agent Market Trends Commission. Realtor Steve Danny Liu said realtor.

“If the market is on the rise, you can see that number in the range of 98% to 99%. Hopefully it will be 100% or just above it,” he said.

But in March, Metro Denver sellers set a new record of 104.1% of list price on average.

And unlike 2017, during another overheated period of activity, it’s not just low-priced homes that are being bid on. Sellers now have an advantage over the entire range, including properties over $ 1 million.

Lon Welsh, founder of Your Castle Real Estate in Denver, said: To help the agent understand what’s going on, his company created a heatmap for Metro Denver, showing that the share of sales in the first quarter exceeded the asking price.

Of the 13,807 sales in the first quarter surveyed, 56% were above list price and an additional 18% were sold at list price. Of the 935 neighborhoods tracked, 158 or 17% exceeded the prices offered on all lists. In another 150 homes, 75% to 99% of homes were sold above initial prices.

Indeed, many of these areas had only one or two lists on the market. However, in Aurora’s Seven Hills area, all 17 lists sold above the list price, averaging $ 401,000. And in Lakewood’s Friendly Hills West district, all 13 closed lists exceeded their initial asking prices. The average closing price there was $ 475,000.

In Thornton’s North Haven district, which had 53 sales in the first quarter, nearly 9 out of 10 sales exceeded list prices. Other places with high sales, the highest share of homes and above the asking price were Founders Village and Meadows in Castle Rock, Green Valley Ranch in Denver, South Creek in Inglewood and Reunion in Commerce City.

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Many first-time buyers struggle to scrape together enough for a home down payment, so the bid war heats up markets oppose them and make it much harder for them to land real estate. I will.

“We are creating a set of what we have and what we don’t have,” Zonda’s chief economist, Ali Wolf, said in a statement on Wednesday’s housing market. “People who already own a home are okay. When you try to enter the market, it becomes very difficult.”

According to Ross, many of the buyers she works with are existing homeowners who can pass on shares from their current home to a new property. Still, she advises them to continue for at least 3 to 5 years, preferably longer.

“They know they are overpaid and it stinks,” she said. “But I hope the market will continue to rise and we will be able to hold real estate for some time.”

So, if the buyer is so desperate, why not just list the seller 4% or 5% above what would say that equivalent sales in the area are justified?

One of the risks of far exceeding the market is that appraisers do not support prices. This can cause the lender to reject the loan request, fail to close the deal, and waste the seller’s time.

But there is also an answer. As sellers question and may reject excessive bids, more buyers try to bridge the gap between the offer price and what the mortgage company considers the home worth. We are offering to.

Also, some psychology works to avoid overpriced. In an undersupplied market, setting something right can create interest and increase the likelihood of a bidding war. If more buyers appear, they are more likely to pay above the valuation price if they need it.

“By setting the right price, we can make the market go crazy,” Ross said of Lakewood’s list. “We were able to get buyers who would be happy to do a complete appraisal exemption.”

For buyers who can’t swallow the idea of ​​paying above the list price, one strategy is to pursue a list that is too expensive and protracted. In a market where the average single-family home list is only two weeks and many homes sell on weekends, sitting there for more than a month can feel like a rebuke.

“I’ve heard about 100 shows, 24 offers, and these homes that are $ 100,000 above the asking price, which is an exception to the rules,” Wales said. “In a normal transaction, 3 out of 4 offers are taken, which is 1% to 2% higher than the list price.”

And there are still areas where housing is primarily below the asking price — downtown condos, who?

Around Union Station, 47 of the first quarter lists were below list price, 25 were above list price, and 2 were above list price, accounting for 3% of the total. As a rule, condominiums are less preferred than single-family homes, and expensive urban areas are less likely to experience a bid war than more affordable suburban ones.

Other heat measures

Share of homes that sell above the list price is just one way to measure activity in the market. Danyliw compiles a quarterly zip code measurement of median annual price increases for homes sold, changes in sales volume, and changes in the average number of days the list spends in the market.

Last year’s stay-at-home order made comparisons in the second quarter difficult, but the real estate market was largely intact until mid-March last year, Danny Liu said.

The five most notable ZIPs for price increases in the first quarter were Lowry’s 80230, up 79%. Covers 80128, Meadowbrook Heights, Stoney Creek and Columbine Hills, up 41.4%. 80210, which covers parts of Pratt Park, University Park and Wellshire, increased by 31.9%. 80433, covering conifers, up 27.1%. 80138, which covers East Parker, Ponderosa East and Canterbury, increased by 25.9%.

More metro Denver buyers willing to pay whatever it takes to get a home under contract Source link More metro Denver buyers willing to pay whatever it takes to get a home under contract

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