The Current Supply/Demand for Denver Home Inventory

You are hearing everywhere that the available home inventory is low. It has also been reported that there have been fewer homes sales so far this year. This makes it look like both supply and demand are down for the year.

In reality, neither is true. It can all be confusing so here is a blog post to unravel the mystery.

In short, the decrease in home sales is a bit of a mirage. Due to lags in reporting, the true number of sales for January through June of 2014 will not be known for a few more weeks. When all is said and done, we'll be with a percent or two of last year's numbers.

  Thus, while inventory is historically low, this is not because there are fewer sellers. For all practical purposes, we've had the same number of sellers this year as last year. Supply is steady even though inventory is low.

At the same time, buyer demand is through the roof and much higher than the sale numbers show. This is because of the "multiple offer" situation. A high percentage of homes that come on the market have multiple offers. For every one that sells, two or three other buyers are left to continue their search. If there was more inventory, we'd have 20% or 30 % or more sales so far this year.

Bottom Line: Supply is steady, not down. Demand is up, big time. Read more about the whole market situation HERE.

Remember:I have detailed statistics on what the market is doing in each zip code in metro Denver for both single-family and multi-family homes. Call me if you'd like a report for your type of house in your specific zip code.

Source : Colorado Home Realty

Seller Strategies for Finding A Replacement Home

Right now, sellers can sell quickly and for more than their home has ever been worth in many cases and still have options to implement strategies to protect themselves in case they cannot find an appropriate, exciting or acceptable replacement home. Here are some of those strategies:

• Have home totally prepared, ready to go to market, then find replacement home.  Working with a great agent means the sellers home is staged, pictures taken, brochures done, price determined and an effective CMA ready to present to the listing agent on the purchase of another home (this requires trust and partnership between home owner and agent as agent will have already invested a significant amount in preparation for marketing of the home and seller must be committed to the process).  The moment a seller finds the right replacement home, they get it under contract and immediately place their home on the market. PROS: lower risk of not finding replacement home.  CONS: must be more aggressive in asking price on current home, reduced negotiating power on the purchase of new home, requires lots of explanation and education of agent and seller on other and of transaction.

• Purchase new home prior to selling current home.  If sellers lender will qualify them to own two homes, use equity in current home to purchase the replacement home.  The seller takes out an Equity line of credit against the current home to use as down payment against the purchase of a new home.  PROS: take time to find replacement home, not rushed to get out of current home, tremendous negotiating power in purchase of new home, assuming appreciation continues at similar pace, the seller actually achieves appreciation on the ownership of both properties.  CONS: must qualify for owning two homes, must carry note on two homes, risk of owning two homes longer than anticipated.  (given the appreciating market we are in, if a seller can afford to do so, this is the most financially beneficial strategy).  Alternative forms of this strategy might include borrowing against retirement and replacing those funds upon sale of current home, or other forms of accessing capital if a seller can afford to purchase prior to selling.

• Sell current home and take time.  While this is definitely a hassle, when sellers look at this strategy it actually makes a lot of sense.  Sellers sell their home, focus on getting top dollar for that home and put the vast majority of their belongings in a short term storage facility. Sellers then move into a short term rental (which has its own challenges right now, but there are options) and take their time to find the right replacement home.  If someone is looking at a 10-20 year move, is it worth 15 days to 3 months of short term rental and hassle to find the right home?  only the seller can decide the answer to that question.  PROS: most money for current home and appropriate time to find great replacement home.  CONS: hassle.

• (Most Applicable for Most Sellers) Sellers put their current home on the market and select the offer to purchase that allows the seller the greatest flexibility in finding a replacement home.  Sellers can write into a counter proposal to any prospective buyer for a longer closing time frame AND that seller has 2 or 3 weeks (or whatever seller chooses to ask for) to find a suitable replacement home.  In the event that seller does not notify the buyer that a suitable replacement home has been found and placed under contract by “X” date, the current contract terminates.  PROS: great confidence for the seller to place the home on  the market and know they have opportunity to find a great replacement home.  CONS: lose some negotiating ability with buyers.

Get excited about more inventory, low interest rates and the opportunity to save a tremendous amount of money over the ownership period of the next home.

This might be the seller’s perfect storm.

Relocating to Denver

Another Real Estate Bubble?

Is it deja-vu? Have we seen this movie before?

The metro Denver real estate market has made a dramatic turnaround — going from a buyer’s market to a seller’s market in short order. With prices rising dramatically, is this just another bubble that is going to come crashing down?

Not necessarily. Historical perspective shows this. The accompanying chart shows the average sale price of single family resale homes in metro Denver for the last 18 plus years. Notice two things:

(1) Prices rose $61k from January 2012 through April 2014. That is an increase of 21.8%. There was a similar price rise in a similar time period that added $60k to the average sale price of homes from January 1999 to April 2001 — a 32.2% price increase. Yet that dramatic rise was not followed by a crash. The market continued to appreciate at a healthy rate for another five years.

(2) Notice the straight line on the accompanying chart. It is the “best fit” line through the data. If you can remember back to high school algebra, the best fit line is the line that shows the real trend in a set of data. Prices were above the trend line from mid-2000 to mid-2008 and then below the trend line through mid-2013. Prices have just recently returned to the long-term trend line. It appears that the recent recovery has put us back where we would have been if the long term trend has persisted over the whole period from mid-2000 to today. That seems healthy.

As they say in the investment world, “past performance is no guarantee of future performance”. However, this historical look shows that big increases are not always followed by immediate setbacks.

By the way, we’ve seen info on home price trends in metro Denver going back into the 60s. As we recall, there is never a period of price decline lasting more than 5 years.

The bottom line: It is a great time to sell. If you’ve been wanting to move, it’s a great time to jump in and do so. It is always a great time to buy and especially when your next move will be a place you want to stay for a time frame of five years or greater.

Stay tuned for more insights on the Denver area real estate market. In the next installment, we’ll report on some economic fundamentals that bode well for real estate in the mile-high city.

- See more at: http://juliereddingtonrealestate.com/another-real-estate-bubble/#sthash.rM4w4KTz.dpuf

Denver Real Estate stats

The metro Denver real estate market continues to show rising homes prices due to increased demand coupled with a low inventory of homes on the market.
 The latest stats show that 12% more single family homes sold over the last twelve months compared to the same 12-month period a year ago. At the end of February, there were only 5500 single family resale homes on the market -- barely a two month supply of homes since more than 2700 single family homes went under contract in February. As a result of these factors, price appreciation has been over 9% over the last 12 months. The 12-month moving average sale price for single family homes stood at $333,983.
 The stats in the condo and townhouse marketare a virtual carbon copy. Demand is up by more than 22% while the number of properties on the market is up just slightly from a year ago. Price appreciation in this category has been close to 11% over the last 12 months. The average price for a condo/townhouse stood at $201,869 at the end of February based on the 12-month moving average.

Attached Single Family Homes

Detached Single Family Homes.

We like to use the 12-month moving average figure for looking at price trends. It is not a number you see reported much in other places. Without getting all Bill Nye, the Science Guy nerdy about this, just know that the 12-month moving average takes 12 months of sales data and averages them together to produce a number that takes out seasonal fluctuations. As a result, a chart of 12-month moving average sale prices gives you a true price trend. Check out the linked charts CHART 1 or CHART 2 to see metro Denver real estate price trends.
Every real estate market is local. There are literally hundreds of sub-markets within the Denver "metroplex" based on exact location, type of property and price range.

The market in your particular area may be doing better or worse. I've got stats like the linked tables and charts above for every single zip code in metro Denver. I'd love to send you the data for your part of town. Just give me a call.

- See more at: http://juliereddingtonrealestate.com/real-estate-stats-in-denver/#sthash.zI56C03D.dpuf

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