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Denver Market Update

Denver Market Update

Real Estate News – March 2018

Our strong housing market is not going away anytime soon. I’ll say it again, WE ARE NOWHERE NEAR A DOWNTURN IN THE MARKET! The large pent-up demand for houses continues to gobble up any inventory that makes it onto the market and is one of the many reasons I believe demand for homes is going to stay strong for the foreseeable future. As long as demand stays strong and supply remains constricted (we are at a near record-low number of homes on the market for sale) you can be sure home prices will continue to rise. Where is this large pent-up demand coming from? Here are just a few of the sources:

  1. Home formation (e.g., marriages) fell dramatically during the downturn while the economy crumbled. As the economy improves more people are getting married and creating homes. For example, from 2003-2006 a total of 1.6 million households were formed in the U.S. But from 2007-2010, as young people lost jobs, moved back in with their parents, and didn’t have the economic confidence to marry and create households, only 600,000 households were created. That number is now rising quickly. From 2013-2017, 1.7 million households were formed, and these folks want to buy homes! In a recent survey by the Joint Center for Housing Studies of Harvard University, 94 percent of 22-25 year-olds said they expect to buy a home in the future. That’s right, young folks still want the American Dream of having a family and owning a home!
  2. The population of metro Denver increases about 1.5 percent per year and will continue to do so for years to come. Does anyone seriously believe that our population is going to fall in the next 10 years? The best demographer in Colorado, Patti Silverstein, believes the population of metro Denver will rise from 3.05 million in 2016 to 3.5 million in 2025. More people = more home sales = continued long-term strength in our housing market.
  3. And speaking of population, here’s another important point. The inflow of immigrants from countries around the world, both legal and illegal, plummeted during the downturn because of the reduction in U.S. employment opportunities. As the economy has rebounded immigration is skyrocketing. These folks need a place to live (hint…hint… investors and builders).
  4. During the recession, about 5 million people lost their homes and had their credit destroyed. As their credit improves over time, more and more of them are becoming qualified to buy again. They were homeowners once and most want to be homeowners again as soon as they are able. These folks have been a big source of demand for housing the past few years and that will continue to boost the housing market.
  5. Millions of others, especially young people, saw their friends and relatives lose their homes during the recession and swore to never buy a house. They learned the wrong lesson. These are a lot of the people who have been renting the past seven years instead of buying, making the rental market historically strong. These are also the very people who lost out on the recovery and forfeited tens or hundreds of thousands of dollars in home equity because they didn’t buy when the market was soft and prices were low. As the housing market continues to improve they’re looking seriously at buying their first home and building wealth through homeownership.
  6. Related to #5, many renters have noticed how quickly prices are rising and feel they need to jump in now while homes are still relatively affordable given the historically low interest rates. In the last 12 months, the average sales price of a single-family detached home rose another 12.6 percent in metro Denver. The more home prices rise, the greater incentive renters have to finally take the plunge and buy a home.

These are just a few of the many reasons demand for homes remains strong. If you’re interested in discussing what YOU should do in this real estate market, let’s talk.

Keys for Buyers
In a market as tight as we have today buyers need to write strong offers if they want to get them accepted. You need to work with an agent who understands how to write a powerful offer that will be seriously considered. Here are some of the ways to do this:

  1. Get prequalified by a competent loan officer before writing any offers, and invite the seller to contact the mortgage person who can demonstrate what a strong buyer you are. I have excellent referrals for you!
  2. If the seller needs time to move, write an offer with a 30-60 day rent-back period. This permits the seller to stay in the home after closing to give them time to find a replacement home.
  3. Provide a large earnest money deposit to show the seller you are serious. A good agent will never lose the earnest money you put up so you’ll still be safe, but the seller will be more likely to accept your offer.
  4. Use a cashier’s check for the earnest money. It makes no practical difference but subtly indicates to the seller you really are serious enough to take the time to get a cashier’s check.
  5. Write an escalation clause in your contract that says your offer will beat any other verifiable offer by, say $2,000.

There’s a section of my Home Buyers Guide called Keys to a Strong Offer. It goes through all the ways to strengthen your offer. If you would like to receive a copy of this, please let me know.

Feel free to call me to discuss how I can get YOUR offer accepted!

Keys for Sellers
Springtime is upon us, ringing in the peak period to sell a home. If you’re considering moving, now’s the time to begin the process. You’ll want an accurate Comparative Market Analysis on your home to interpret its value and identify small projects that can increase its marketability. It’s also a good time to start looking for your next home to get a sense of what’s out there and where you might want to move. Call me and I’d be happy to get you started!

If there is anything I can do for you, whether it’s related to real estate or not, please let me know.

Thank you!

As always, we’d like to take a moment and say thank you for your business and referrals. Every client is special to us and it’s a pleasure and a privilege to serve your real estate needs. Please feel free to contact us anytime if you have any questions or thoughts about the real estate market.

If we can help you in any way, don't hesitate to contact us!

Testimonials

“Drew is a master communicator. The process was managed with great care and professionalism. I would recommend Drew to anyone selling or purchasing a home in the Denver Metro area.”

Kevin and Kim S.

“Drew Schneider is an experienced agent that always goes above and beyond. We have worked with Drew several times throughout the years and have always been impressed with his thoroughness, professionalism, and expertise. In addition, Drew is an honest agent who will share information and his opinions openly when helping you make a decision. We HIGHLY recommend Drew to anyone needing help with a Real Estate transaction.”

Eli and Letty M.

“Drew was an invaluable resource for me in my home sale and purchase. He was helpful, knowledgeable and supportive. I would highly recommend him to anyone looking for a new home.”

Tracy S.

“Drew was amazing. I felt at ease throughout the process. What I had in my mind as ideal but unattainable, Drew made a reality for me! At a better price than expected! I will refer all my friends and family to Drew as their needs arise.”

Trevor S.

“Wow! Great system, materials, photos, communication and follow up.”

Vince D.

“Drew’s communication and professionalism was excellent!”

Dan and Taryn G.

“Drew was very patient with my clients, an excellent communicator, and totally professional in our dealings. He was wonderful throughout the process.”

Bill B.

“Our experience with Drew was excellent. We will be recommending him to all friends and family.”

Josh and Loni W.

“I don’t know how the whole experience could have been much better! Very good!”

Bruce and Linda L.

“Drew was great to work with. He came highly recommended by my co-workers. This was my first home-buying experience and he made the whole process run smoothly. I felt he really listened to me and what I was looking for and only showed me condos that met my criteria. He was very good about keeping me updated and easy to get a hold of any time I had a question or concern. He was there through the financing and actual signing. Not only was he professional, but he is also a genuinely nice guy who …

Eva S.

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