I keep telling those that inquire about the real estate market in Denver that it is insane, unless you are a “move-up buyer”.
This week realtor.com ranked Denver fourth in their list of The 20 Hottest Housing Markets in the US Right Now, and with good reason. Last month sales prices in Denver leapt 6.3% over sales prices in February and the average list price per square foot rose from $166 to $235. This is due to the increasingly strong demand for homes in the Metro Denver area and continued low inventory. Population growth, job growth, and low mortgage rates are putting more and more people in a position to buy a home. But, even a surge is new spring listings it is not enough to keep up with the high demand for housing in Denver.
Dozens of buyers are fighting over each available property, and this is where it gets “insane”. In an effort to beat out multiple offers, home buyers are not only offering $10,000 – $30,000 over the list price but are also agreeing to purchase homes “as-is” and to pay cash for any difference between the purchase price and the appraised value of the home. This puts first-time home buyers, and those without large cash reserves, at a great disadvantage. These acts may seem crazy, but they are becoming the new normal, especially for those searching for a home under $400,000.
As stressful and discouraging as this market can be for buyers, there may be one kind of buyer that can greatly benefit from the current market: move-up buyers. Move-up buyers are existing home owners that may have outgrown their current home and are looking to move-up the property ladder.
How Move-Up Buyer’s Win in Denver’s Current Real Estate Market
- Profit: Take advantage of your position as a home owner and list your home now. Home prices are at record highs in Denver and that could equal a higher payoff for you.
- Timing: In the current market you won’t have difficulty finding buyers who will agree to a lease-back that allows you to stay in your 1st home while you look for your 2nd. It is not uncommon for sellers to ask to remain in their home for up to 90 days after closing. This gives you time to search for your 2nd home after you have a nice down payment in your pocket to work with.
- No Waiting: A current average of 36 days on the market means that you won’t have to wait long for your 1st home to sell.
- Financing: Continued low interests rates means that you can get a great rate on the new mortgage for house #2.
- Finding a New Home: Inventory of homes listed $400,000 – $1,000,000 have shown a slight increase since 2013. If your second home is in that price range, not only will there be more to choose from when you look for house #2, but you won’t have to suffer the same competition as those looking under $400,000.