Colorado’s scorching real estate market could cool off if it runs into the icy winds of limited housing supply and skyrocketing prices.
According to the Denver Metro Association of Realtors, there were only 1,921 homes and condos for sale in a metropolitan area of 3.2 million or more at the end of March. The average closing price hit a record high of $ 674,990 in March, up 19.3% from last March.
“Despite the brief slowdown during the initial lockdown orders, the real estate market is showing no signs of slowing,” said John Skrabec, President of Living urban residential real estate.
“The only thing standing in the way is a shortage of inventory, which frustrates both buyers and their agents. The pandemic has only exacerbated the shortage of houses to buy. “
What is causing the shortage?
The Denver housing shortage isn’t new, but the pandemic has fueled demand as more apartment buyers wanted to move into homes or move from their existing homes to larger ones.
“Home has become more important than ever,” says Ryan Carter, president of 8z real estate. “It’s not just a place of comfort and stability, but often a classroom, gym and office as well.”
In addition, high wood prices are driving up costs for builders and slowing down new home construction, says Stacie Staub, founder and CEO of West + main houses.
Despite the challenges, real estate agents are committed to helping their clients.
Over the past year, 8z has developed Real Estate programs to help both employees and customers.
“We realized that many who are part of the larger 8z community had struggled with the pandemic and were directly affected by the pandemic – they lost jobs, incomes or were sick,” says Carter. “As a result, we launched the $ 100,000 8z4Life Assistance Fund that provides housing-related grants, including mortgage deferral, deferral, and forgiveness assistance. Since then, we’ve paid out 37 grants and nearly $ 75,000 in mortgage aid. “
Real estate companies were also quickly changing the way they displayed homes to protect buyers and sellers during the pandemic. Some of these changes included virtual staging, 3D interactive tours, restricting personal home screenings, and requiring agents and potential buyers to wear masks and gloves during home tours. Buyers also have the option of remote locking.
“In the past year, the real estate industry has changed tremendously, creating a modern market like we’ve never seen before,” says Carter.
The agency offers their 8z Cash Buyer program to help potential buyers with a cash offer that may be more attractive to sellers. The agency also offers their 8z Bridge program, which allows buyers to move into their new home before listing and selling their current one.
Due to high demand from buyers, many homes are being sold unseen for thousands above their list price. For homes that are on the market for even a short time, arranging a viewing appointment can be a challenge.
In order to ensure that more buyers have the opportunity to see houses for sale, West + Main has changed the layout of open houses.
“We open the entries all day on Saturdays, and it’s first come, first served,” says Staub. “By asking people to wait in line for a few minutes, we can ensure that anyone who wants to see a home can do so.”
The agency keeps one agent outside and one inside to restrict access and clean up between shows.
Carter believes that virtual demonstrations will continue to be popular. “Many customers prefer this option,” he says.
Fixed the problem
Real estate experts say the number of homes in the market will not change anytime soon.
“Unfortunately, I don’t see that change in 2021,” says Skrabec. “It’s hard to imagine a scenario where more home inventory will soon be available. We’ll have the normal seasonal spike in activity in the spring and summer, but if interest rates rise it could force some homebuyers to sit on the sidelines. All in all, the current market dynamics are maintained. “
The market could relax as some homeowners stop making their mortgage payments or stop making indulgence, says Staub. This shadowy inventory of distressed properties could soon be put up for sale and help alleviate the housing shortage.
But the best solution to meet demand could be to build more houses, says Skrabec.
“We work with our brokers to explore new construction projects and become experts, which is a great alternative for buyers with flexible schedules.”