Photo by Cassidy Ritterproperty
Experts say this summer could be one of the craziest times to buy a home in recent times.
• May 6, 2021
Andrew Guterman has been trying to turn his first house on and off since Thanksgiving 2019. The agent and senior analyst at Atlas Real Estate submitted eight offers, seven of which were more than the asking price. Still, he couldn’t land anything.
The problem, he says, is that other buyers are selling well above the list price. “Personally, I want to be optimistic, but as an analyst, I find it harder to be realistic about finding the right thing at the right price,” he says of the current Denver real estate landscape.
Traditionally, the real estate market hits the high season from late spring to mid-August and slows down during the winter months. But that wasn’t always the case in Denver – and it was especially not this year.
“I’d say our market really changed in the second week of February,” said Jill Schafer, agent at Kentwood Real Estate. “It was almost as if we were driving, but with our foot on the pedal. And then, in February, we put our foot on the pedal to the highest gear you can imagine. “
Looking ahead, brokers expect the feeling of being in full swing to last at least through the summer. This is a prediction that will be seen at the national level as consumer confidence grows. More Americans intend to buy a home in the coming months than ever in the past 43 years, according to Zillow’s most recent National Market Pulse Report.
In April, Denver had almost 17 percent more entries than in May. According to the Denver Metro Association of Realtor’s market trend report, more than 5,000 homes were sold last month, up 28 percent year over year. There are more homes for sale, but buyer demand is still extremely high. And houses sell faster and for more than list price.
“I think we see our typical spring market bring in more inventory, but our buyer demand is so high I think so [type of market] will take some time, ”says Schäfer. “So what we thought was busy last summer is going to get even crazier this summer.” And that could really say something: Last June, around 300 more houses were signed than the number of new offers. And last July, the average price for a single family home topped $ 600,000 for the first time as prices rose $ 43,000 month-on-month.
David Schlichter, a broker at Compass, expects a lot of interest from both sellers and buyers this summer due to pandemic forces. “We’re going through some really profound changes in the world right now,” he says. “Do people stay virtual or do they go back to the office? This is a decision that many companies are making right now. This outcome will determine whether or not people can stay in the same place [relocate]. ”
Ultimately, according to Lonnie Glessner, Senior Loan Officer at Draper & Kramer Mortgage Corporation, there are two ways we can slow the Denver real estate market: mortgage rates exceed four percent, or we experience a recession.
“Prices of 2.5 to 3 percent are so beneficial for buying a new home and encourage everyone to do so because the home never gets cheaper,” says Glessner.
The story supports Glessner’s point of view. When mortgage rates hit 4.5-5 percent in the second half of 2018, buyer demand slowed locally and nationally.
While this downturn may not come anytime soon, first-time home buyer Andrew Guterman still holds on to a glimmer of hope. “As we see more certainty that the world will open a little more when COVID-19 wears off,” he says, “we should see a more normal return in the real estate pattern.”