“What’s happening in the market?” This is a question I often get. The truth is, I am not 100% certain. The area in which I work, predominately Boulder County Colorado, has always been in high demand. Even with the crash much of the country saw in 2008, Boulder saw a little blip, then rebounded and stabilized. Then, as we headed into 2012, prices started climbing exponentially, and for the most part, have not stopped. Sure, we see the ebb and flow of the seasons, and things flatten out a bit, but overall, the value of homes in this area have been, and remain, a solid investment.
Enter 2019, then roll into 2020, a worldwide pandemic, and a sudden need for more work / live space at home. In 2019 we were already feeling the pinch of low inventory and high demand. Sellers thought about selling, but were concerned that they would not be able to find a replacement home so they stayed put. We were seeing a lot of remodeling, as homeowners decided to improve upon what they already had vs. looking for something new, and so the inventory shortage was born. 2020 marches in, and families found themselves having to pivot and work from home and homeschool their school age children; their homes went from being a place where family lived, to a place where family worked, learned, lived and played; it was a LOT of togetherness! With restrictions in place, and outings limited, having a backyard, and some private / safe space to call your own was suddenly a desired commodity, and we saw a flood of interest in the suburbs. The once desirable urban living was waning and the demand for more single-family housing rose quickly; so quickly that the demand was impossible to keep up with. This demand further tightened inventory, and drove prices through the roof. We saw rents rise as well, driving even more demand into the market from those that were renting, to try to find a place of their own to purchase.
For homeowners that were in a position to sell during this time life was sweet! They could basically name their price (within reason) and the offers would flood in, often exceeding the list price by $50k - $100k or more. Buyer agents were crafting purchase contracts stating that their buyers would not make any requests of the seller to make repairs, and offering to cover the cost difference between the list price and the purchase price should the buyer’s appraisal come in light. As a buyer’s agent, we were expected to get creative, while still working within our legal limits, and giving our buyers sound advice. The stress of the past 18 months has driven many agents out of the business. Buyer and agent burnout has been high, and after spending countless hours looking at homes, often dropping everything to accommodate our buyer and meet a tight offer deadline set by the seller, writing numerous offers, and trying to hold it all together while supporting our buyers, who were feeling defeated and frustrated, our buyers often turned to signing a lease and renting “until the market cooled off” – who could blame them? It was brutal and heartbreaking both for home buyers and agents alike.
Ironically, it was not easy to be a listing agent either. Seller expectations were often unrealistic, placing undue demand on their agent. Even the most professional and kind buyer agents were understandably tired and cranky, and would react out of character when the seller would elect to accept an offer before the offer deadline. As the listing agent, you would often be the target of that frustration when you had to make the call that the listing was no longer available. Then there was the buyer fallout to deal with; buyers feeling desperate would make fantastical offers, then once accepted would have remorse and sometimes find a reason to terminate, frustrating agents and sellers alike.
Everyone was tired. Everyone was burnt out.
But, back to the original question; “How is the market?” I do believe that there is light on the horizon! As it always does, I believe that the market is starting to correct itself.
I am seeing homes sit on the market for a week or more (in a healthy market, 90 days is not unusual). I am seeing price reductions. Instead of 15 – 20 offers on a single listing, I am seeing 1, maybe 2 or 3. Things are starting to normalize.
This is excellent news for buyers! I would not go so far as to say it’s becoming a buyer’s market…I think we are a long way from that, and buyer’s need to be mindful that they still have to submit a competitive offer in order to be considered. However, finding a home, and having your offer accepted, is more a reality now than it has been in the past 18 months!
Although sellers are not rejoicing quite as much, I do see this as a good thing for sellers as well; less fall through transactions / more authentic offers, less adversarial and more cooperative transactions, and more opportunity to find a replacement home.
I do believe that we are heading towards a more stable, healthy, real estate market.
If you have been on the fence, or renting because you were not in a position to be competitive, now may be the right time for you to revisit homeownership!
If you were thinking about selling, but had concerns about your ability to find a replacement home, now may be the time to revisit your dreams!
I would love to help you strategize reaching your goals! The market correction is a good thing for everyone! Please reach out to me if I can be of any assistance.
If you’re thinking that waiting a year or two to purchase a home might mean you’ll save some money, think again!
Waiting to buy could result in being able to afford less home for more money, CLICK HERE to learn more.
I would love to strategize with you, to see how together, we can get you into your dream home!
Today's real estate market has high buyer interest and low housing inventory. With so many buyers competing for a limited number of homes, it's more important than ever to know the ins and outs of making a confident and competitive offer.
CLICK HERE to learn the five keys to success for this important stage in the homebuying process.
While the best timeline to buy a home is different for everyone, the question remains: Should I continue renting or is it time for me to buy? The answer depends on your situation and your future plans.
With interest rates at a record low, now may be the time for you to take the leap and own a home of your own!
CLICK HERE for some thoughts to help you decide if you're ready to own a home of your own.
As I did my morning search for available properties, I noticed something peculiar. THREE multi-unit investment properties were on the market, all priced under $1.7m, in great locations within the city of Boulder!
On occasion, one of these types of properties will pop up, only to be quickly snapped up by an eager investor. But THREE? And on the same day? In good locations?
Then I thought about it. There is fear in the market due to people needing to self-quarantine, and mandatory shut downs of so many public places, such as restaurants, bars, and businesses where the public would ordinarily gather, etc. People that own mom and pop shops, are self-employed, restaurant owners, etc. are scared, and many of them are wondering how they are going to financially sustain themselves. Tenants are losing their jobs, or at the least being temporarily laid off or forced to stay home, many without pay. This will make it nearly impossible to pay rent. Many students have already moved home leaving their rented spaces near campus uninhabited , and possibly without paying rent. This puts landlords in quite a predicament. Many landlords still need to pay the mortgage on these properties, and with no rents coming in, they may be considering cutting some of the weight, selling off some of their investments...and pricing them for a quick sell.
My prediction is that we are not only going to see this with multi-unit investment properties, but single family homes and condos / townhomes that were purchased as rental properties as well.
Some investors will hold on and ride it out, waiting for life to stabilize. Others will maybe shed a property or two to lighten the load during these uncertain times. This is a sad state of affairs, and my heart goes out to those that feel the need to "unload" an investment that they worked so hard for.
The small silver lining in this is that if you have been trying to get into the market, there is a chance that you may see more properties become available, at a reasonable market rate! This could be a good time to buy.
Our current environment is uncharted territory for all of us. Right now, it is not quite "business as usual" I personally am practicing social distancing and self-quarantining as best I can while working from home. Although I do not have a way to know what the near future holds, for now, the title companies are still open (with a limited staff); and I think we may see more remote transactions taking place very soon. Homes are still selling; while taking precautions to not further the spread of CONVD-19. That is the landscape for now.
If you are looking to purchase a home, please reach out. I am happy to discuss how we can make this happen and still practice healthy distancing.
If you are reading this blog, I sincerely hope that you and yours are safe and healthy. Please do all that you can to stay healthy and prevent further spread of this dreadful virus.
There are many clear financial benefits to owning a home; increasing equity, building net worth, growing appreciation and more. If you're a renter, it's never too early to make a plan for how homeownership can propel you toward a stronger future. CLICK HERE to read more...