The Most Wonderful Time Of The Year...To Buy A House:
If you planned on buying a home in 2017 and you've made it this far without buying one, there's good news. We are rapidly approaching the best time of year to buy a house. In a matter of weeks, prices will bottom out for the year and there will be far fewer buyers looking to buy than during other months.
Every year in Denver, November and December allow very favorable conditions for buyers. With home prices peaking in the summer months, what follows is a steady decline in home prices each month usually starting in July and finishing in December.
When homes are listed in the late fall, many of them end up sitting on the market for months due to decreased demand and the fact that many of them are over priced. These sellers do not get very many showings or offers (if any), and as the snow starts to fall they become inpatient and anxious. With little to no competition on these homes, conditions favor the buyer. You are more likely to get a great deal on a home during the winter months than any other time of year.
So, if you've been thinking about buying a home, don't wait. By the time February rolls around, the tables will turn and conditions will strongly favor sellers. Buyers have a great opportunity in the coming months; in a strong seller's market like the Denver market, this is your chance to get ahead.
The Most Important Factor When Selling Your Home:
Sellers generally speaking want to get top dollar for you home, and to have it sold as quickly as possible. Both of these are reasonable and achievable goals when selling a home in Denver. As a seller, you need to know that the single factor that determines what price your home sells for and how quickly it sells is the current market conditions.
Our market is a constantly evolving entity that lives its life in cycles. There are certain times of year where you could receive multiple offers over a weekend- all for over asking price, and be under contract in no more than 3 days. Other times, your house could sit for months and get very few showings, and no offers.
For that reason, its really important that you decide to list your home with a real estate agent who is a expert in our market. Most agents can tell you when the busy seasons are and when its slower, but they don't necessarily understand why or how that affects your home's value. Look for someone who can give you a month to month break down of buyer demand and how it relates to our active inventory of homes for sale each month.
What Goes Up Must Go...
One of the most common questions I get is, "when will home prices go back down?" Buyers want to buy low and sellers want to sell before they lose equity in their home. The short answer is, likely not anytime soon. Our market, and our home prices, are governed by the simple economic principle of supply and demand. Our supply is tiny and our demand is huge. I'll spare you the numbers and data but if you want to read more about that, check out my blog post from earlier in the year, Are We In A Bubble?
If you're worried about prices dropping here's a few key factors to watch:
1. Look for our inventory to exceed 4-5 months (currently ~1 month).
2. Look for net migration to Denver to decrease to 20,000 people or less per year (currently averaging 40,000) and for home builders to pull 15,000 or more permits for new homes.
3. Look for interest rates to surpass 5% in a year's time or our unemployment rate to double or surpass 6%.
4. Look for sub prime loans and foreclosures to increase dramatically (both currently very low).
Any one of these factors would cause our home prices to level out; several of the above combined could lead to decreasing home prices. Right now however, there is no indication that home prices will decline any time soon; if anything, the available data suggest that they will only continue to increase for the foreseeable future.