How can I actually get a house in this crazy Denver market?
It's the question I get the most often these days with so many homes getting double digit offers and going for way over asking price. My answer? Buy a more expensive home. I know that sounds like a lame answer from a greedy Realtor but it's the truth, let me explain.
If we look at average days of market by price range in the Denver metro area courtesy of Megan Aller with Land Title, some unique patterns are revealed. First, the average days on market for all Denver homes is around 24 days. For homes in the 0-199K price range, the average days on market is20days. For homes in the $200-399K range, it's 16 days, homes $400-600K it's 48 days, homes $600-800 it goes up to 61 days. Notice the trend?
I have a client who is shopping under $400,000 and we have yet to get a house under contract after 16 tries in the Highlands. We offered $400,000 for a 2 bed, 1 bath, 1,000 square foot home that needs work and got out bid. In contrast, another client of mine just bought a brand new half duplex in the Highlands for $525,000 and we were the only offer on the house.
I know that $125,000 is no small number and my client shopping under $400,000 obviously couldn't afford this home. But I'm talking to him about his options to bump his purchase price higher because I firmly believe that he will get way more house for his money and in the long run will be grateful for stretching his budget and getting a bigger home. Even if it means renting out a room to a friend for a year or so, financially it's a no brainer. You can see from this chart how quickly homes under $400,000 go under contract.
The house he offered $400,000 for that is only 2 bed, 1 bath, 1000 square feet with no basement hasn't closed yet so I can't give out the info on it. But compare it to this one that closed recently at 4250 Stuart St. It 1,000 square feet larger, has an extra bathroom and sold for $435,000 after originally being listed for $450,000. The finishes are nearly identical, all just a matter of price point to start. And see how many more homes are available in higher price ranges?
It's not going to be long until these price increments get bumped by $50-100,000 as demand continues and this market continues to improve so is there ever going to be a better time to get into a little bigger home? Interest rates are at an all time low and there is some creative financing out there to make it easier. If you are stuck and think it's impossible to buy a home in Denver, let's talk and see what other options might exist.
Mic Ortega
m. 303.903.3734
mic@liveurbandenver.com
www.micortega.com
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