As discussed in last month’s newsletter, the “New Normal” in our real estate markets is scarce inventory and rising prices. The number of listings for sale is at an all time low. Colorado led the nation in 2014 for home price appreciation with a gain of 8.4% according to the recent year-end numbers from Core Logic.
As 2015 got underway, the market continued to show strength, but is clearly struggling with the lack of inventory. The volume of real estate sold across all Front Range markets in January increased 3.4% on a year-over-year basis. Inventory levels increased to 2.1 months. However, the increase was probably more a result of the typical January fall-off in sales than it was due to an influx of new listings. In fact, we are starting the year at an even lower supply of listings on the market than last January’s level of 2.8 months.
The Super Bowl is behind us and the spring market is in full gear. Buyers and the agents who represent them are scouring the market trying to find homes for their clients to purchase.
As a result, many homeowners are receiving letters or solicitations stating that they have buyers interested in their home, and asking if they might consider selling. Enticed by an easy sale and a price that may be higher than expected due to three consecutive years of appreciation, some homeowners are selling without listing the home and exposing the property to all the buyers in the market.
Other sellers who’ve listed with an agent are allowing their agent to limit the market exposure of the property to a limited number of buyers working with that agent or just within the agent’s office.
In a market this hot, both of these courses of action could be a mistake. At the risk of sounding overdramatic, not exposing a property to the entire market or taking the first offer that comes along could cost a seller thousands, ten of thousands, or even hundreds of thousands of dollars.
In the new normal, almost any house will sell if the price is set low enough. The demand is out there. The real challenge is to get the highest price and the most favorable terms to ensure the sale closes.
There are times when it might make complete sense for a seller to take the first offer that comes along. This is a fluid, rapidly moving, and somewhat tricky market to navigate.
Which is why it’s critical to work with a real estate agent that you can trust. An agent who will help you lay out your options, assess the advantages and disadvantages of any given course of action, and allow you to make the decision that makes the most sense for you (not for the agent!). In short, a trusted advisor.