3189 is the lowest number of single family, Denver homes for sale in the 5 county real estate market ever. That number
of listings for sale as of February 29 was the lowest since the Denver Multi-list organization, REColorado, has been keeping records.
That is of concern because February home sales totaled a meager 2000 even. That is about even with January sales. Usually, the number of new homes on the market increases as the Spring Selling Season approaches and so does the number of under-contract sales. So far, that is not happening this year.
Denver Homes For Sale
As this article is being written, there still only 3138 active single family listings in Denver, Arapahoe, Denver, Douglas, Adams and Jefferson counties combined. That is a slight decrease of home listings when buyers demand is just beginning to escalate. Spring sales historically are the highest every year.
The result is that many homes now receive multiple offers in the just first few days on the market. Clients of mine recently offered above full price on a brand new listing and lost out to all cash offer. The fact that the contract is not contingent on obtaining an appraisal and financing was certainly more attractive to the Seller. Sellers especially do not want to risk having an appraiser estimate value when every home sells for more than the last comparable home sale.
Well qualified buyers are having difficulty finding and then contracting for the best homes in almost all price ranges and areas of town. The exception is the luxury homes market priced above $1.5m which is still good market but more in balance between buyers and sellers. Good Realtors are now suggesting clever techniques to help motivated Buyers prevail when competing against several other offers.
Denver Real Estate Market Below $300,000
Denver homes for sale priced below $300,000 are facing extreme competition. The number of days on the market in that price range is staggeringly low. Consider that my clients tend to only consider the better Denver neighborhoods and best suburbs. Homes for sale there are selling much more quickly than in typical Denver neighborhoods.
Escalation clauses are common. That is where Buyers specify that they will beat another offer by a specific amount. We had a price escalation clause in two offers last week. We lost one to the cash offer even though our price was higher. The Seller must have known the risk of a low appraisal was high. Plus, why would a seller risk losing the sale at the last moment if the loan was not approved.
Some buyers are removing the appraisal contingencies. Others are removing all the the loan contingencies even if they intend to obtain a loan. Of course, that is a somewhat risky for other than optimally qualified buyers. But, for the right buyer, it allows a buyer to compete against other cash offers.
Some buyers are writing “Love Letters” to the Sellers. “We love your home. You done such an awesome job of maintaining and improving it! We want to raise our family in your lovely home!”
Love Letter To The Seller
Sellers can be flattered. It works especially well when it’s the first “Love Letter” received. It might even induce the Seller to sign the offer right away. Buyers are doing whatever they can to get a Seller to accept their offer in this highly competitive Denver real estate market.
Buyers do worry that they have to “over-pay” to purchase Denver homes for sale. That is true if value is determined on previous sales. An appraisal is evaluation of value based on recent sales. But, they are previous sales and do not necessarily reflect what’s available in the current market at that price. But, the actual, current market values are higher now, is that overpaying? Maybe.
But, if every sale continues to be higher, then the current value is actually higher in a short period of time. Of course, home prices can always retreat later. Is that likely in the current Denver real estate market? Not if the supply of homes for sale continues to outstrip the high demand from home buyers.