Prices are at record highs and inventory levels are at record lows in what a real estate agent calls “insane”.
DENVER – It’s a difficult time buying a home in Colorado.
How hot is the Denver real estate market? The median closing price for a home in March 2011 was $ 204,000. According to a report by the Denver Metro Association of Realtors, that price rose to $ 401,000 by April 2017 and to $ 475,000 in April 2020.
This year that number has risen to $ 580,000, an increase of more than 23% over the previous year.
While prices are high, inventory is low.
According to the DMR, there were 1,640 lists for single-family homes in April 2021 – the lowest in April recorded. To put this into context, a balanced market is viewed as a delivery time of four to six months. Denver had around 14 days worth of single-family home supplies in April.
When buyers find a home they want, they need to act quickly: homes stay on the market for an average of four days.
Perhaps the group that is fighting more than anyone is the first home buyer. They usually enter the process with dreams big, but with little experience and often fewer financial resources than their competitors.
For the first timer, buying a home can often feel like a heartache. We asked three Denver couples to share their stories about trying to find a home in a historic Denver market.
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CHRIS AND LINDSAY WOLF
Chris and Lindsay Wolf have been married for three years and live in an apartment in Jefferson County. The couple talked about buying their first home for a while and decided to start the process in January this year.
“I’ve been renting for nine years now, it feels like a long time,” said Lindsay. “But owning a house has always been one of our goals.”
Initially, the couple looked for a detached single family home, but quickly discovered that in this highly competitive market with soaring prices, they were unable to find anything on their budget. So they turned to another plan and looked for an apartment or townhouse.
“We looked at more than 50 properties in just a few weeks,” said Chris. “I was encouraged by how many properties we saw.”
While they found plenty of properties to tour, finding the right one within their budget and getting an accepted offer proved difficult.
“It was stressful. I felt very stressed, “said Lindsay, joking that her wedding day was a breeze compared to the stress of buying a home. “There have been many sleepless nights, at least for me, there have been many times when I really thought, maybe we have to move out of the state.”
They hated that option. Chris is from Colorado and Lindsay has lived here for years. The couple have friends and family here and didn’t want to leave because they couldn’t find an apartment.
After a busy few weeks, the couple said they were “lucky”. They were under contract for a property when a deal for a previous property they liked even better failed. They changed plans and made an offer for the apartment they liked best, and it was accepted.
This May, the couple plan to move into their new two-bedroom, two-bathroom apartment near the family in Jefferson County.
“It’s a few miles from where my parents live. It’s much better if we commute to our two jobs. It’s in an area that we really like and that feels closer to our friends and community that we have, “said Chris.
“I’m just very happy that we can stay in Colorado,” said Lindsay. “The fact that we don’t have to move away from our family and friends when that would be more affordable, I just feel very happy that we can stay in the state and place we live in.”
MARCUS AND KATIE KOPLITZ
SHOPPING FOR A SINGLE FAMILY HOME
Marcus and Katie Koplitz have lived in their Capitol Hill apartment for three years and the couple are ready to buy their first home. They own their current home so they have previous experience as a buyer, but this is their first time trying to buy a single family home in Denver.
Ideally, they are looking for a three bedroom, two bathroom home with enough space to entertain friends. If they can find something that also has a yard and garage, they would be delighted.
“About a month ago I had a very different picture of what our home would be like,” said Katie. “But after I go home and see the market, that picture changes.”
The Koptliz remember buying in a highly competitive housing market for their condominiums years ago, but said the experience is barely comparable to today’s housing market. They describe the fast pace with which they find items they like in a small pool of options, try to get a show, and have to make an offer – all within a few days.
Then there is intense competition.
“We took a maisonette tour and bid $ 100,000 above the asking price. We were outbid by [another] $ 100,000, ”Katie said. “That shows you where we are.”
“There were 54 offers for the house,” said Marcus. “Unless you have really deep pockets or are willing to put a lot of money on it, it’s hard to get something in this neighborhood.”
The couple started changing their strategy to become more competitive. They offer to forego some traditional buyer protection measures – such as an inspection or negotiating a price if the house does not evaluate the value. They have savings to make a down payment, but have also taken out a HELOC loan for their home in case they need extra cash to fill a valuation gap.
But they don’t give up.
“What we have achieved … is that we have to compromise somewhere,” said Marcus. “We have adjusted our expectations, but have only remained optimistic.”
The couple moved to Colorado a few years ago and fell in love with Denver. They understand why the real estate market is so competitive and believe that it will likely stay that way for a while.
“I think you will find the right house,” said Katie. “If you… put in a bunch of bids and don’t get them, it wasn’t for you. So just keep looking and hopefully you will find something. “
STEPHANIE ESTRADA AND BRETT HALLAHAN
Stephanie Estrada and her boyfriend Brett Hallahan decided to buy a house in January.
They were on the couch shopping at the time and found they were tired of buying smaller furniture for a small apartment and tired of paying rent too.
“We were originally looking for at least three bedrooms with a basement,” said Estrada.
The couple spent several weeks touring homes and quickly became frustrated with the pace of the property market and unprecedented competition.
“One of the first homes we loved online. We had planned a walk for a Friday afternoon and on Friday morning we got a text [from our realtor] saying [the seller] I’ve already accepted an offer, ”she said.
Estrada said she was very upset after making an offer on a specific house she loved and losing that offer. Soon the couple decided to change strategies.
They said they were looking for a newly built house. And it worked. The couple secured a four bedroom, 2.5 bathroom home with a partially completed basement.
“The new building gave us the opportunity to get a lot without having to compete with people,” she said. “We like the idea that it’s new, that once we move in, we don’t have to worry about what’s wrong with x, y, z and that we can choose and design whatever we wanted.”
The only downside to the new building, Estrada said, is the waiting time. Your house won’t be finished until later in the year. The couple’s lease for their apartment ends well in advance and they try to find out where they live in the meantime. A shortened lease could be more expensive, as could breaking a lease. And while family members have offered to let them move into the basement, Estrada says it could also be difficult to work from home in a family member’s basement.
Estrada and her boyfriend are both from Colorado and frustrated with the challenges of finding a house in their hometown.
REALTOR KELLY MOYE
SPEAKER, COLORADO ASSOCIATION OF REALTORS
Kelly Moye has been a Colorado real estate agent for 30 years. It says nothing at this time in comparison to the current real estate market.
“Insane!” that’s how she described it.
“I’ve been a broker through three ups and downs,” she said. “I never thought I’d have to learn short selling and foreclosures.” We went through this, I thought it was the hardest thing ever, but I’ve never seen anything like it in my career. “
Moye, who works to help Marcus and Katie Koplitz buy their home, said first-time buyers are really struggling to compete with other buyers right now.
“When a homebuyer looks wide for the first time, we love being here in Colorado, getting our lives going and investing in the future – they’re just pumped,” she said. ”
“Then I come in and say – ok. This will be … different from what you thought. “
Rising prices are not a new reality in Colorado. But the competition is more hectic than ever, homes are listed and sold in just a few days, and the buyer’s sacrifices are difficult to trace.
According to Moye, even real estate agents are struggling to guide their buyers through current market conditions.
“As a buyer’s agent, when you represent a buyer, you have to protect their best interests, that’s our job,” she said.
“And it’s really hard to tell them to give up all these rights,” she added. You waive the right to limit your purchase price based on the valuation. Wave the right to do this or that, and those rights are inherently there to protect them. And you are there to protect them. To advise them that they should spend all their money on a valuation gap, skip the inspection, don’t worry about the HOA documents, do your job right, but one would say – you are not doing your job, if you don’t get them a house so you’re stuck. “
But Moye said she was optimistic. She says, in her experience, good broker relationships have helped her buyers thrive now.
While she doesn’t believe the frenzy will last forever, she feels that the competition continues.
“I only hope [first time buyers] keep trying. This market is not going to go down anytime soon, ”she said. “This will always be the path, the path to wealth, happiness and space, and being able to have children and things that people want to do. And I just hope they stick with it. “
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