WHAT BUYERS AND SELLERS NEED TO KNOW TO SUCCEED IN TODAY'S MARKET
You’ve heard right – housing inventory is tight on the Front Range. And while low supply can put a pinch on options for buyers, don’t be fooled into thinking that the market is in retreat. In fact, total housing sales across Northern Colorado increased more than 4 percent last year for a new one-year record, even in the face of pandemic restrictions on in-person showings.
Clearly, buyers are finding properties and deals are getting done – low inventory and all.
So how is it happening? Here are some pointers for finding success on either side of the transaction.
Be patient but stay on your toes. It may take some effort to pick out the right home, so it helps to know what kind of home you want before you start your search. And when you find it, you’ll have to act fast. In a tight market, there’s probably somebody – or many somebodies – who want the same property.
Make sure you’re pre-approved for a mortgage, then be prepared to make an offer. It’s likely the bidding will be competitive, and you could have to exceed the asking price. Start with a clear understanding of your budget. And don’t skip the home inspection. Even with the pressure of a fast-moving market, you don’t want to be caught with any surprises after the purchase.
Sure, it’s a sellers’ market, but that doesn’t mean buyers will go for anything with a “For Sale” sign in the yard. Tend to the repairs that need fixing, and don’t lose sight of the importance of curb appeal. Many buyers are entering the market with money to spend – especially with interest rates at historic lows – and they want a house that’s move-in ready. If it’s not, they could drive right past.
Searching. Bidding. Inspecting. Pricing. Showing. Closing. Whether you’re a buyer or seller, there are many steps to a successful home transaction. Working with a real estate professional who is familiar with the local market can help you navigate the trip as smoothly as possible.
Call me to learn more about how to be successful in today’s market.
SUCCESS STORIES: GROUP PARTNERS SHARE HOW THEIR CLIENTS CLOSED THE DEAL
You’ve heard us say it before, and we’ll likely say it again: it benefits both buyers and sellers to work with a real estate professional. We put our experience – and those of our 200+ partners – to work for you! At The Group, we truly support and consult with our colleagues to bring you an unparalleled level of skill and service. These are three recent examples shared by our partners of how they helped their clients be successful.
We met in January and during our first meeting, I learned their price point for a single-family home was $350k-375k. We thoroughly discussed the current market conditions – and the real lack of inventory – so they were fully prepared and aware they would be participating in multiple-offer situations.
We discussed strategies for putting their best foot forward and writing strong, competitive offers. The biggest challenge for them was having extra cash on hand to cover an appraisal gap when offering above list price. They had an extra $7,500 to cover a potential appraisal gap, but after losing out on a few homes, we realized the $7,500 may not be enough. In an effort to find ways to come up with more cash, and after brainstorming with their lender, they opted to go with a zero-down USDA loan so they would have more cash on hand to cover that potential gap. A USDA loan is limited to areas that may be a bit more rural; however, once the buyers learned areas like Wellington and Severance were USDA eligible, they were all in. They are now under contract on a home in Severance and are thrilled to be moving toward a closing in March.
Preparing up front was the key to setting realistic expectations. They were also quite open to a wide range of properties and locations, which opened up their options as well. Working as a team with the lender – such as Group Mortgage, LLC — is crucial.
In mid-December I met with a young man who owned his first home in Loveland, a little 3- bedroom, 1 bath, 1-car garage. He needed more space for his growing at-home business, and found the home he wanted priced at $485k. The sellers weren’t excited to take a contingency of his home sale, and they had another offer.
Due to his equity position in his current home – and the ability to utilize the Guaranteed Move Program from The Group – he won in the multiple offer situation. Those sellers also needed to rent back after the closing, which my client was able to accommodate. We had to be prepared to list his home as soon as his new purchase was under contract, so two days later we listed his home at $325k – a price range in huge demand, and had it under contract in two days! He leveraged the tools available to him, and is now in the home that allows his business to go to the next level.
The Group’s Guaranteed Move Program was needed to close on the sale of his home before he could purchase his new house, as his buyers couldn’t close that quickly.
New-to-Northern Colorado Buyer
I worked with buyers who moved here from Pittsburgh for a job. They lost out on one resale home and were almost ready to pull the trigger on a new construction home. Then we found out about a future home that would be built on a very tiny lot next door that would literally be only 10 feet away, so they did not offer on it!
We looked at homes in Longmont, Loveland, Windsor and Fort Collins; and after a marathon day of showings, we regrouped and dialed in on the things that were most important to them after seeing what the market had to offer. Later that day, as I was working on some preliminary floorplan and marketing info on an upcoming listing of mine for past clients, I had a light-bulb moment; this home fit the buyer’s needs perfectly! I contacted my sellers and explained the situation, and got approval to show the home to my buyers. They did love the house and it is a perfect fit for them. They are now under contract on this house and both parties are ecstatic about the situation; This is scheduled to close on April 2 with a seller leaseback through May 28 to coincide with Mrs. Seller’s retirement from teaching and move to Arizona. The timing works out perfectly as the buyers are in a relocation lease until June 1.
Peak Prices: High Country Housing Costs Climbing at a Faster Pace
For most of us, the fact that housing prices in Northern Colorado continue to surge during the pandemic seems nothing short of astounding.
Based on Colorado Association of Realtors reports, average sales prices for single-family homes in Larimer County increased 9.5 percent – to $522,907 – from January 2020 to January 2021. In Weld County the difference was even greater, rising 12.9 percent to $443,356.
But looking at Colorado’s mountain resort communities might provide you with another perspective.
In Eagle County (Vail/Beaver Creek), average sales prices in January were up 45 percent to $2,414,549; Summit County (Breckenridge/Silverthorne) average prices increased 51 percent to $1,483,863, and Routt County (Steamboat Springs) prices jumped 30.5 percent to $1,128,254. Pitkin County (Aspen/Snowmass) was the exception to those dramatic price gains, increasing only 4.6 percent – to $7,081,178. But single-family transactions in Pitkin County were up 155.6 percent.
The lessons to draw from these statistics are two-fold. First, expensive is in the eye of the beholder. And second, the pandemic has made it clear that people with resources are willing to go where they want to live, whether it’s Northern Colorado or the Colorado high country.
10 MOST EXPESNIVE CITIES IN THE U.S. FOR HOUSING
Speaking of steep prices, how do America’s biggest cities stack up for real estate costs? Move.org, a website that evaluates moving companies and the cost of relocation, reports that San Francisco has the most expensive real estate per square foot at $1,070.92 per square foot. At that rate, a 900-square-foot condominium in the City by the Bay would fetch about $966,000. After San Francisco, Boston is the next most expensive at $742.20 per square foot. Six of the 10 costliest cities per square foot are in California.
- San Francisco, CA
- Boston, MA
- Honolulu, HI
- New York City, NY
- Fremont, CA
- San Jose, CA
- Washington D.C. MD
- Glendale, CA
- Los Angeles, CA
- Oakland, CA
REAL ESTATE BY NUMBERS
$36.2 trillion. Total value of U.S. housing market at the end of 2020, according to Zillow.
240. Number of apartment units proposed by a Denver-based developer near the corner of Precision Drive and Cinquefoil Lane in southeast Fort Collins.
$20.35 million. Price that Arizona-based investors paid for the St. Vrain Village Mobile Home Park, a 139-space community that covers 16.6 acres in southwest Longmont.
87. Number of affordable housing units that Mercy Housing Mountain Plains plans to build on a 6.5-acre parcel in northeast Fort Collins, near the intersection of Lemay Avenue and East Vine Drive.
304. Number of apartments proposed by a Fort Collins developer near the intersection of Harmony and Strauss Cabin roads in southeast Fort Collins. The project is part of a larger 264-acre development that includes The Wyatt, a recently built 368-unit apartment project.
14. Number of hotel rooms in the proposed Flats on Mulberry, located on the southeast corner of West Mulberry and South Howes streets near downtown Fort Collins. As planned, two existing homes on the site will be converted into a boutique hotel.
5.5 percent. How much the U.S. housing market was overvalued as of the fourth quarter of 2020, according to estimates by Fitch, a financial rating service.
107,000. Additional square footage that Loveland-based Lightning eMotors plans to add to its headquarters facility, nearly doubling its existing facility.
$9.8 million. Approximate amount of federal pandemic relief funding that Weld County recently received to assist local residents with rent and utility payments.
$3.6 trillion. Approximate amount of mortgage loans issued in 2020, second only to $3.8 trillion originated in 2003, according to the Mortgage Bankers Association.
$661,300. Median home sale price in Boulder during the fourth quarter of 2020, making it the seventh-most expensive market in the country.
8.93 million. Number of people who moved in the U.S. between March and October last year, an increase of 1.1 percent over the same period in 2019, based on U.S. Postal Service change-of-address requests.
63 percent. Portion of buyers in 2020 who made offers on their homes without ever physically setting foot in the property, primarily due to pandemic restrictions.