INSIDER: Navigating Today’s HOT Market, Without Losing Your COOL

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INSIDER: Navigating Today’s HOT Market, Without Losing Your COOL

With Denver (and much of the nation) experiencing a very low supply of available homes for sale, combined with a strong demand from buyers wanting to purchase– it begs the question from both buyers and sellers; where do we go from here?

Real estate continues to fuel economic development across the nation and Denver is leading the charge. January became the 36th consecutive month of year-over-year growth with prices rising 20% nationally over that 3 year period, according to the Federal Housing Finance Agency. During that time period Metro Denver housing prices appreciated 28%-30%. Fannie Mae (Federal National Mortgage Association) polled senior mortgage executives across the nation finding that 62% expect housing prices to rise over the next year, 33% anticipate prices to remain about the same, and only 3% expect prices to fall.

The market is considered to be well-balanced when there is a 4 to 6 month absorption rate (supply of homes). Over a 6 months’ supply of homes is considered to be a buyers’ market, while 1 to 3 months’ supply of available homes is considered a sellers’ market. In metro Denver, the reduced level of home inventory available for sale, combined with an increased buyer demand, leaves only a 1.5 month inventory- supply is not meeting demand. Denver is experiencing a definitive sellers’ market.

Where do you move?
A recurring theme heard from current homeowners is that they’d consider moving, but are apprehensive about not finding something to buy. Sellers today are in more of the driver’s seat. It’s probable to achieve a price on the high side of reasonable while directing a closing date and leaving time to facilitate locating a new home. You can extend the closing date for 60-90 days or perhaps close (money in hand) and rent-back for another month.

Understanding Supply and demand
Understanding the economic laws of supply and demand is vital in the current real estate market. Depending on your area of Denver and price point of your home, you could potentially have multiple offers within days. It’s the job of your broker to help manage back-end of negotiations, inspections, appraisal, title and closing. Having not just a good, but great real estate professional will guide you to a happy-housing ending.

Weigh Your Benefits
Seller – Imagine selling your house for a significant profit, and buying your next home at an even lower interest rate. As interest rates remain low, it is a great time to take advantage of being able to buy more house. You’ll benefit from our fantastic price appreciation of the past two years while interest rates are still low.

Buyer – Rising home prices would be a fantastic story if everyone already owned a home. However the disparity between rent and income growth has widened and is making it harder, but not impossible for renters to become homeowners. Stay attuned to current market trends and invest in a knowledgeable real estate agent. You too will be basking in the limelight of this powerful seller’s market.

Whether buying or selling a home, understanding your local market will give you the confidence to move forward. Start by following national news related to real estate and the general economy. You will gain a sense of the larger economic picture, and the ability to make well-informed decisions.

LIV Sotheby’s International Realty compiles monthly, quarterly and year-end reports to help consumers make better real estate decisions, whether purchasing or selling a home. To access current market reports visit www.coloradomarketreports.com. To service all of your real estate needs visit www.livsothebysrealty.com.

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