The Seasonal Buying ApproachLIV Sotheby's
Many potential buyers (and sellers) will wait for the warmer months to buy or sell a property. Conventionally, those are the “hot” seasons when a majority of homes will be sold. School is out, the grass is greener, and most people think it’s easier to move. All the above is pretty much correct. And nothing in this article will impact any seasonal buying traditions, however there may be some information that could influence what is best for you.
According to “Nerdwallet.com”, taking info from Realtor.com, prices are typically 3% less nationally in the colder months, with January carrying the lowest level of the year. Properties take a little longer to sell as there are less buyers competing.
In Denver, as reported by REColorado, active metro listings were down 6% from 10/15 and 11% from September. The average sales price for single family detached homes broke $440,000 which is over 9% better than October last year (attached homes averaged $289,000). The year over year average for all homes sold is $398,588.
More expensive (or luxury) homes are taking longer to sell both locally and nationally. It is still a healthy market where a bidding war can take place, but it is important to note that luxury inventory levels (in metro Denver) are over 20% higher than the 4th quarter of last year. Homes that sell in 30 days or less are priced competitively from the start, especially during fall and winter.
Zillow can be helpful to a certain degree. But I would have fun with the site and then contact a live real estate expert. Zillow is an automated valuation system that depends on basic property characteristics like beds, baths, and square footage and designates values without seeing a property. Their systems wouldn’t know the difference between orange shag carpet or imported Brazilian Cherrywood floors.
There is more to the process than simply selecting a property and making an offer. Denver will continue to enjoy solid population growth. Homebuilders have not been able to keep up with residential housing needs. Builder hurdles include permit delays, higher regulatory and labor costs, finding skilled workers, neighborhood concerns, obtaining financing, and Denver Construction Defects laws. Colorado will gain 100,000 in net population by the end of 2016 and they will need somewhere to live.
If you have ever given thought to purchasing an investment property (rental), the “near future” would be good timing. If cash isn’t readily available, perhaps leveraging your current residence to get the down payment is a good possibility. Every year I have clients that call to ask if they can hold onto their current home as a rental, and then purchase a new home to live in. Whether you are beginning to build your real estate portfolio or simply adding to it, this is a great time to examine this investment opportunity.
Rental properties are becoming a very attractive and effective path for solid long term investors. Cash flow from rental income can produce nice returns while letting tenants pay the loan down for you, the potential raising of rent(s) and value appreciation can be an added bonus. Rents are strong, vacancies are low and interest rates are still low (a perfect storm). Check with your CPA about how you can manage a rental in your SEP IRA or compare to a 401K. Many opportunities are right in front of you…ask about, look for, and be proactive.
For more information, contact downtown managing broker, Steve Blank, of LIV Sotheby’s International Realty at 303.520.5558. To service all of your real estate needs visit www.livsothebysrealty.com.