Are you looking at the Denver housing market as a first-time home buyer? Are you a seller looking...
Buying or Selling a Home During Uncertain Times
“The quest for certainty blocks the search for meaning. Uncertainty is the very condition to impel man to unfold his powers.” -- Erich Fromm, noted psychologist
This article was updated on April 16, 2020
Are you trying to decide whether to list your home? Wondering if now is the right time to buy a place of your own? Anxious about how your home’s value has been impacted during COVID-19?
It goes without saying that these are some trying and turbulent times. With a volatile and unpredictable stock market, and a news cycle that changes by the minute, it’s difficult to know whether a real estate transaction is a prudent move. While many may want to stay on the sidelines and take a “let’s see what happens” approach, others might feel compelled to act.
Like those who like to take the long-haul, “big picture” approach to stocks and look for opportunities to “buy,” potential home buyers may find they have more room to negotiate terms and get a great deal. Spring is typically when people start preparing their homes to get on the market.
However, this year, we may see a different scenario play out. According to Megan Aller with First American Title, there was a 34 percent drop in showings (i.e. tours of homes for sale) in metro Denver on Wednesday, March 25 when compared to the same day the week prior. We predict that we will see an unusually low number of new listings hit the market this spring as well as fewer buyers actively purchasing homes.
Real Estate Transactions are Exempt from Stay-at-Home Directives
Fortunately, despite the Colorado stay-at-home directive, real estate companies are exempt from the order having been deemed an essential service. As a result, Usaj Realty can continue to serve clients. Whether you are looking for a new home or want to sell your current property, we are committed to helping you attain your real estate goals. We are continuing to comply with social distancing guidelines and follow all CDC, NAR and local and state government safety practices.
The brokers at Usaj Realty are relying heavily on technology to help our customers achieve their home buying and selling goals. By offering virtual tours of properties and using FaceTime and other technology, we provide unique opportunities for our clients to make informed decisions and ultimately be satisfied with their real estate transactions. As of April 16, while there can be no open houses or in-person tours, a buyer is currently allowed to enter the home after they go under contract on the property and the seller permits an in-person inspection. Please reach out to us at firstname.lastname@example.org for the latest information as this rule may change in the near future. Your realtor may also be allowed to enter the home and give you a FaceTime tour (again please check with your broker for the latest information).
Here are Some Denver Real Estate Figures to Ponder
In February, for the eighth month in a row, the number of active listings was down month-over-month in the Denver metro area. For reference purposes, the 2019 inventory peaked in June with 9,520 active listings and sank to an annual low of 5,037 in December.
In January 2020, the year began with 4,941 listings but by February, the number shrank to 4,835. In March, we would normally expect to see this number rise significantly as many early spring listings hit the market. However, due to the COVID-19 situation, it’s likely the number of listings will remain low.
Regardless, the market was extremely active in February: 5,112 new homes hit the market and 5,083 went under contract. There continues to be a strong demand for homes under $500,000 and this sector remains incredibly tight. The average sold price of a detached, single family home was a shade over $487,000 (representing a 5.08 percent increase over last year). The median time on the market was a mere 11 days!
Attached homes (condos and townhomes) in this price range are also selling quickly. The average price is $368,936 and the median number of days on market is just 14 (DMAR).
How Low Inventory Effects Home Buying
As a potential home buyer, there are two ways of looking at low inventory.
1) You have less to choose from. It’s always nice to have a variety of homes from which to select but your price range may limit your options. You may want to consider waiting a few months to buy, broaden your parameters, or consider homes that may be in a different location or don’t necessarily have the features you originally desired.
2) You have less competition. If there are fewer people looking to buy, you may have more wiggle room on the price or be able to negotiate on the closing date. The seller may be more motivated to pick up or share some repair costs.
Lending may also be a bit tricky right now depending on each buyers' particular situation. However, we have some terrific industry partners who are able to find creative solutions and potential low down payment options.
Showings also may be difficult at the present moment. Some tips on home buying in Denver:
- Virtually "meet" with your Usaj Broker for an initial virtual buyer presentation.
- Virtually meet with your lender and get pre-approved.
- Take virtual tours and browse homes online.
- Effective April 8, in-person home showings are no longer allowed. Check with your Usaj Realty broker to learn the latest guidelines.
- If the seller approves, your Usaj Broker may be able to perform a FaceTime tour of the property for you, while practicing social distancing and CDC guidelines.
- Depending on the situation, buyers may be able to view the home in-person for an inspection after going under contract.
- Sign all documents and payments electronically.
- FaceTime inspections may still be allowed. Check with your Usaj Realty broker for the latest information.
- Virtual mail-out closings or curbside closing (a temporary exemption due to COVID).
- Contact your Usaj Broker for an updated list of tips!
Should I Bother Trying to Sell My Home Right Now?
There continues to be high demand for entry-level homes and those priced below $500,000. If your property doesn’t fall into this category, you may want to be a little more flexible with your potential suitors.
While overall there may be fewer people looking to buy, it’s a good idea to be open-minded on price and terms to attract serious buyers. Right now, you’ll be weighing less competition with fewer buyers.
Before going under contract, it’s important to look at the potential buyer’s financial situation. Are they pre-approved? Is it a cash deal? Unfortunately, with many people facing unemployment, lenders may be less likely to approve loans and deals can fall through.
As a result, you may want to consult your Usaj Realty broker and figure out ways to lessen the likelihood that an “under contract” will fall apart. Regardless of whether you decide to list your home now or later, be sure to read our “Selling Your Home 101” blog to help prepare yourself and your home for a successful closing.
While the stay at home ordinance is in effect, your Usaj Realty broker will also help you leverage technology to creatively market your home through various tools like virtual tours, IGTV open houses, videos, and more.
Some tips on home selling in Denver while the stay at home ordinance is active:
- Virtually "meet" with your broker for any meetings
- Your Usaj broker will advertise the home online with virtual tours and videos
- FaceTime potential buyers and give them a "tour" of the home
- Allow buyer agents to conduct FaceTime tours of the home to their clients
- Allow the buyer to tour the home after going under contract
- Ask your broker to host a virtual open house on social media
- Taking extreme care inside the home and practice social distancing best practices
- Be patient, flexible and communicative!
Reach out to a Usaj broker to schedule a Zoom listing presentation where they can explain how they will creatively market your home.
Final Words of Wisdom
“Ultimately this moment comes down to safety, patience, getting creative with technology, and being flexible,” said Jenny Usaj, managing broker/owner of Usaj Realty. “We are here to facilitate your real estate needs during this unprecedented time. Our brokerage will do everything we can to help you with your real estate goals while putting the health and safety of clients and the greater community first. This is an ever-evolving situation, so please reach out to us for the latest updates and how we can help you with your particular goals.”