Our front range housing market is experiencing a resurgence and, as publicized, we have been in a full blown “recovery” for some time now. In virtually every sub market values are up, days on market are down, and inventory and choices for buyers are slim. My colleague, Mike Malec, put together a nice summary of the Boulder data here and Lane Walsh did the same for Denver here. Clients selling in 2014 underscore this point. Here are some firsthand accounts of the results my sellers have achieved this year.
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A nice Longmont town home listed a few weeks ago at $259K and today the seller accepted a cash offer very near full price. In 2011, we marketed the same property in identical condition for $219K and couldn’t compel anyone to even make an offer.
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A Victorian on a well located block in the Highlands just closed at $440K after we received 3 good offers in the first week. This is an interesting barometer of the current market since the property was bought two years ago for $367K. Except for staging and great décor, the owner had not made any substantial improvements to the property.
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A wild bidding war ensued for a rental property in the student district of University Hill. We had 5 offers above list price within 48 hours and ultimately closed at 10% above our initial list price. There is a healthy appetite for income properties in our market!
Conversely, I have been working with several buyers that had to navigate the challenges of purchasing a home in this environment.
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I represented a buyer who made a very strong offer on a downtown Boulder loft that had been on the market for 9 months. We were very close to putting a deal together when a cash buyer swooped in paying more than list price. My buyer ultimately found a great house but wound up in another competitive situation.
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I also represented a buyer in Lafayette /Louisville who was engaged in several bidding wars and finally on the 4th attempt we were successful in executing a contract.
What does this mean for you? The impacts of this market vary greatly depending on your individual circumstances.
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If you are currently paying mortgage insurance, values have appreciated enough in many cases so that this expense can be eliminated with a new appraisal. I can provide an estimated value that will guide you in determining if this is worth pursuing. Also, if you have a 1st AND 2nd mortgage or a line of credit you may be able to consolidate these into one loan with a potentially lower fixed rate with improved loan to value ratio.
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If you became an “unintentional landlord” over the past 5 or 6 years as a result of the market struggles, the values may have recovered enough to again explore a sale. I have assisted several clients this year who elected to rent their property when they could not sell it in the downturn. Now they have been able to sell at a price that was appealing.
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For those looking to sell their current residence and buy again in the same area (to upsize or downsize) the slim inventory can be challenging. The potential to have to find a rental requiring two moves can be unappealing. There are several strategies that may help in making this transition smooth: “leasing back” after the sale of a current home, inserting contract language to make a sale conditional on locating an acceptable replacement home, and “bridge” financing.
Real estate is a very localized business and each situation is unique. If you are considering a move and want to discuss the market as it pertains to your circumstance and needs please give me call.