Hi everyone and welcome to Ask the Colorado Dream House Team. I’m your host Dan Polimino coming to you live from Denver, Colorado as we do on Tuesdays and Thursday afternoons. Thanks for joining us. If you’re new to the show, welcome, and what we do here on this show every week is just try to answer your real estate questions and give you good real estate related information. Stuff that you can use whether you’re in Denver or you’re in Iowa. Most of what we’re telling you is good strategy. It comes from years of experience and it’s good database-driven information.
It might be time to strike as a buyer
Two things we like to accomplish in the show: give you a little market update about what’s happening here in Denver and then answer your questions. All right, so let’s get to the market update. The question is: what’s going on right now that it’s June and things-are-a-changing.
The market is slowing down
So you know that the market got started and it was absolutely red hot in March, April, and May, but things look like they’re beginning to cool down. How would I know that? A couple of signs are on the horizon. During the updates that we get every day about homes coming on the market, transacting, closing, going under contract and so forth, during those updates, we’re seeing a lot of homes that went under contract are now coming back on the market. That means the deal fell apart, right?
When we start seeing more and more homes where it says “Back on the market” that means the deal fell apart, we know that things are beginning to normalize in the marketplace. When I see a lot of listings all of a sudden having price decreases, I know that things are starting to normalize a little bit. Things are getting a little more back to normal. It’s not that frenzy that was April and May. What does that mean for you as a buyer?
Time to strike as a buyer
As a buyer, I think that’s an opportunity for you because if things are beginning to normalize, you may not have to compete so hard. You may not have to pay over asking price for that house that’s in the upper price ranges. There may be more wiggle room here now, right? The seller’s been on the market a month or two, they’ve had a bunch of showings, maybe no offers. Maybe now is the time to strike. That’s on the buy side.
On the sell side, I think there’s a lot of sellers out there that are now having a reality check. They got all hyped up in the market, all the frenzy they read in the media reports and watched on TV and they thought that they were just going to get this skyrocketing price on their house. Now what we’re beginning to find out is that they didn’t get that offer. One of the reasons why they didn’t get that sky high premium price is because buyers are very savvy. They do their homework and as we like to say, “A buyer can sniff out an overpriced listing from a mile away.” Sometimes the buyer knows the market better than the agents and that’s only because they’ve seen so many homes and they know exactly what they can buy at what price.
Newer agents make mistakes
The other thing that we’re seeing a lot of is, and you’ve heard me talk about this before, a lot of mistakes from newer agents on the other side of the transaction. We find ourselves having to save a lot of deals and keep deals together because the agent on the other side of the transaction is not that experienced. When they’re not that experienced they don’t know how to properly advise their client and guide their client. So I find myself doing a lot of teaching and a lot of helping to keep deals together. I’m in the middle of a deal like this right now with a newer agent that just doesn’t know how to advise their client and how to keep the deal together.
I always tell all of our clients it takes absolutely no intelligence whatsoever to kill a deal. Anyone can kill a deal, that’s easy. Keeping deals together when they get hard, that’s where the real skill comes in. Okay, let’s get to today’s questions.
Ask the Colorado Dream House Team: Questions and Answers
Dear Colorado Dream House Team, I always hear buyers are moving into the city in droves. Do you think that’s still true or do you think the suburbs are still preferred?
Well, most statistics say that today’s buyer still wants a single-family home in a suburban area. Yes, there’s been a great migration in Denver of people moving into the city or closer to the city, but on a whole statistically speaking most people still want to live in the suburbs.
Dear Colorado Dream House Team, how long does the average person stay in their home? Well, it used to be five years. It used to be one to five years was the average time and then the crash came, and now post-crash the statistics are showing that the average person is staying in their home eight to 10 years. Now, why is that number significant? Because what you’re seeing right now with the housing shortage and no resell properties on the market to buy, is a result of that. That’s a result of the crash. People got worried. People got scared. They decided to reinvest in their homes, remodel their homes and stay in their homes. And when people stay in their homes longer, you’re going to have an inventory and a shortage problem which is what we’re seeing right now. So this is actually a symptom or an effect of what happened in 2009, 10 and 11.
The other change that we’re seeing is that the elderly are living much, much longer and because they’re living longer they are not giving up that home, right? So typically the average person in the United States is expected to live to 78. That’s being increased and increased and increased every year, and people are living longer, and those homes that normally would come on the market in the form of an estate sale are not, again contributing to the shortage problem.
Dear Colorado Dream House Team, How relevant are agents in today’s internet age? Great question. We get this a lot. Well, the answer the statistics show from the National Association of Realtors that they are still incredibly relevant. In fact somewhere between 82 and 86% of all the transactions done last year were done with a realtor, a professional real estate agent. About 86% of that group said that they were satisfied or they were happy with the experience that they had with their real estate agent, and 88% said that they get their information directly from an agent and not the internet.
So good news for us, I guess. I guess we’re still valuable. I’ll hang around a little while longer. What do you think?
All right, that’s this week’s show. If you have any questions and you want to contact us, firstname.lastname@example.org, 720-446-6325, or you can leave a comment or a message on Facebook. We’ll be back on Thursday about the same time. Have a great week everybody.