As a full time real estate broker in the Denver area for the past 36+ years, I am often asked these questions: “What is the best time to list a property for sale?” and “What is the best time for a buyer to start looking to purchase a home?” There used to be a simple answer to these questions, which we always referred to as the “Prime Real Estate Selling Season.” The Selling Season in the Denver market would traditionally run from around April 1st through July 31st. During this period, most buyers are in the market, looking to purchase a home; so we inform the sellers with this tip and tell them that they would have the best chance of having their real property sold at the highest price in the shortest time period. We likewise inform the buyers that this is the best time to buy because there will be more homes on the market to choose from.
Times Are A-Changin’:
For Sellers: We realize that there is no time like the present to list your home for sale. I strongly believe that we are going to see somewhat of a repeat of what we saw last year. Early on, in January 2013, buyer activity was stronger than usual because of the pent-up demand in the housing market. The inventory of homes was low and as we exposed our new listings to the market, we were seeing buyers’ brokers clamoring to be the first one to show these new listings to their clients, with multiple offers usually higher than the asking prices. As the market moved into the “Prime Real Estate Selling Season,” we started seeing more homes coming in the market for sale and the frenzy slowed way down. Homes were taking much longer to sell and offers were coming in at or below the asking price. This year has started in a very similar fashion wherein we have an all-time low on inventory of homes for sale while buyers were trying to get a jump on the market. We already have had multiple offers on a number of our new listings that we have put on since the 1st of the year.
When it comes to selling, it does not matter how strong the market is. If you don’t have a really good representation, you probably will not fulfill your home’s full potential in the marketplace. We always tell our sellers that fulfilling their goal of selling at the highest price in the shortest time is a simple three-step process: 1. Price it right, 2. Make sure you have it “show-ready,” and 3. Hire a Real Estate Agent or Team that has an exceptional track record and marketing plan. One of my favorite sayings about Real Estate is, “If you can fog a mirror, you can become a Real Estate Agent,” In other words, many people get into this business thinking that it is an easy way to make a lot of money. However, according to statistics, about 90% of the agents will not last in real estate industry. I can attest to this by the number of agents I have seen come and go over my past 36+ years in the business.
Buyers: Now we need to address the buyers. The same holds true, if you are thinking about buying in this market, that there is no better time than the present. You may say, “But you said that inventory is low, so why would I want to buy at this time?” There are a couple of reasons, but I can sum up the main reason in two words: Interest Rates. Interest rates are still at some of the lowest levels that they have ever been at in the history of our country. These lower rates allow you, the buyer, to afford more home value at a lower monthly payment.
We have noticed the Feds adjusting these rates a little higher, and then reducing them a bit, and then raising them a little higher again, and then reducing them a bit slowly. This sort of activity makes the buying public get used to higher rates in general. The problem is that every time they raise the rate, the less that you become qualified for a home. An example of this is: say you take out a $200,000 mortgage at 5% per annum for 30 years. Your monthly principal and Interest (P&I) payment will be $1,073.64. Now if that interest goes up by just 2%, your payment will go up by $257.00 per month or $3,084.00 per year. Don’t get me wrong, 7% is still a great rate compared to the 17% rates I saw in the early 80’s which would have made that same P&I payment to $2,851.35 per month. It is the general consensus by the way that the rates will rise, so the longer you wait, the less home value you will be able to purchase.
For buyers, I will again stress how important it is for you to work with a real estate agent or a team who is knowledgeable on the area or location where you are looking at, on the market in general, and on the different financing options available. They can also guide you when it comes to needing other professionals to assist you in the buying process such as lenders, inspectors, tradesmen, etc.
Again, “Timing is Everything,” so don’t hesitate to at least pick up the phone and start your selling or buying process. We at the Colorado Dream House Team pride ourselves on great service and professionalism. If you would like to talk with us about selling or buying real estate, we are always available and can be reached at firstname.lastname@example.org, www.coloradodreamhouse.com, www.codreamhouse.com or you can call us at 303-829-5900.