or many, the daily commute to work is just a short stroll from one room in their home to another, traveling is a reality again after being little more than a fantasy, and most of us have mastered the art of unmuting ourselves during a Zoom meeting. But even with how much has changed, many things have stayed the same – one of those things being the fast and furious pace of the real estate market.
Both here in Colorado and around the globe, homebuyers are up against fierce competition for a limited number of available homes, many of which are selling for over asking price in a matter of days. This upward trend in real estate activity has people wondering how they will ever be able to win in this market. By demystifying what’s really happening in real estate and understanding what’s driving the housing boom, consumers can better navigate the market and improve their chances of finding success.
or many, the daily commute to work is just a short stroll from one room in their home to another, traveling is a reality again after being little more than a fantasy, and most of us have mastered the art of unmuting ourselves during a Zoom meeting. But even with how much has changed, many things have stayed the same – one of those things being the fast and furious pace of the real estate market.
Both here in Colorado and around the globe, homebuyers are up against fierce competition for a limited number of available homes, many of which are selling for over asking price in a matter of days. This upward trend in real estate activity has people wondering how they will ever be able to win in this market. By demystifying what’s really happening in real estate and understanding what’s driving the housing boom, consumers can better navigate the market and improve their chances of finding success.
“We are often quick to blame the economic factors for the ‘supercharged’ state of the market, but a lot of this pressure is coming from people and their passion for finding the right house in the right community,” noted Shannel Ryan, president of LIV Sotheby’s International Realty, Metro Denver. “The love that people have for Colorado living is unlikely to fade and that’s part of what makes our communities so special and what is fueling the elevated market activity.”
With more homebuyers relocating to Colorado, the ongoing inventory limitations along the Front Range continue to present challenges. The lack of available homes ignites a chain reaction of increased multiple-offer situations for sellers, in turn causing buyers to place offers over asking price in order to purchase homes as quickly as possible. This cycle has increased the speed of the market and the average sale prices for properties in many communities.
This trend is also seen at a national level. As Bradley Nelson, Chief Marketing Officer of Sotheby’s International Realty, noted in the brand’s 2022 Luxury Outlook, “The end of last year showed signs of a slight shift in the frenzied market of 2021—including fewer bids on houses, and homes spending a little longer on the market. But a true buyer’s market isn’t likely, as people continue to move, and real estate is considered a hotter investment than ever.”
As we progress further into 2022, it is becoming clear that real estate remains a top priority for improving one’s lifestyle and financial future.
One of this years biggest concerns for homebuyers is the rising interest rate. The notion of increased rates coming later in the year has prompted more buyers to dive into the market sooner than they may have anticipated, which in turn, is encouraging sellers to do the same.
“We hit the ground running this year harder and faster than we did in 2021,” said Megan Sisk Aller of First American Title. “Our buyer demand is so incredibly overwhelming. Considering interest rates starting to go up, the fence is the worst place to be when you’re in this type of market. Sitting on the fence means that you’re losing money because prices are going up, as well as interest rates, which impacts affordability.”
So far this year, there has been an early onset of buying activity. During the month of January, there were 73,970 detached residence showings in the greater Denver Metro area alone. This sooner-than-normal start to the selling season means that consumers should consider if their approach to real estate is going to yield them the best results. Here are some tips to get started.
If considering selling a home, get into the market as quickly as possible. During a time when inventory is very limited, almost any listing that enters the market will immediately be swarmed with attention from eager buyers. Waiting until summer, when inventory is typically at its highest, may result in a lower closing price and more time spent on the market as buyers get distracted by the other homes that are available to them.
Accurate pricing is critical to success. Over-pricing a home simply because homes are selling for higher prices is not a winning strategy. Working with an experienced real estate professional will help determine the best price that will meet each seller’s financial goals and attract motivated buyers in a timely manner.
Currently, the real estate markets in Colorado are seeing an influx in homebuyers moving into neighborhoods outside of the metropolitan areas hunting for additional space and privacy, resulting in more competitive suburban marketplaces. Buyers looking for slower-moving markets may prefer to start their home search in the city, where properties, specifically townhomes and condominiums, are spending slightly more time on the market.
When selecting your broker, it is important to ask questions, learn more about their skill set, inquire about their past clients, and discover what their experience brings to the table. Consider what unique benefits their brokerage offers and the tools that they will use to help you succeed.
These days, everyone knows at least one friend, family member, or acquaintance with a real estate license – but finding someone you trust with your financial and lifestyle goals is more important than appeasing others. In this market, who you work with could make all the difference in the world.
Start your real estate journey toward finding the perfect home, selling a property, or creating the life you love in Colorado with LIV Sotheby’s International Realty.
- How many competing offer scenarios have you navigated representing a seller?
- What are some of your best buyer strategies?
- How many sales has your company closed within this price range?
- Can you provide a list of broker and client references?
- “Luxury Outlook 2022.” Is There Relief Ahead From The Market Frenzy, https://www.sothebysrealty.com/eng/is-there-relief-ahead-from-the-market-frenzy.
- “‘Mortgage Rates Jumped to the Highest Level since the Emergence of the Pandemic’: Americans Are Pessimistic about Purchasing a Home.” Real Estate News & Insights | Realtor.com®, 10 Feb. 2022, https://www.realtor.com/news/real-estate-news/mortgage-rates-jumped-to-the-highest-level-since-the-emergence-of-the-pandemic/.
- Wolfson, Alisa. “5 Economists and Real Estate Pros Share Predictions for the 2022 Housing Market.” MarketWatch, MarketWatch, 7 Feb. 2022, https://www.marketwatch.com/picks/home-price-growth-may-return-to-normalcy-5-economists-and-real-estate-pros-predict-what-will-happen-in-the-housing-market-in-2022-01644234946?mod=realtor.