DENVER — The Denver housing market is sizzling hot and leaving many would-be homeowners out in the cold.
Home prices in the Denver metro area soared more in April 2021 than they usually do in an entire year, according to the latest monthly report from the Denver Metro Association of Realtors. Median single-family home prices reached $580,000 – a Denver metro area record, the report says.
As more people are priced out, real estate agents say they are finding more would-be homeowners are expanding their views of what is desirable.
9NEWS gathered a panel of real estate experts over Zoom to help us make sense of the market, answer your questions and weigh in on all things Denver real estate.
“It’s almost like the list price is considered the base price now. It’s like the starting auction price,” Compass Realtor Kelly Moye explained via Zoom. ”If you can afford $600,000, you’re starting at [$500,000] so you can play the game and you can bid.”
In this Denver housing market crunch, homebuyers are paying thousands over the asking price to even play ball.
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We had to ask our panel of real-estate experts what’s the wildest offer made by their clients recently.
“I’ve got one! The craziest that I have experienced: a property was listed for $545,000 and the buyer offered $625,000 with a $75,000 appraisal gap clause and did not receive the offer," said Muriel Williams, the Denver National Association of Real Estate Brokers president "As a matter of fact, the offer that did win was over $120,000 over asking price."
There are less than 2,000 available homes for sale in the Denver metro area according to the Denver Association of Real Estate Brokers.
Despite that imbalance in supply and demand, a new report by a California-based analytics company CoreLogic contends that home prices in the Denver metro area are the most overvalued than any other city in the country.
“It’s hard to say it’s overvalued when you have that much competition for each property,” REMINGO Realtor Matthew Leprino said.
So, how can you compete? With houses selling for thousands more than they’re listed, how can buyers keep from getting in over their heads?
“That conversation has to happen at the very beginning," said Nicole Rueth, a branch manager at Fairway Mortgage. "If this is a $500,000 home that you’re offering $650,000, what does it look like if that appraisal doesn’t come in and you have to come up with the cash? What does it look like to your reserve?”
The lack of affordable housing is pricing lower-income people and families out and completely changing the fabric of neighborhoods. This proved to be a hot button issue with our panel.
“It’s absolutely something we need to address, and I think our government – city, county and state - can look at options to help supply more affordable housing,” said Mike Papantonakis, the board chair of the Denver Metro Association of Realtors. “I was looking at statistics from the builder’s meeting I was [recently] in, [and] something like 30% of the cost of a home is in the land. We know there’s a lot of land owned by the government, whether it’s a city or county or the state that really isn’t being used the way it could be used.”
Colorado’s affordable housing crunch is squeezing everyone – reaching far beyond the Front Range.
“I had a client who said ‘Hi, I’d like to look at this property,' and I had to Google the town," Leprino said. "I’ve been in this business for 26 years I’ve never heard of the town. Turns out it’s south and east of Strasburg. I hadn’t heard of it, but now I have!”
The soaring prices and frenzied pace of our current market has many would-be homeowners thinking about waiting to dive into the purchasing game: a big mistake according to our experts.
“It’s almost like, can you afford not to get in the game?" asked Verne Harris, the owner of Public Realty Company. "If you’re out there on the fence and if you can afford it, you were probably that same person last year saying the same things when you could’ve gotten the house for $100,000 less than what it is now, so who’s to say next year it won’t be another hundred thousand. The more you sit back on the sidelines not being in the game, it could hurt you even more.”
We also asked our panel viewer questions submitted on our Facebook page.
Watch the entire panel conversation for additional advice about getting in the game, making your money count, and how to make your offer stand out from the rest without offering an exorbitant amount of money.
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