When it comes to buying a home in the Denver metro area, speed is the new key word: “the speed at which active properties are going under contract and the speed at which prices are accelerating.”
That’s the observation of Denver Metro Association of Realtors (DMAR) Market Trends Committee Chairman Andrew Abrams, commenting on the group’s market report for February.
With inventory at historic lows – the number of active listings for residential property in February was a whopping 58.14% less than last year – homes are spending a median of 5 days in the Multi-List Service. That means even showings are taking on the pace of the Indianapolis 500.
“Gone are the days of one-hour showing windows,” notes the report. “Showings are mostly limited to 30 minutes if not 15, for those particularly popular homes in the entry to move-up price range.”
Meanwhile, prices continue to rise. The average price of a detached single family home was $632,581—23.15% higher than last year in February.
Even with these prices, buyers are competing fiercely against each other for the trophy. Some listings, notes the report, are seeing more than 100 showings in a weekend, with “upwards of 20 plus offers.” Buyers should be ready to offer up to 20% more than the list price to find a home, notes DMAR. This is at least four times higher than recent years, when homes were often bid up over 3 to 5% of the list price.
“The demand is so great,” Abrams wrote in the report, that he submitted “two separate offers that were $90,000 and $101,000 above the asking price that ultimately did not win.”
In the wake of such intense competition, “Buyers are getting creative to win the offer,” notes DMAR. “Some are letting earnest money go hard in the contract, while others offer to donate money to a seller’s favorite charity to make their offer more personal.”
DMAR reports that detached single family homes are the most in demand. Downtown condos are the only buyer’s market currently, “with multiple properties over 100 days on the market.” But that could change once baseball returns, along with restaurants, notes DMAR.
In all, for most buyers it will take the tenacity of a race car driver to cross the finish line. “Savviness, creativity, knowledge and guts are all components that will help buyers move towards a path of homeownership in this market,” notes Abrams.