Homebuyers in the metro Denver area are willing to pay big premiums over the list price in what is being called an “insane” market. Whatever it takes to get a contract on a home, buyers are quick to step up to the plate.
The outrageous pace is only speeding up, shattering numerous records, according to industry observers. In an article penned by Aldo Svaldi of the Denver Post, one listing in a Denver suburb generated 74 showings in less than four days and grabbed 15 serious offers from buyers, all above the list price. The winning buyer paid a premium of $97,000.
Of the 13,807 sales in the first quarter examined for the article, 56 percent sold for above the list price and another 18 percent at list price. Of the 935 neighborhoods tracked, 158 or 17 percent had every listing go for above the asking price, and another 150 from 75 percent to 99 percent selling above the initial price.
According to the Denver Post article, the market is about the haves and the have nots. Buyers know they are overpaying and that it stinks, says one analyst. One danger of getting too far ahead of the market is that appraisers won’t support the price, which could cause a lender to reject a loan request, killing a deal and wasting a seller’s time.
For buyers who can’t swallow the idea if paying above the list price, one strategy is to pursue listings that have been priced too high and are lingering. In a market where the average single-family home lists for only two weeks, and where many homes sell over a weekend, sitting out there for a month or more can feel like a rebuke.
Recent numbers from the Denver Metro Association of Realtors (DMAR) show the average home sold in just five days last month. Denver was second only to Tacoma, Washington.
The bidding wars are astonishing, says a leading real estate advisor for a major bank. However, metro Denver is still a great market if you’re moving from California or New York.