Metro Denver/Boulder – March 2023

We are happy to say that spring is almost here, and wow, what a winter we’ve had in Colorado! From the first seasonal snowfall in October 2022, Boulder alone has collected almost 70″ of snow. We’ve also experienced more consecutive days at or below freezing than we’ve had for several years. Weather impacts real estate, so we expect a more robust spring as the temperatures improve.

NEW LISTINGS VS HOMES FOR SALE

February ended with 2618 new single-family listings, slightly less than in January but more in line with historical norms but more than we have seen for quite some time. As Adam Smith showed, price is defined by the intersection of supply and demand, and we continue to have little supply. Buyers see a breath of fresh air when placing an offer and have the time for proper due diligence.

When comparing new listings to total homes for sale, we look at trailing new listing counts. The -18% reduction in new listings is helpful for home sellers, but sales are also down by -25%.  We will need to watch this number as the Spring market comes to life. Overall, it indicates a balancing of the market. Depending on price range and location, we are experiencing a Buyer’s market for the first time in several years—mainly the high-end market. In the entry-level market, we still are finding multiple offers. This is where RE/MAX Alliance offers can certainly help with our Cash Offer Program and buyer-friendly bridge products.

64% of homeowners say they would NOT list their home on the market with rates over 5% since they would be giving up their current 3% rates.

The interesting paradigm we find ourselves in is that homeowners have more equity than at any other time in history, excluding last summer’s peak. Historically, this would be impetuous for homeowners to sell and upgrade or utilize equity for an investment property. We do expect this cycle to happen. Our current rate environment has just pushed it out. Some contrarians are using this time to move forward with their plans before everyone else does and plan to refinance in 2024 or 2025.

AVERAGE DAYS ON MARKET

As reported above, homes have been sitting on the market for longer than they were this time last year – almost three times as long as last year. However, this number is about the same when looking at January.

The buyers that have continued to search throughout the winter months are serious buyers, and many have been rewarded for their efforts since. In the past, some of the best values can be found in the so-called “winter” months. Price reductions jumped this week, which shows that Sellers are listening to the feedback they are receiving and addressing the items necessary to sell their homes.

So sellers, follow these 3 keys…

1: PRICE TO SELL.

The goal tends to be to get as much equity and cash out of your home as possible. The best approach to do this is to thoroughly analyze the relevant comparable sales in today’s market and see how your home compares. You then want to price accordingly. We are still in a good market, but it is more balanced, so a Seller will want to consider this to avoid finding themselves in the price reduction game.

2: CONDITION MATTERS.

A little extra time on the property’s condition can truly make a difference. Buying a home is emotional for everyone. I smile; even investors make emotional decisions, so if we can make that first impression count, it can mean substantially more at the time of sale.

3: BE WILLING TO NEGOTIATE.

The market has shifted to a more balanced market; depending on the price point, we see most homes selling below the list price. We are also witnessing Sellers participating in resolving inspection items again. The best approach is to keep the end goal in line and keep communication open with all parties involved. The seller that understands the mindset of today’s Buyer tends to set themselves up for success in the end. One of our favorite negotiation books is “Never Split The Difference” by Christopher Voss.