Five Essential Things You Need To Know About the 2016 Summer Home Buying Market
This year has kicked off with an array of experts trumpeting the Denver housing market’s strength and resilience. Inventory is at record lows, home prices continue to rise, and foreclosure activity has ebbed to lows not seen since before the 2007 downturn. Spring and summer is the time for selling houses. The months of April, May, June, and July typically account for more than 40 percent of all housing transactions annually, thanks in large part to good weather.
- Inventory shortages: The number of available homes in metro Denver has plunged to record lows, thanks to both an abnormally small supply of existing homes for sale and a dearth of new construction not keeping pace with the current demand. Today there are only about 5,000 properties on the market. During the downturn there were over 30,000 on the market! The tight inventory makes it a great time to sell a home and a challenging time to be a buyer. With my experience and expertise I can help you with either. Call me and let me show you how.
- Increased Competition: In addition to a dwindling supply of available homes, the number of buyers has surged. And not just traditional buyers – investors have comprised a sizeable chunk of the buyer pool since the downturn and continue to do so. Real estate investors are responsible for about 25 percent of the existing home sales each month. It’s not uncommon these days to see streams of buyers along with their agents walking into homes as we are showing property.You, the prospective buyer, need to be prepared to move fast if you find a property you’d like to buy. “Buyers need to be patient because many will be outbid by others and might have to bid on multiple homes,” cautions Jed Kolko, chief economist of Trulia. Yes, indeed.
- Cash is Still King: Given the steep competition, all-cash buyers who can close a deal relatively quickly offer great incentive to sellers. “Cash will still be king if there are multiple bids because from a seller’s view, they want a deal with fewer hiccups, “says Lawrence Yun, chief economist at the National Association of Realtors. My sellers are surprised to hear that about 30 percent of home sales each month are all-cash purchases. For the 70 percent of buyers who purchase with loans, strong lender letters issued by excellent loan officers are critical.
- The Good News: Lending Tree chief executive Doug Leboda says in light of the recently unveiled new home-lending standards, lenders are slowly starting to make it slightly easier to get approved. Talk to a couple of lenders, they’ll tell you things have improved over the past few years on the loan front. Take the time to find a great lender, it’ll make a big difference in your ability to purchase a property.
- More Good News: We are seeing a definite correction in the appraisal business. A few years ago appraisers were consistently under-valuing properties, reacting to the over-conservative nature of their shell-shocked underwriter patrons. Today we are seeing the vast majority of appraisals coming in at value, killing far fewer deals than in the past.