Homesellers rejoiced in 2013, with low inventory and high demand driving prices up and time spent on the market down. Homes that languished for four years prior finally found offers – sometimes multiple bids. The buying frenzy grew feverish, with buyers often writing five purchase contracts in hopes that one would deliver. Buyers with cold hard cash, pre-qualified loans and/or no contingency offers found themselves in the best position to have their competitive offers accepted.
Low inventory spurred another financial tactic on the part of buyers – escalator clauses. Buyers made their offer, but included in the contract automatic price bumps (up to a limit they set) if and when a competing offer is tendered.
Buyers scooped up homes with good locations and redone interiors in a heartbeat. Younger buyers, with little time or inclination to renovate, generally chose new or fixed up over good bones with better long-term value potential.
Of course, when sellers become buyers, the tables turned on them. The same low level of inventory meant fewer options available.
This all stands in stark contrast to just a few years ago, when homes lingered on the market for months and years, and prices correspondingly went down.
Sales activity skyrocketed in the spring and early summer, fell off some in late summer, and then uncharacteristically sped up in October and November. By year’s end, our office had sold all of our listings. Year over year sales in Metro Denver rose 4.1 percent in the last quarter of 2013, according to the Colorado Association of Realtors (CAR). This bucked a downward sales trend during the same period for many other regions in the state.
As for 2014, we expect Hilltop and Crestmoor will achieve a better balance between sellers and buyers, mainly because of:
- Rising interest rates
- Higher home prices
- More inventor
- Rising rent costs
- New consumer protection rules for lenders to prove borrowers can repay the loans they are taking on
- Federal housing authority is cutting down on loan size
Whether you’re buying or selling, now is a great time to get into the market – and we can help make the process simple, profitable and even enjoyable!