Monday, April 23, 2012


More evidence that the real estate market in Colorado has turned… homes that were listed and didn’t sell in 2009, 2010 and 2011… are selling in 2012.

Last week I lost out in a multiple offer situation on a home in Littleton that was listed for six months in 2011 at $205,000, without any takers.  It was relisted for $200,000 on April 14 and went under contract, above list price, four days later, with multiple offers.

The Littleton home didn’t magically change.  It didn’t get new windows, new carpet or a new roof.  No one added new landscaping or fresh paint.  The only thing that changed was the market.

And that’s the big difference in 2012.  Whereas buyers for the past five years have often chosen to deliberate, buyers in 2012 are taking decisive action.  At least the buyers who are actually putting homes under contract, that is. 

When working with buyers, it is increasingly important to make sure your clients understand the dramatic shift that has taken place since last summer.  The way buyers shopped for a home in 2011 is not the way they are shopping for homes in 2012. 

Lowballing is out.  Highest and best offers are in.  Deliberation is out.  Decisiveness is in.  Fear is out.  Confidence is in.

A percentage of the market is still working under an expired paradigm.  And that’s okay, to start.  It's hard to change your thinking, when defensive, fear-based attitudes about housing have been the norm since 2007.

If you are purchasing something as important as a home, you must have confidence about what you are doing.  But after writing two, three, four, five failed offers… many buyers eventually figure it out.  The home buying landscape is different in 2012.

I have used the analogy repeatedly that the housing market of the past five years has been like a sick, bedridden patient.  Foreclosures and short sales have been like a serious illness that kept the patient fevered and motionless.

But distressed homes now make up just 18% of the market, down from 45% of the market 18 months ago.  You can’t foreclose on homes forever, and truth is, since 2008 the quality of home buyer has improved dramatically because of far stricter underwriting guidelines. Most neighborhoods have stabilized, with the exception of the very high end of the market.  Values in many parts of town are (what's that word?) appreciating.

The night is almost over.  Dawn is breaking on the Denver housing market.  After five long years, daylight is coming up over the horizon.