Here’s a truth I have learned over 20 years in real estate, and through 47 years of life.
When everyone is selling, it’s normally a good time to buy. And when everyone is buying, it’s normally a good time to sell.
I don’t know why this concept is so hard for people to understand… actually, yes I do. It’s the bipolar cousins, fear and greed.
Buyers were fearful of taking action in a dead market, and so they sat on the sidelines in 2008 and 2009 and 2010. Today, the people who shook free of their fears and took action are sitting on sizable piles of equity. All the new buyers I meet with these days universally lament not taking action in 2008 or 2009 or 2010, and can usually provide at least five or six good, thought-out reasons why the timing just wasn’t right for them back then.
Today, it’s sellers who don’t want to play ball. And, in many cases, frankly, it’s greed that’s holding them back. In a hot market, with the roller coaster still on the way up, nobody wants to cash out too soon.
But here’s what I know, having lived through it in two other significant downturns. If and when market conditions change, it will happen fast. And suddenly everyone who has ever considered selling their home will have signs up in the yard within about a week.
The overall price trend in Denver is up, and I expect it to stay that way, especially at the lower price points. There is a supply-demand issue here that is totally out whack.
But one reason for the supply-demand imbalance is that lots of kinda-sorta motivated sellers are sitting on the sidelines, counting their growing equity and waiting for “a better time to sell”, as in when their home is worth even more money than it is today.
The only problem with trying to ride the roller coaster all the way to the top is that you only know you’ve reached the top when you’re already on the way back down.
As I said, based on low rates, a strong and growing regional economy, rapidly rising rents, no shortage of transplanting out-of-staters and zero construction between 2007 and 2010, we’ve got a market with far more buyers than homes for sale.
But builders are building. Apartments are going up everywhere. There are huge corporate forces trying to cash in on Denver’s booming economy while the supply-demand imbalance remains acute. Increasingly, if you are selling or renting a home, these corporate bombers will be your competition, and they have deep, well-funded pockets.
If conditions remain generally the same, if it’s sunny and 78 every day, if foreign governments behave with civility in our globally-connected world, if people continue to feel positive and optimistic about Denver’s economy, if Peyton Manning remains injury-free... then continued housing price growth is a safe bet.
But the world is a dynamic place, and change happens. Should some unforeseen event change that outlook, then watch out.
Because at that point, a whole bunch of kinda-sorta sellers currently fiddling their thumbs will jump into the game, and fast.
And it’s a lot easier to sell your home for top dollar and minimal hassle when there is one “For Sale” sign in the neighborhood, instead of 10.
This may or may not be the best time ever to sell a home. But it’s a good one, and an awful lot of people are sacrificing a good opportunity in hopes of perfectly timing a market that may not give much warning if conditions ever cause it to go the other way.