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.
