Saturday, December 19, 2015


Strategy evolves and changes over time, and smart agents make changes in their approach to reflect the market.
For most of 2015, I have used a pretty simple formula to market my listings and get great results:

- Clean, declutter and stage;
- Photograph professionally;
- Price it appropriately at a number that will appraise;
- Aggressively "pre-market" to prospective buyers and agents;
- Encourage sellers to clear out for a long weekend of uninterrupted showings;
- Stream as many buyers and agents as possible through the property in a short period of time;
- Facilitate a bidding war;
- Vet and present offers;
- Determine what the top of the market will bear, write a "reverse offer" reflecting those terms, and present those terms to our hand-selected buyer/agent for ratification.

I don’t want to oversimplify this.  Every one of these steps is vitally important, and costly errors can be made if any stage is handled without proper care and precision. 

But this formula has allowed me to sell 27 listings this year, 23 of which sold inside of 10 days, with the longest market time being just 19 days.  Twenty sold at or above list price. 

(I also had the discipline to turn listings away when they were going to be conspicuously overpriced or if the sellers had totally unrealistic expectations.  While many agents are programmed to take any listing agreement, fully understanding that they will need to “wait out” the sellers and eventually beat on them for necessary price adjustments, I question the integrity of such strategy.  In a hot market, get it ready, price it right, and let the market determine value.)

It’s been interesting to watch how buyers and buyers’ agents have responded to this type of marketing. 

Early in the year, if we determined that a property would be on the market for 96 hours, ending at 5 p.m. Sunday night… agents didn’t seem to give it much thought.  

If they saw it Thursday, and liked it, they wrote an offer.  If they saw it Friday, and liked it, same thing.  In fact, early in the year I often ended up with 10 or more competing offers, in large part because agents (especially new ones) were undisciplined about submitting offers and didn’t really think through the strategy.

At the peak of the spring market, one of my listings drew a total of 32 offers, each leveraged on top of the other to generate a final sales price $33,000 above the original list price. 

Over the second half of the year, though, it seems more agents have caught on.  Now, there are fewer offers, and they arrive later in the game.  The best agents wait the process out, staying in communication throughout the process to monitor and gauge what their clients are up against. 

Strategically, the worst move you can make is to be the first agent to submit an offer during an open bidding period. 

And why is that?  Because the truth is, it’s very likely the listing agent (with the seller’s blessing) is going to attempt to use that initial offer to leverage higher and better offers from other agents and buyers. 

And if you can manage to generate three… four… five… or more offers… the more likely it is you can leverage the intense competition to not only raise the price, but gain other concessions such as shorter inspection periods, a modified (or waived) appraisal provision or an earlier loan objection deadline.

Here’s the truth:  if you’re in one of these bidding wars, the longer you wait to submit your offer, the more likely it is to be chosen.  Because if you really want the house, and you can wait out the process, chances are you can figure out what it’s going to take to win. 

And then you either write that offer, or you don’t. 

That’s always been the game, but with so many new agents flooding the market, especially at the lower-end, a lot of homes have been selling to poorly represented buyers at inflated prices.

Now that the buyer pool is finally starting to thin, if only just a bit, you could argue that buyers are better positioned to find value.  You don’t want to compete with people who don’t know what they are doing. 

Even with overall values higher today than they were in the summer, you’ll get a better deal competing with two or three logic-based buyers in a more stable market than competing against a dozen or more emotional ones in the midst of a frenzy.  

Friday, December 11, 2015


The CU Leeds School of Business released its 2016 Economic Forecast for Colorado last week, and the report has a predictably upbeat tone to it.  Record low unemployment, record high population growth, record high home prices and record high per-capita income are all in the forecast for next year, continuing Colorado’s emergence as one of the country’s elite regional economies.

There is a lot to sift through in a 133 page report, but when talking economics my focus is always drawn to employment, income and migration.  

Employment looks great – according to Leeds, we have 2.46 million jobs in the state, and that number is expected to increase by another 100,000 in 2016.  Per capita personal income is also at a record level, $48,869.  The state picked up over 101,000 new residents in 2015 and we are expected to grow by more than 95,000 in 2016.  That’s crazy growth, and it fuels unbelievable expansion and opportunity.

California has now supplanted Texas as our top importer of new residents.  In 2014, more than 24,000 Californians moved to Colorado.  Nearly 30,000 more came this year, and next year the number may top 30,000 for the first time. 

That’s nearly 90,000 Californians in three years, a number equivalent to the population of Boulder or nearly three times the population of Wheat Ridge.  Californians now account for 30% of our population growth. 

Because of my own California roots, this trend is one I’ve been paying close attention to for many years.  We left because it was my belief that the value proposition of living in California at inflated bubble-era prices simply wasn’t worth it anymore.  Housing was too expensive, the public schools in most areas were a wreck, traffic was a never-ending irritation and too much of life was spent fighting to support a lifestyle that simply didn’t deliver enough value.

Ironically, the collapse of the housing bubble actually created a brief era of renewed-affordability (if you still had a job), but by 2011, home prices began surging and the same issues began to surface again. 

Today, with California home prices back to their bubble-era peak, the middle class must once again decide if marginal schools, ridiculous traffic, and endless urban sprawl are worth a $4,000 per month mortgage payment and an occasional trip to the beach.

Since leaving 10 years ago, I’ve maintained that California is a great place to visit.  It's a fine place to live if you’re super rich or super poor.  But if you’re in the middle, the battle is real and the returns are diminishing.  

It’s Millennials and the middle class that are fleeing California in the largest numbers.

Face it, if you’re 25 years old, fresh out of college with $80,000 of student loans and looking to stay in Southern California or the Bay Area, your options are extremely limited.  Pay $2,500 - $3,000 per month to rent an apartment, live with your parents, or find a partner and buy a tiny little two bedroom ramschackle condo backing to the interstate. 

For the same money, your housing options in Colorado seem like utopia.  Your job prospects are unbelievably bright here as well.  And while rush hour traffic on I-25 has definitely worsened, it can’t hold a candle to twelve lanes of gridlock at 5 o’clock on the 101. 

I was recently talking with a client about the impact of the California exodus on the Denver housing market, and I put it this way.  The problem California has is that people can stay there and people can leave there… but it’s darn near impossible for anyone to go there.  California’s top two export items are the iPhone and the middle class. 

While I still have many friends who remain behind, my desire to go back is zero. 

Each morning, when the sun rises up over the eastern plains and brilliant Colorado sunshine comes pouring into our home, I give thanks for the decision we made a decade ago.  And with each spectacular sunset over the Rocky Mountains, my gratitude flares again.  

What's happening here is not surprising to me.  I'm just surprised it took so long for everyone else to figure it out.