HEADING FOR THE HILLS

Things to continue to evolve through this summer of adjustments in the Denver housing market.  

A few weeks ago, I listed a foothills property on two acres up in Golden Gate Canyon.  This 2,500 square foot mountain home had continental divide views and offered relatively easy access to the city of Golden and the metro area via a 25 minute drive on State Highway 46.

Historically, properties like this in the foothills outside of Denver have been financially risky propositions.  With a relatively short spring-summer selling season, an abundance of second homes and a disproportionately high number of foreclosures over the years - not to mention ever-present fire risks - I've always preached caution to those who would romanticize a home in the woods.

As a result of these built-in risk factors, selling a home in the foothills has often been a lengthy process.  Through the years, it has not been uncommon to see listings sit anywhere from two to 12 weeks in search of an offer.

Long story short, sensing a potential run on mountain and foothills properties (and wanting to price in some fat in case we didn't get it), we listed this home at more than $30,000 over our most recent closed comparable.  If there's going to be a run on homes in the foothills, I said to my clients, I want to make sure we're priced in front of it and not leaving any money on the table.  

Sure enough, within 48 hours we had eight showings which (under mountain real estate math) would be like 40 showings for a home in the metro area.  We quickly had two over-list price offers, which we negotiated even higher, with a full appraisal waiver from the winning bidder to protect us from the fact we had no comps to support value.

Even more remarkably, in following up with the six other showing agents, the narrative for each buyer was exactly the same:  metro area homeowner, would need to sell their Front Range home to buy in the foothills, and most likely would bring us an offer if we would consider a contingency.  

Let's look at this another way.

If only one-tenth of one percent of the Denver metro area population (currently around 3 million) decided to move to Evergreen, Conifer or Bailey, that would be 3,000 additional residents moving into the area.  Given that there have only been 1,140 total sales between these three communities in the past 12 months, you can see what a dramatic impact even a small shift from the metro area to the foothills would have on prices.  

Going forward, a reliable Internet connection may be more important that an easy commute if you're planning to participate in this new work-from-home revolution.  And homebuyers are apparently will be pay quite a premium to live amongst the trees instead of the tall buildings.