October was yet another record-destroying month for the Denver housing market. At this point, the numbers pretty much speak for themselves:
- Lowest October Active Inventory of Homes for Sale - 4,187
- Previous October Record - 6,325 (2017)
- Lowest October Absorption Rate - 0.78 months of inventory
- Previous October Record - 1.42 months of inventory (2014)
- Lowest Active to Under Contract Ratio - 0.55 (all-time record low)
- Previous October Record - 0.92 (2014)
- Previous Low for Any Month - 0.60 (May 2015)
- Lowest October Median Days on Market - 6
- Previous October Record - 10 (2015)
In summary, we have the fewest number of homes for sale, the fastest absorption rate for that inventory, the lowest number of active listings relative to homes under contract, and the fastest market velocity ever recorded for the month of October in the 32 year history of the Denver MLS, which dates to 1988.
Just in the past few months, I've had listings which drew 64 showings and 16 offers, 39 showings and 16 offers, and 29 showings and six offers. Those homes sold $46k over list price, $40k over list price and $11k over list price, an all-time high for any home in that particular neighborhood.
Trying to buy in this market is like trying to sprint across 10 lanes of I-25 at high noon. Good luck with that. On the listing side, it's about managing a huge number of showings, a high number of offers and an extreme amount of emotion.
And then not blowing it once you go under contract.
I always tell my sellers that until you sign a purchase contract, you are in control of the process. You get to define the terms of engagement, decide what terms you want to counter, and figure out how much higher you can squeeze your top line number without breaking the will of desperate buyers.
But once you sign the contract, control shifts to the buyers.
In 2020, what that means is that you are much more likely to get torpedoed during inspections (no matter what they wrote in Additional Provisions or how many times the buyer's agent told you on the phone they would take the home "as is").
Buyers who are paying all-time high prices and who are having to climb over the figurative cold, dead, bodies of six or 12 or 15 competing buyers just to get under contract are going to more likely than not come calling for that pound of flesh during inspections. I call this process the "clawback", and while my sellers don't like hearing it, it's what is happening. 
Extreme price aggression by sellers will lead to extreme vengeance during inspections by buyers, and it's just the nature of this market in 2020.
What you don't want, as a seller, is to overplay your hand to the point where you lose your first buyer, because the wave of emotion that led to an over-the-moon offer is very likely gone for good when you come back on the market. You'll get your home sold, eventually - there's no worry about that. But the bidding war and competition that results in all those offers is fueled by emotion, and when your home randomly re-appears on the market 12 days after it went under contract, all those buyers who were willing to chop off body parts to be considered first time around are often not so charitable on the second go of it.
The art of representing a successfully representing a seller in this market is get the best terms and price you can, coupled with a identifying a competent agent on the other side of the deal who has coached and schooled their buyers about the realities of this market, plus a local lender with some accountability.
Buyers' remorse is far more common among buyers who don't feel well represented by their agents or abandoned by their (out of state) lenders. Now more than ever, this is a professionals' market, and what professionals do much better than their newbie counterparts is to set and manage expectations.
How much longer will this market allow sellers to run roughshod over buyers?
That's the $64,000 question. It won't be this way forever, or even much longer, in my opinion. Next year, when foreclosure and eviction moratoriums are lifted and the reality of our broken economy sets in, there will be more sellers.
But for now, sellers are in complete charge of this market. Which means it's a great time to sell a home.
