High demand, low inventory and what it means for buyers and sellers
Insights from the Q3 Real Estate Market Trends Report
On Real Estate
With fall winding down and winter on the horizon, the traditional seasonal market tempering is also following suit — if just a bit. Buying opportunities still remain, and for those looking to make a move and sell, it’s still a good time.
According to CoreLogic, the last 12 months have averaged approximately 18% appreciation nationwide. The number changes fairly dramatically depending on the specific area/market of interest. That said, a recent survey of real estate entities expects home appreciation to still be on the rise for the coming year, estimated at 5.2% nationwide. Buyers who are expecting or waiting for the proverbial “dip,” and all things being equal, will likely find waiting to purchase may cost even more than today.
For Eagle County, year-to-date indicators show that 2021 will likely be another record year in real estate, spurred by two of the county’s largest sales in its history — one for over $42 million and another at over $30 million. This year has continued to carry the momentum of an active housing market that was expedited by the onset of COVID-19 and one that has been steadily increasing since 2012. The coming year is setting up to be a modified version of the past two years, with buyer demand remaining solid amid record-low inventory levels.
What it means for sellers
Downvalley: Liz Hasley, broker associate for Berkshire Hathaway HomeServices Colorado Properties, notes that while the buyer frenzy has slowed from 2020 levels, there are still plenty of buyers out there. Pricing should be reasonable to attract the greatest number of buyers.
Newer homes in the $1.5M or under category are still having multiple offers come in but not at previous levels. Looking at competitive comps is the best place to start when determining list price. When priced correctly, sellers can expect a greater number of interested buyers, who will likely include escalation clauses in their offer to drive up the sales price.
Current inventory levels for homes $500,000 or less are still selling in a matter of days. Homes in the $500,000 to $1.5 million range have the best opportunity to command top dollar as well as older homes that are staged properly.
Resort/luxury market: Meg Sierant, who closed one of Vail’s largest sales in its history this year, and also a broker associate with Berkshire Hathaway HomeServices Colorado Properties, notes that homes in the luxury market, priced at $5M or higher, are not necessarily going to get into bidding wars.
“We still have buyers looking to buy here and enjoy the mountain lifestyle, but these price points appeal to a small pool of buyers,” Sierant said. “Ultimately, it comes down to how bad the buyer wants the house, the lifestyle, and the location. Be patient. Houses in the $10 million plus range don’t sell quickly and keeping pricing reasonable and in line with location is important. Homes closer to the ski resorts will command a higher price point, as well as homes with unique and upgraded designs and finishes.”
What it means for buyers
Downvalley: While inventory levels are still at historic lows, Hasley notes that buyers should not give up hope.
“You can still get into a home; you just need to make your offer as good as possible,” she notes. “Getting prequalified and knowing what you can afford before going into the search process are also key.”
Hasley also notes that for local buyers, there are assistance programs throughout the county that help residents with down payment funding, including the Valley Store in Eagle, MiCasa in Avon and InDEED in Vail.
“Don’t believe what you read,” Hasley said. “Getting into the game while the interest rates are still low gives buyers a leg up. Even if prices dip, if interest rates go up, buyers will be paying more. Ignore the rumor mill, we are still finding homes and not everyone is in a bidding war.”
She adds: “There is no cost to have a broker be looking for you. Interested buyers should go to a lender and get financing and address any questions. It is not a big deal and does not require a lot of time. With financing in place, a buyer is then positioned to respond quickly and make an attractive offer when the right home becomes available.”
Resort/luxury market: Sierant notes that while the internet offers access to a lot of information, many properties in the $5M+ market get bought off market.
“Realtors have the resources to know about properties that never go into the MLS, as was the case with a recent sale of a luxury home that was on the market but went off and that was when the sale took place,” she said.
Ultimately, the success for sellers and buyers comes down to intimate market knowledge. This is where an experienced broker can be the catalyst to bring expert guidance and help buyers deal with multiple offers and for sellers, help them determine the best offer that will allow for timely closings and maximize return on investment.
Michael Slevin is the president of Berkshire Hathaway HomeServices Colorado Properties.