The housing market has been hot for sellers for several years in Colorado and some of them have taken full advantage. Homeowners and land owners have been able to ask for premium prices and, in many cases, they’ve had the luxury of reviewing multiple offers within days of listing their properties. Homes and condos that may need updating, refurbishing, or even major repairs have been snatched up seemingly sight unseen by hungry buyers and investors. Buyers in the Denver Metro Area have lamented their inability to get homes under contract even when they offer the full asking price within days or hours of the home going on the market.
However, this is no longer the reality in Denver. As the market slows and active inventory increases, there are more lines in the water everyday and not nearly as many fish are biting. Buyers are increasingly advantaged as they can take their time, make choices based on quality, ask for concessions, and even offer less than the asking price. The market is not crashing but this feels like a radical shift nonetheless. It’s time for buyers to recognize that this is a time of opportunity, and opportunity always comes with a time limit.
Thirty-two percent of offers written by Redfin agents on behalf of their home-buying customers in November faced competition (one or more competing bids), down from 45 percent a year earlier, marking an all-time low since Redfin began tracking this data in 2011. Redfin – December 12, 2018
For years now, real estate professionals have been wringing their hands, wishing they had bought more property in the downturn. Those real estate barons that were in position to scoop up distressed, depressed and discounted homes in 2008 and 2009, have since made a fortune as home values have appreciated into the stratosphere. Gathering discounted properties in the Denver Metro Area would have made a solid retirement strategy for many of us.
Many flippers have also gone to the sidelines waiting for the market to “cool’. Well here it is. Homes that are in need of updating or serious renovations are no longer fetching top dollar. The peak has passed and prices on the rundown properties that make flipping a viable business model have come back down to earth. The numbers are more reasonable and some properties in need of repair can even be purchased at a discount. Interest rates continue to scare some investors off but those with cash can return to the market with a vengeance. The time has come for cash investment in the Denver Metro Area once again.
Real estate is currently a more stable investment than the U.S. stock market, which became increasingly volatile at the end of 2018. Investment properties may not provide the enormous returns of tech stocks in their heyday, but they also represent far less risk. Homes and condos in Denver can easily be rented for a profit and their value is likely to appreciate steadily over time. Return on investment (ROI) is largely predictable and with proper insurance coverage, any risk can be mitigated. The growth may not be astronomical but you won’t lose your shirt. The economy in Colorado and the job market in Denver in particular make real estate a steady, long-term investment strategy.
Contact me to create an automated search for investment properties in Denver and surrounding areas. As inventory increases, prices are being pressured down. There is less competition for the most attractive properties and there are more homes and condos in need of minor repair. Some condos in the Denver Tech Center may only need a coat of paint, new carpet and some TLC to bring them up to date. It’s time to invest in Denver again and who knows how long this window of opportunity may last.