Imagine you’re a seller in the process of getting your house ready to sell. You’re cleaning out the clutter, boxing up the personal photos and superfluous items, and preparing for the scheduled staging and photo shoot. You’re mentally ready and maybe even excited for the process to unfold. In your head you’re expecting the house to go on the market on a Wednesday, showings will start that Thursday, and you’ll have multiple offers – all above asking price - to review by the end of the weekend. This is gonna be sweet…
Never in your imaginary seller’s mind would you expect your Realtor to come to you ten days in – after ten or 15 showings and no offers - to talk about evaluating your pricing strategy and reducing the price. Yet, this is the exact conversation happening between sellers and Realtors all over the place.
What's happening to the market?
Has the market shifted? When did that happen? Why are sellers having to think about price reductions? Aren’t multiple, over-asking offers still rampant?
Four months ago the imaginary scenario mentioned above was reality for most sellers in the Denver area. A property went on the market on a Wednesday, showings started on Thursday, multiple offers were submitted by Sunday, and the house was under contract on Monday with a jubilant buyer only too happy to pay way more than asking because it meant they won in the competition. Now, four months later in the middle of July, this scenario is fewer and farther between.
There are two factors impacting the shift in the market. The first is inventory. Historically, inventory is at its lowest point early in the year and continuously increases until about June when it tapers off for the rest of the summer before increasing slightly again in the fall. At this point in time, inventory in the Denver metro area is up 38% from where it started in January 2018. Across all price points, buyers have more homes from which to choose and sellers have more competition; that means a seller may not be able to command as much on their asking price because their buyer pool can now go find another house.
The second factor is the time of year. Most people think of “Real Estate Season” as Spring and Summer, meaning starting in March and lasting until the beginning of the school year. In reality, the market heats up as early as end of January, and by July 4th the frenzy is over. (Activity tends to increase slightly again in September/October before calming down for the holidays.) Sellers trying to sell in June and July often find it frustrating when their houses take longer to sell, especially after watching homes move so quickly earlier in the year; however, these houses will take longer to sell when the inventory is higher and the buyer pool is on vacation.
If you’re a seller in this market, your goal is to make the aforementioned imaginary situation a reality, and that is still possible even though the market has slowed. The way to be successful in that endeavor is to make sure your house shows exceptionally well and to price your house correctly for the market, right from start. It’s not a guarantee, but it’s your best shot at generating strong interest and, potentially, multiple offers. Good luck!
Renee Cohen is a Colorado Realtor with a passion for helping her clients find their dream homes in the challenging Denver market. She loves educating her clients about the market, advocating on their behalf, and helping them make informed decisions. Reputable. Reliable. Remarkable. Real Estate. Contact Renee to assist you with your real estate needs!