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So, How’s the Denver Real Estate Market? - July, 2010

By
Real Estate Agent with Bandy Homes

"Why Should I Sell or Buy Real Estate in Denver Now?"

(All real estate data taken from Metrolist, Inc, on July 5-7, 2010.  Denver, Colorado.) 

Market Reason 1:     Low Interest Rates are Attracting Buyers! 

Your buying power today is very strong with interest rates at 40 year lows, with rates in the 4.5% range for 30 year fixed conforming loans.  A principal and interest loan of $300,000 at 4.5% interest rate has a payment of $1514 per month.  If the same rate were at 6.5%, which is a good prediction for one year from now, the payment would increase to $1886 per month or $372 more, times 12 = $4,464 extra dollars/yr. in payments.  Since the average buyer lives in their home 7 years, the total savings in payments for buying today is $31,248 over the 7-year life of living in the home.  What would you do with $31,248 extra dollars? 

A Seller's position of selling in the lower to mid price ranges is good today.  If you own a home between $250,000 and $500,000 the monthly supply of homes in your price range is 7.7 months supply of homes, with an absorption rate of 933 homes per month.  Homes that show well and are priced well are selling.  

Market Reason 2:     Upper Price Range Inventories are slightly decreasing. 

It's a good time for buyers who are going to buy any property above $500,000 as the inventory dictates you can make a good purchase at below building costs.  The monthly supply of homes between $500,000 and $2,000,000 is 21.7 months with an absorption rate of 188 homes per month.  The odds of selling a property priced between $500,000 and $2,000,000 over the next three months is 13.8%.   This puts the buyer in the driver seat when negotiating on a property. 

A seller needing to sell in this price range can sell as shown by the fact that 6 homes per day are selling in Denver between $500,000 and $2,000,000.  Sellers that have homes that are in move-in condition and priced appropriately will sell. 

Market Reason 3:     Terms will drive the market for the balance of 2010.   

Buyers can create terms not normally found in the marketplace.  Every purchase has three components to the transaction. 1. Price  2.Terms  and  3.Time.  Knowing how to negotiate all three components makes for a "Perfect Storm" for buyers getting not only a good price, but terms that will not be available in future markets. 

A seller can get creative, knowing that buyers, especially in upper price ranges, have the upper hand.  Learn to position the terms of your home based upon buyer needs.  For example, in lower price ranges, prepay 2 years of HOA dues, since monthly payment for First Time Home Buyers is the most important buying decision.  In upper price ranges, buy down the rate from a current jumbo rate of 5.5% to 2.5%.   When you supply an interest rate of 2.5% on $1,000,000 loan amount, the payment is $3,943 per month for the first year.  This term will cost the seller money, but less than dropping the price every two weeks. 

What should sellers do in today's market? 

•·              Be the entry price point in your area or offer extraordinary terms to attract buyers.

•·              Consider alternative financing methods of utilizing your current loan to help a buyer buy that may not have the qualifications to do so under today's lending guidelines.  Seek the advice of a professional to describe your options.

•·              Make your home stand out from the competition. 

What should buyers do in today's market? 

•·              Leverage your buying power with the low rates.

•·              Financing Terms could make an offer very attractive for you.

•·              Get Pre-Approved to Buy like a Cash Buyer.

 

If you're thinking of selling or buying a home in Denver or a house in Aurora Colorado, contact the Bandy Team for expert assistance on these issues.  We can guide you through the process to get the best deal in this market.

Marianne Bandy
The Bandy Team 
RE/MAX Professionals - Denver, CO 
"From Our Heart to Your Home" 
303-746-7799 cell

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