As badly as I’d like to make jokes and puns about Corona the beer and Corona the virus, I’m going to resist. It’s overkill at this point. If you’re not aware that there’s a nasty virus going around, and that that virus is scaring the hell out of investors everyone; I don’t know what to tell you. I guess congratulations to you for being unplugged from the rest of the world for the last few months. Must be liberating.
Through that lens, fear is very bad. That fear is manifesting in those markets right now in the form of some aggressive corrections. We’re also feeling it in our regular, daily lives as production and manufacturing in many parts of the world has slowed significantly, if not hit a brick wall. If you are active on social media, or are a Costco member, you also already know that there’s no toilet paper. Anywhere.
When those of us in the real estate world hear the word “invest,” the stock market and our retirement accounts are the last things on our minds. Naturally, we think about land, what’s on it, and why we should all be buying or selling some. It’s a pretty amazing time to be on either side of that fence in the Denver Metro area.
They’re hovering around 3.29% right now. At the beginning of last year, interest rates were 4.5%. That’s a difference of about $500 per month at a $400,000 purchase price. Yes, it means that, as a buyer, you’re going to have to fight. You’re likely to find yourself in a bidding war and going above asking price to get the home you’re looking for. It’s hard. It’s awful. But right now, it’s as affordable as its been in a while because of these rates, and it’s going to be an investment that pays out when the time comes.
That $500 per month you’d be saving now will be in jeopardy by this time next year as the average and median home prices are just going to continue on their upward trajectories, to say nothing of where interest rates could be by then.
Buyers are gobbling up homes as quickly as they come on the market. They can afford it, and you have equity to tap into. There’s never been a better time to sell in Denver. At the end of February, there were 4,385 homes active on the market. That’s down around 100 listings month-to-month, and 20% year-over-year. Our market is averaging 12 showings per listing. The historical average during this time of year is 9 showings per listing.
I haven’t been to a showing in which my clients and I were the only group in the home since December. I’ve been in multiple open houses that are basically revolving doors of buyers. Every offer I’ve submitted in 2020 has been competing with other offers.
So, wash your hands. Give me a call. Let’s sit down over coffee and discuss any other questions you have. As always, I’m happy to chat whenever, and wherever there’s toilet paper. Happy almost spring! Until next time…