What is the Hottest Price Range?

What is the Hottest Price Range?

The hottest price range in Denver is where the most sales are happening, where homes sell overnight and Sellers get multiple full-price offers. This is good information for both buyers and sellers: buyers need to know how competitive the market will be for them; and sellers can use this information to best position their home price for a quick sale.

Price Buckets

A price bucket is just a way to group products by price.  For example homes between $150-250,000 might be one bucket, $250-300,000 the next, etc.Denver MLS areas

You can make the buckets any increment you want, and it might be true that different areas have different hot buckets.  For example, in Denver, Metrolist divides Denver County into 5 geographic areas, and the surrounding counties are split up also.   Here are the geographic areas for Denver in MLS:

Notice there is a Northwest area (DNW), Northeast (DNE), etc. plus Downtown (DTD).  Although buyers and sellers often use zipcode searches (because some of the internet sites are set up that way), most brokers primarily use MLS Areas to begin a search, and it’s also the way historical data (number of sales, prices, time on market, etc.) is collated in MLS.

What I’m suggesting is that you might want to make a list of  “buckets” for the MLS area in which your home is located.  Why?  Because they’re going to be different for each area. Then when you list your $600,000 home in Northeast Denver, you won’t be as surprises to find it’s not getting the same activity as your neighbor who is priced at $350,000.

Denver Southeast (DSE)

Bucket_dse_2013Notice that the “hottest” price bucket in Southeast Denver is $250-350,000.  With about 450 sales so far this year, it’s 50% stronger than the next best bucket ($350-450k).

 Northeast Denver

Now let’s look north of Colfax Ave. and see that the hot price bucket is in a slightly different market segment.

Bucket_dne_2013In this area, the hot segment is $150-250,000.

Using Price Buckets in Home Pricing

Home Sellers might want to consider the distribution of sales when pricing or re-pricing their listing.  If you have a $675,000 home, for example, your odds of selling go way up if you move it into the next lower price bucket.

The owner of a $575,000 listing in Northeast Denver more than doubles their odds of selling by dropping the price under $550,000.

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What’s a Good Comp?

What’s a Good Comp?

“Comps” are Comparable

When pricing your home, or before making an offer on one, you’ll want to make sure the price is right.  To do that, you and your agent will compare it with similar homes that have sold.  Since no two homes are exactly the same, you’ll make adjustments to arrive at the current value. Here’s what matters most . . .

The Ideal Comps:

  • Similar size, model, style, quality of construction and condition.
  • Similar community: proximity to amenities, quality of schools, walk/bike trails, etc.
  • Within a mile of subject property.
  • Sold within the past six monthls.
  • Within 5 years of same age.
  • No more than 20% difference in square footage.

After the Challenging, now the Difficult:

  • Have a reliable formula for adjustments:  know the value of a full bath vs. half, full basement vs. partial basement vs. no basement, bedrooms, one-car garage vs. two, frame construction vs. brick, overall condition including remodelling.
  • Have a formula for market appreciation or depreciation – especially for comps outside the preferred six-month window.
  • Adjust as needed for terms of sale (cash vs. new loan), type of Seller (individual, bank, estate, etc.)

 

 

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Best Time to Buy a House

Best Time to Buy a House

This topic gets worked over periodically, and today I heard Mark Di Vincenzo on NPR talking about his new book, Buy Shoes on Wednesday and Tweet at 4:00 – all about the best times to do various things throughout the year. Sounds like a good read. He offers “some timing tips from real estate agents” so let’s see if we agree.

Best Time to Buy.

Mark says January due to cold weather, less competition, fewer bidding wars, and “more motivated” Sellers. He opines that Sellers may be insecure after Christmas spending, and their timing indicates they’re more “willing to risk.” (see also TIME, Real Estate Markets, Oct 10, 2012)

I mostly agree – but some things are different in Denver right now:  there’s plenty of competition for good listings, and more than a few bidding wars regardless of the temperature  (one of our neighbors just got five offers (!) after making a price reduction and it’s 10 degrees outside).  As for “motivation”, it works both ways:  if a Seller has the luxury of waiting until spring to sell, how motivated can they be?  If you’re taking a job transfer, or getting a divorce, or settling an estate, there’s no waiting for spring.  If you’re an investor who did a ‘fix-and-flip’, you’ve still got a mortgage and construction costs to pay back.  So buyers who wait until spring may have more selection, but not necessarily better.

Still, Mr. Di Vincenzo is right about most things:  interest rates are great right now, there’s less competition from other buyers, and nationally inventory is pretty abundant (not so much in Denver, tho).  In Denver, the real paradox is that January is a good time to be a buyer – but not such a bad time to be a seller, either!

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