Word on the street is that EVERY listing is getting a bidding war and homes are just flying off the market! Surely, you've heard?
Well, not exactly. A small portion of listings are attracting multiple offers and seeing prices far exceed the list price. In Boulder, for example, there have been over 300 sales since the beginning of the year. 33% sold for more than asking, 16% sold for the asking price, and 51% actually sold for a discount. That's right. The majority of listings sold for a discount. These are the facts. [data updated 3/13/21]
That's not to say that it's not a hot market. It's the most intense I've seen in 16 years as a Realtor. The most attractive homes in the best locations are indeed seeing intense buyer interest, driven by extremely low inventory, low borrowing costs, and an economy that by all accounts, appears to be on the mend. We recently participated in a bidding war for a listing that drew nearly 20 offers. Just keep in mind that not all listings are seeing that sort of activity.
So far this year, when a home sold for more than asking, the median premium paid was 5.7%. When it sold for a discount, the median concession was 3.7%. Keep in mind that some of the most active listings, those for which we have direct knowledge because we represented buyers or sellers, have yet to close. In the particularly heated deals, we've seen the final price exceed 10% over list, to the tune of hundreds of thousands over asking.
Our Advice
What should you do? Be extremely selective when deciding to offer more than asking and carefully weigh the risks involved with waiving contingencies. Not all properties are worth a bidding war. Get the facts and don't rely on anecdotes from your Realtor, especially if they don't have the facts. Intelligent decisions are based on deep market knowledge, not wishful thinking.
Don't forget that there are trillions of dollars of helicopter money about to hit the economy. Things are about to get very interesting.
And while you're pondering which listings you should pursue and how to navigate this intense market, don't forget to choose your real estate adviser carefully. Whether you're buying or selling, this is the first thing you should be considering. There are risks and rewards on the listing side, too.
Fresh Listings, Get 'Em Hot
In this week's Fresh Listings newsletter, I'll discuss several recent sales that drew multiple offers. These deals have closed, which means I can now share the full story of how it went down, including why our clients decided to pass. I'll also share a listing that closed in the same block as the recent CU Party-Riots, just days after the chaos. There's an impact to living close to students, both in terms of market dynamics and the living experience.
Sign up HERE.
Osman Parvez is the Founder and Employing Broker of House Einstein. Originally from the Finger Lakes region of New York, he lives in Boulder with his wife and their Labrador Retriever. He has been a Realtor since 2005.Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. For more information, click HERE.
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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. House Einstein strongly recommends conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.
