Want to know what's really happening? Well, step right up. You've come to the right place.
The chart above shows single family house sales in Boulder and Denver Counties, inclusive of all cities and unincorporated areas, from April 1st through April 19th. It's not perfectly accurate because Realtors are slow to input data, but it's a large enough sample to give you a good baseline for market activity during the first half of April.
This chart should look familiar. It's similar to the one I published last week, except instead of talking about the past quarter and looking at it year over year, we're only focused on the most recent data. The yellow dots represent Denver. Blue circles are Boulder.
Some observations that should jump out at you:
1. Many sales continued to happen at the asking price, or even at a discount. It's not an insignificant number. We'll discuss that further using the table below.
2. Distribution of premiums paid was similar up to about 10%. At that point, outliers begin to take over.
When making an offer, you might want to ask yourself whether you're looking at house that is worthy of exceeding this threshold. In my opinion, few homes make the cut. You can check out our favorites every week in our newsletter. Even in this select sample of new listings, few are worth more than 10% over asking.
3. Boulder County has a much wider distribution of higher-end homes, a fact that shouldn't really surprise you. If you're shopping at the upper end of the market, and are worried about capital preservation during a potential downturn, you may want to focus on locations where there is much greater depth of market.
Now let's look at the same data a little differently.
The table above breaks out sales volume into tranches, by premium or discount paid relative to the list price. In Denver, 15% of listings actually sold for a discount. 17% sold for the asking price. Similar groupings exist from 0% to 10%, about half the market. Only about a quarter of listings sold for more than 10% above the list price.
In Boulder, the numbers look similar. 21% of sales occurred for less than the list price. 16% were sold at asking. 21% sold at a premium of 5% or less. 19% of houses sold for 5% to 10% over asking. 14% sold for 10% to 15% over asking. 7% of homes hit the 15% to 20% premium tranche. And only 2% exceeded 20% above the list price.
If you're a betting sort of person, this table could also be interpreted as rough odds for your offer. Just keep in mind that it's not just about the price. The structure and contingencies contained in your offer are critical aspects to its competitiveness, and arguably more important than whether you have cash or are using a mortgage. We've won plenty of bidding wars for buyers who utilized a mortgage and yes, we beat out cash offers.
Finally, please don't forget that the market varies by price range, location (down to the street level), and property type. The table and chart above are interesting, but not nearly as granular as we regularly go with our clients before making a recommendation on offer (or pricing) strategy. How many offers were received and how far above asking are critical questions for that most recently went under contract. For that, your Realtor needs to pick up the phone and talk to their colleagues. Not all are willing to make the effort.
Our advice? Choose an agent that maintains great relationships with their colleagues and is willing to do the extra work to obtain actionable intelligence on relevant pending sales. Then go house shopping. Just don't forget one thing: there's always another house.
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.
