Greetings friends! Let's start this update with a question, and I honestly hope to get your response: What have you heard about the market?
In the last two weeks we've seen a return to what might be considered normal seasonality, indicated by a lull in activity due to the start of school. You may also remember almost two years ago when I wrote about October 18th being the best day to CLOSE on a house, meaning the best time to put one under contract is 30-45 days prior to that. That means, yes, if you're looking for a house there is hope in the very near future. But of course I'll need to disclose the fine print.
Spring and summer of any year is associated with buyers climbing over each other to get into houses, which means rapid price increases month over month from March - July. This year was one of our lowest in terms of inventory so NoCo, particularly Fort Collins, felt the pinch in ways we've never seen before. Offers 10-15% over the asking price were common and buyers and agents struggled with the new normal of appraisal gap coverage or outright waivers, and making financed offers 'the same as cash'. As-is contracts were also common, a practice that some believe isn't necessarily good for buyers or sellers. Yes, sellers too.
So we had a white-hot summer, right? This brings me back to my opening question. Do you think the market is still white hot? The big picture says not so much. In fact, this article, released two days ago, says July was the least competitive of the year: https://www.scotsmanguide.com/browse/content/bidding-wars-drop-to-lowest-level-since-beginning-of-year
Good news right? Well, if you get near the bottom it of course says there are exceptions. Spoiler: Fort Collins was the most competitive US market in July, according to Redfin. Now, I don't know how they 'analyzed' the market data but one would imagine they measured it by the % over the asking price per sale. I'm not going to argue with it, even though it's Redfin. Ask anyone working with buyers in July - it was nigh impossible to get into a house without a pile of cash and a willingness to set a record for the neighborhood in which you are buying.
So back to the best time to close on a house, and why there is hope for buyers. We're coming off the hottest summer (in multiple ways) Fort Collins and NoCo has seen, so many sellers and their agents go with the misguided wisdom that selling a house is easy and a high price tag will yield nothing but positive results. They are wrong. Just today I sent out several groups of listings to new buyers, and most of the inventory has been on the market for over a week. To put that into perspective, the average days to offer in June was roughly four.
Also, there are always sellers hoping to cash in this time of year that haven't really done anything to their houses in the way of maintenance or prep, and they price them as if they were in excellent condition. Many of my active buyers know exactly what I'm talking about, unfortunately.
So there are more places sitting on the market at inflated prices and in perhaps less than ideal condition. This means folks will pick them up in the next few weeks, and they will likely get them under the asking price. Guess where that puts a typical close date? Mid-October, like October 18th.
Of course, stuff in desirable areas that is priced well and in good condition will go quickly and over the asking price. They always have. But I don't think you'll see 15% over the asking price until next spring, and we'd all like to hope that doesn't happen. Unless of course you're selling your place and don't plan on buying anything in the area...
Look forward to hearing everyone's thoughts. Have a great day! Crip