Five Essential Things You Need to Know About the 2016 Summer Home Buying Market
The months of April, May and June usually account for about 40% of the homes sold throughout the year. Currently, the Denver housing market has some challenges. Inventory is at record lows, home prices are rising, and foreclosure activity in the lowest it’s been in a decade. Here are the five essential things you need to know about the 2016 summer home buying market:
1. Inventory is low. The number of homes for sale is at a record low; due to the lack of existing homes for sale and new construction not keeping up with demand. To give you an idea of how low the inventory is, consider these numbers; currently there are about 5,000 homes on the market, before the downturn there were 30,000. The tight home market makes it a great time to sell and a challenging time to be a buyer.
2. Increased Competition. The number of people looking to buy a home currently out numbers the homes for sale, partially because real estate investors make a sizeable chunk of the people looking. It’s not uncommon for a home to have multiple showings the day it hits the market. As a buyer, you need to be prepared to move quickly if you find a property you like. You also need to be patient as you may be outbid and have to bid on multiple homes.
3. Cash is Still King. An all cash buyer who can close quickly offers a great incentive to buyers who have received multiple bids. Cash buys only account for about 30% of home sales so while cash may be king it’s still very important to have a strong lender letter to show sellers you are a good contender.
4. New Home Lending Standards. The newly unveiled home loan standards have lenders making it easier to be approved. Take the time to find a great lender; it’ll make a big difference in your ability to purchase a home.
5. Appraisals. In the past several years, appraisers have been conservative and under-valuing properties, mostly as a reaction to ultraconservative loan underwriters. However, we are starting to see this correcting itself and appraisals coming in at value. This makes it far less likely for the house you’d like to buy appraise for less than what the bank will lend you for it, killing the deal.
Overall, there are pros and cons to buying a home right now, but that it true of any market. An experienced agent can help you navigate the ups and downs of buying or selling your home. If you’d like more information or have any questions, we’re always here to help.