The Denver real estate market is never static. We have already seen that to be true with the market starting to shift again, just six weeks into the new year. Given that the market is ever-changing, what strategies should sellers use to be successful in this market? The answer points to patience, preparation, and pricing.
When interest rates rose in Q3 and Q4 2022 and buyers put the brakes on their home searches, sellers felt the effects as they watched their properties sell for less than they expected – often with buyer concessions – and take longer than anticipated to do so. This trend has continued, especially with homes that have been on the market awhile. Buyers saw homes sit on the market longer than just a few days and realized they had time to think before they wrote offers. Sellers had to learn then – and they still need to know now – they may not immediately receive an offer (and yes, sometimes it may be only one offer that comes). There continue to be homes that sell immediately (more on that below) but many are taking longer to generate an offer; having patience while waiting for an offer is a necessary strategy in this market.
In the past few years when the market was so tight, sellers did not have to do much in terms of preparation order to get their homes sold quickly and for more than asking. Again, when the market shifted last Fall, buyers were no longer willing to pay anything just to get any property, and they began to expect the homes they bought would be in excellent condition. Therefore, preparation became – and continues to be – crucial to a seller’s success. Sellers now need to stage their homes prior to listing in order to showcase them in the best possible light and make repairs in advance to anything they know to be deficient; doing so will net more on their asking prices because buyers see the value in homes that are in good condition and show well.
Lastly, pricing is key. As the market shifts again, there seems to be a dichotomy in the inventory; there are properties languishing on the market where buyers have more leverage to offer less with more favorable buyer terms, and there are newly listed homes buyers compete fiercely for by offering over-asking with non-refundable earnest money and waiving as many contingencies as possible to win. The difference between these two groups directly relates to pricing. When homes are priced well – especially those new to the market – buyers see the value in the price they have to pay and they write strong offers quickly. When homes are priced even slightly higher, buyers will wait to see how they perform in the initial days on the market and whether or not a price reduction will take effect. Pricing is sensitively nuanced and often means the difference between selling quickly for a strong price or reverting to patience while waiting for an offer to come in.
The 2023 market is shaping up to be competitive, yet again. Currently, we have two distinct inventory groups at play, and there is a fine line between those two groups. In order to be successful in the market this year, sellers must have patience, prepare their properties, and price them competitively from the very beginning.