On Monday, the National Association of Realtors’ daily news alert carried the headline, “Housing Shortage Will Dampen Spring Market.” However, I think the NAR analysts are coming to a faulty conclusion — at least as it relates to the Denver market.
Yes, the number of homes listed as “active” on Metrolist at the end of March was down 35.3% from March last year, but the number of homes entered on Metrolist from January through March 2013 was down only 5.2% from the number listed in the same period last year. And the number of homes sold this March was up 16% over last year. That’s the #1 reason for the reduced number of active listings.
What the NAR analysts are saying, in effect, is that because new listings are selling so quickly, resulting in fewer available homes, we’re going to have a slow spring.
Nothing could be further from the truth. Homeowners, realizing this is a seller’s market, will continue to put homes on the market as quickly as practical, and those homes will continue to sell quickly, often with multiple offers. The spring real estate market will be on fire, not “dampened,” by the shortage of active listings.
The market is so hot that, in two instances last month, I recommended to my sellers that they accept offers that were contingent on their buyer’s home being sold — and the buyers’ homes were not even listed yet. I analyzed the market in the two neighborhoods where the buyers’ homes were located (Sloan’s Lake for one and Trailmark for the other) and even visited the Sloan’s Lake home to see its condition and updates. Based on the proposed listing prices, I could see that each home would sell within a week, and both homes did sell within a week. As a result, my sellers are happily moving toward closing on their homes.
In a “normal” market, no agent in his or her right mind would recommend taking an offer that was contingent on the sale of a house that wasn’t already under contract, much less not even listed. But this is not a “normal” market.
In another instance, I had a listing in Golden that didn’t sell last year or the year before, but I knew the owners still wanted to sell. Because of how the market had turned, I urged them to put their home on the market one more time. They were burned out from the process and said, “No.” At that point I said, “Sign a two-week listing agreement. If it doesn’t sell in two weeks, it’s off the market.” They were leaving on a 2-week vacation anyway, so they agreed. That house, which didn’t sell last fall for $550,000, was under contract for $570,000 in 12 days.