Although Denver continues to have some of the worst home affordability in the country, recent reports suggest that the local real estate scene is transitioning into a buyer's market. But a local real estate pro who's also an active house flipper doesn't think house hunters need to hit the streets immediately.
Fresco Real Estate's Veronica Collin has four key words of advice: Wait until next year.
Collin, who specializes in properties on metro Denver's west side, from Thornton to Littleton, spoke to us back in July for our post "How House Flipping in Denver Is Changing in 2018." She recently reached out to her clients with real-estate recommendations for the coming year — and from what she's seen, a market shift has been slowly taking place since mid-2017.
"I think it was late summer or early fall of last year that the market peaked," Collin says — and this belief was borne out by what's happened in 2018 to date.
"Real estate agents in Denver have noticed this past year that things were different than they've been the past four or five years," she maintains. "We've been in a strong seller's market. It's been crazy in the spring, when most buyers come out, and somewhat quiet in the summer — but then it's picked up again in the fall."
During the second quarter of 2018, however, "we started to see price reductions that we haven't been seeing until August," she goes on. "Instead of multiple offers on every property, we started to see the kinds of price reductions that we usually don't see until August. And even though we always have a summer slowdown, things usually pick up in September, October and November. But now we're seeing houses sitting on the market even with price reductions."
This situation wasn't universal. According to Collin, "houses with a lot of charm and style still went under contract the first weekend they were listed. But that wasn't the case with anything on a busy street or located a little farther out, or houses that were just overpriced."
If buyers rush out now, they'll find plenty of properties like the latter, and not nearly as many real gems. But in the next few months, Collin predicts that the pickings will be better, in part because of varying views about the repercussions of this week's election.
Reactions will differ "when people aren't getting the prices they were on houses and see the values coming down," she contends. "If half the people think, 'Oh, my gosh, things are just going to hell,' it could contribute to them thinking, 'I'm going to cash out now and maybe find a more affordable house further out.'"
Collin doesn't endorse this approach: "I think it's a bad idea, just like it's a bad idea when people decide to sell in a recession. They see they're losing money, so they sell at the worst time instead of waiting for things to come back, which they always do. But people who bought a house three years ago and saw it appreciate by $100,000 and then see the numbers coming down on Zillow may panic and decide to cash out even though they have lots of other options."
If that happens, Denver will see loads of plum properties suddenly becoming available at more reasonable prices. And the less ideal places will present house flippers with opportunities, too.
"There will be more choices," Collin says. "As a flipper, you'll have the option to get something at a better price than in the past. So I think the climate for flipping will improve as the inventory increases."
In Collin's opinion, a "flood of homes will come on the market mid-to-late summer of 2019," finally giving buyers the opportunity to "ask for improvements on inspection and not to have to pay above appraisal," among other things. As such, she suggests that people who are considering relocating to another home or neighborhood list their abode in the spring to maximize its value. And people who are in their homes for the long haul — ten years or more — should chill rather than freaking out in a way that will almost certainly cost them money.
Bottom line: If you don't have to buy or sell right now, sit tight. Your bank account will be glad you did.