Last week, we shared eight tips to help first-time home buyers deal with real estate bidding wars in Denver — and they'll need them. A new survey by a local expert reveals that the overwhelming majority of more than 100 homes sold in the metro area on one recent day went for above list price — and often for a lot above it.
In one extreme case, a home put on the market at just over $400,000 closed at more than $500,000.
Jim Smith of Golden Real Estate is a former journalist, and he brings his investigative chops to regular columns on the local housing scene. For his April 22 edition, he decided to get a sense of how competitive the pursuit of a new home has gotten.
"We’ve all heard some crazy examples of bidding wars in which homes have sold for way over their listing prices," he notes, "so I took a snapshot of just one day’s closings, limited to a fifteen-mile radius of downtown Denver. That takes in an area from Broomfield to Highlands Ranch and from Golden to Aurora. It does not include Boulder."
Smith randomly chose Friday, April 16, and limited his search to homes, condos and townhouses on the Denver-area multiple-listing service, or MLS, for at least one day but no more than six days before going under contract. "Those are the homes with bidding wars," he points out. He divided the properties into two categories — those that sold for up to $500,000, and the ones that went for over that amount.
The data Smith collected is mind-boggling.
On April 16, 48 homes closed with sales prices of up to $500,000. Of that batch, the median home — a tri-level in Aurora — was listed at $420,000 but sold for $440,000, or 4.7 percent over its asking price. But that was modest in comparison with another Aurora house, which was sold in a single day for 25.8 percent above list.
Of the 48 homes that closed for less than $500,000, only three went for the list price, and two sold for less. The other 43 brought in more money than the sellers initially requested.
The situation was similar for the homes that sold for more than $500,000. According to Smith, 68 closed on April 16, including the median home, a 1950s-era ranch in Denver's north Hilltop neighborhood that was listed at $600,000 and was snapped up one day later for $650,000, a bump of 8.3 percent.
"The highest overbid in this group," says Smith, "was 18.8 percent for a two-story home in Westminster listed for $425,000 that sold in five days for $505,000" — an $80,000 bonanza for the seller.
The overwhelming majority of the 68 homes that closed for more than $500,000 on April 16 exceeded the asking price. Only five sold for list, and four dipped beneath it, leaving 59 that required buyers to dig deeper to win the day.
In his analysis of the luxury market, Smith broadened his lens, looking at 68 closings for more than $1 million between April 1 and April 16. Over that span, the median price was 4.3 percent over list — but a 1954 bungalow in Denver left those digits in the dust. The joint was listed for $965,000 and sold for $1,205,000, or 24.9 percent above list.
Concludes Smith: "These statistics reflect the bidding wars that were taking place during late March. It's probably more intense now."
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