Foothills housing market popping, real estate agents say
Homes under $500,000 in high demand
By Deb Hurley Brobst
Tuesday, June 16, 2015 at 1:22 pm (Updated: June 16, 2:21 pm)
Real estate agents are using several adjectives to describe the foothills housing market, especially for homes priced below $500,000: hot, a frenzy, popping.
“It’s the most active market I’ve seen in my 30 years in so far as multiple offers and prices being bid up over ask,” said real estate agent Wayne Shephard of Shephard Realty. “Homes priced correctly are being sold almost immediately.”
According to several area agents, while the market of homes under $500,000 is busy, the market for homes between $500,000 and $1.2 million is more balanced, with homes taking four to six months to sell, and the luxury homes over $1.2 million are selling extremely slowly.
Homes in Pine and Bailey — which once were considered more secluded and less expensive — are selling more quickly also. In addition, more vacant land is available along the U.S. 285 Corridor, so some are choosing to build because it’s too difficult to find existing homes to buy.
The average price of a home under $500,000 is $180 per square foot in Evergreen and $171 per square foot in Conifer, according to Realtor Jeff Girod, owner of Keller-Williams Foothills Realty.
In the $500,000-and-under price range, it’s definitely a seller’s market.
Agent Mary Hager with Re/Max in Conifer said she’s seen as many as 10 offers for a single home.
Overall, days on the market in the below-$500,000 category have dropped to virtually zero, Girod added.
In the first quarter of 2015, 84 percent of homes sold in the foothills were in the under-$600,000 price range, according to agent Tupper Briggs with Re/Max Evergreen. As of May 31, 462 homes had sold this year to date, versus 448 in the same period in 2014.
“Now there are fewer homes for (buyers) to look at, and that’s what’s driving prices up,” Briggs added. “The inventory spigot is choked up.”
Agents have a range of reasons why lower-priced homes are selling so briskly right now.
Following Denver’s lead
It begins with the Denver housing market being so busy; realtor.com rates Denver as the busiest housing market in the country. The foothills tend to lag a bit behind the Denver market, so the area is now catching up, Girod said.
“People (in Denver were) looking at homes down there for a while and not finding anything,” Girod said. “Now they are looking up here.”
Shephard added: “Denver was highly active a year ago. We just became super active this year. We always follow the Denver trend.”
A ‘sellers’ spiral’
Some homeowners want to sell their homes but are holding off because they’re afraid they won’t find another home, said Girod, who calls this a sellers’ spiral.
“Either (sellers) don’t want to move or don’t need to move or they can’t find another house to buy,” Girod said. “If they can’t find a house to buy, then don’t want to put their house on the market. You go into this spiral because fewer people are listing because they can’t find a house to buy.”
Chris Vinci, owner of da Vinci Realty in Evergreen, said one seller ended up renting a place in Denver because he sold a home in one day and couldn’t find another one to buy.
Out of the recession
Several mentioned how people who lost their homes to foreclosure during the recession between 2008 and 2011 now are eligible for home loans, so they’re house hunting.
“That’s a big pool of buyers who are now eligible to purchase,” Vinci said. “I’m sure there are a boatload of those folks coming in and driving sales.”
Briggs called them “boomerang buyers” in that they have circled back into the home-buying market.
The recession also kept first-time buyers out of the market because it was too difficult to get a loan, the agents said.
“I’ve got a bunch of first-time homebuyers because money is cheap,” Vinci said. “They are finding it a lot easier to borrow money.”
Some of the first-time buyers lived with their parents during the recession because they couldn’t afford homes, Briggs said. Now they are looking for homes to buy.
“Right now, anything under $500,000 is still in a price range that people are comfortable with house payments,” Hager said. “People want to be able to make a move and afford the (house) payment.”
Getting bids accepted
The agents said it’s important to counsel buyers on how difficult it can be to find a home priced under $500,000.
“We let them know what kind of market they’re walking into,” Briggs said. “If they look at a house and want to think about it for a day before submitting an offer, they won’t get the home. They have to be ready to act immediately.”
The agents suggest bidding $5,000 or $10,000 over the asking price to entice a homeowner to choose the offer and to be pre-approved for a loan before making an offer. Others suggest that buyers who can pay cash have an advantage.
They have also suggested that buyers write letters to the sellers about the home.
“Buyers are becoming frustrated by the competition,” Shephard added. “It’s a tough time for buyers.”
Rental market following real estate market
They agree that for homebuyers in the under-$500,000 category, both patience and creativity are virtues.
As the real estate market goes, so goes the rental market.
Property management companies in the foothills say rental properties are hard to come by, and when they are available, they’re snapped up quickly.
“This time of year, I would advertise upward of 10 properties for rent,” said Wayne Shephard of Shephard Realty. “Today I’m advertising one.”
“It’s horrible for tenants,” said Bill Schenk with Bear Paw Stanbro in Evergreen. “This is the worst summer I’ve seen in the last three summers.”
Usually, in the first week of June, the property management company would have 14 to 18 homes available; this year it has three. Bear Paw manages 300 properties, and 297 are taken.
Schenk said Bear Paw is seeing four to six possible tenants for each rental. One gets the home, and the others are unhappy because they must keep looking.
People are desperate to find house rentals, and it means homeowners can raise rents, he said.
They attribute the shortage to homeowners deciding to sell their homes rather than keeping them as rentals. Some, they said, wanted to sell during the recession but couldn’t. Now, with the home sales market so busy, it’s easier to sell.