A Fever Pitch!
In a recent Seth Godin blog post he wrote “The only thing worse than losing an auction by a few dollars is winning one by a lot. All of this makes sense until it doesn’t. The “market” is very smart about any given moment in time, but not always particularly smart about the future.”
I think this quote rings true for our local real estate market (and many others around the country). The average buyer makes a number of unsuccessful offers and learns from each one what it takes to win in this market. It hurts to be close and it urges them to do a bit more next time. A more aggressive price, a waived inspection, increased earnest money, non-refundable earnest money, as-is… That’s what it takes in many instances right now. In that way, the market is smart right now. Buyers are learning and adapting. But is this sustainable? No. Are those values locked in? No. The stakes of the market have risen and a lot of buyers have gone all in.
April was a huge month for real estate in Boulder County! The statistic that I think most characterized the month was that 21% of all sales closed for 15% or more than the list price and15 sales went for more than 30% over the list price! 76% of the 426 sales sold for above list price. Needless to say, it’s very competitive and frustrating for buyers right now. See the slideshow for more detailed statistics.
All of this is set in environment where interest rates have increased by almost 2% over the last six months and the stock market has fallen by double digits year-to-date. So far, buyers who are in the process, seem to be committed to buying a home, even as their monthly mortgage obligation is rising significantly.
