One Realtor’s theory of how a football team created an extreme sellers’ market.
In the world of real estate, this year kicked off with one crazy first quarter. As I’m anxiously waiting for the closing data to be tallied, I’m pondering what is happening to Denver’s real estate market and how we got here. While the past few years have seen steady growth, the first quarter of 2015 was completely out of control. And yes, I think the Broncos are to blame.
Why would such a beloved team make the lives of buyers, (some) sellers and Realtors so difficult? Well, I doubt the Broncos intended to wreak havoc, but I think the cause and effect is pretty clear.
It all started in September. The Broncos were predicted to make it to the Super Bowl and after last year’s heartbreak, anything less would be a letdown. Weekend after weekend, fans sat glued to their televisions in anticipation of the ultimate victory—and, as a result, the fall real estate market was slow. But on January 11th, when the Broncos faced off with the Colts, everything changed. Unlike the season’s previous match-up, this one ended in a loss. The result? Crushing disappointment. Ripples of anger. And above all, free time.
It seems that within hours of the loss, the majority of Denver residents whispered five simple, but devastating words: “Let’s go buy a house.”
Normally January is my preparation month for the rest of the year, but I experienced a wave of clients eager to pre-qualify, ask questions and search for that right home. I dropped my projects and jumped into the melee with them. Most, if not all, of these clients were buyers. Sellers were talking about selling…maybe when the snow melted…maybe in March…
As a tsunami of buyers grabbed anything that could be purchased, other buyers lost the bidding wars. They would try again the following weekend only to fail again.
As January, February and even March progressed, potential sellers observed how fast homes were moving and became excited about the possible profits. However, they also realized that selling their home would mean moving into an apartment while trying to find a home that might not exist. The idea of moving twice didn’t make sense, so they decided to wait.
And here is where #22 comes into the game. (Not a player, but the dreaded catch-22.) Sellers waited for more homes to become available. But homes weren’t available since sellers were waiting. From what I saw, most sellers fell into these two categories: 1) Sellers who could afford to buy first and sell second. 2) Sellers leaving Denver who knew they could buy in a different (sane) market.
As I write this, I’m not sure what it will take to tackle the catch-22 and open the game up again. But at least we have a good five months until the NFL pre-season, so there is hope.
For someone who loves to dig into the data, I can’t prove any of this. It’s nearly impossible to track unsuccessful offers, which would provide an essential data point. So call me a conspiracy theorist or just someone who needs a scapegoat, but something caused these extreme conditions. And maybe, just maybe, it was an unsuspecting football team.
Outsource Your Nerd
The Denver Expert
Broker/Owner of Denver Realty Experts LLC