So far, 2015 has been a pretty crazy year in Denver real estate. The very high levels of demand and low levels of supply have triggered bidding wars and missed opportunities—which have led to more frustration and regret than I’ve seen since becoming a realtor in 2003. The frustration comes from losing a bidding war and not being able to find a good home. And the regret comes from waiting too long to purchase and seeing prices rise above affordable levels.
This week I want to translate these feelings into numbers by comparing the detached, single-family home prices of 4th Quarter 2014 to prices in 2nd Quarter 2015.
In the chart below, you can see the percentage of appreciation during this six-month period. Five of the city’s most sought-after areas showed appreciation ranging from 25-29%. For Central Denver the overall average was 10.8%. Keep in mind, these very high numbers are for only six months. Historically, Denver averages about 6% appreciation—but for an entire year. Clearly, this has been frustrating for anyone trying to afford one of these quickly appreciating homes.
And then there is the cost of waiting. Let’s say Bonnie Brae/Belcaro is your ideal neighborhood, but you waited six months to purchase. During that time period, the cost of waiting would have been more than $1,300 per day. Across all neighborhoods, the average cost per day of waiting was about $241. So, a mere six-month delay in buying cost the average buyer over $7,000 per month, or $43,000 total. Unfortunately, it cost them a fair amount of regret too.
Okay, enough hindsight…what’s the takeaway? Not to give up, certainly. All signs point to continued growth, so I don’t recommend sitting on the sidelines and getting priced out of the market. Finding your next home may take a little more effort now, but as you can see it’s worth it. And remember, we’ll be with you every step of the way.
Outsource Your Nerd
The Denver Expert
Broker/Owner of Denver Realty Experts LLC