According to a recent report from the real estate data company Zillow, Denver is one of the toughest housing markets for first-time home buyers in 2017. There’s a high level of demand for housing in the area, but limited inventory. This force home buyers to compete fiercely for desirable properties.
Advice for First-Time Home Buyers in Denver
But despite the competitive nature of the Denver real estate market, there are certain steps first-time buyers can take to improve their chances for success. We’ve covered three of the most important steps below.
1. Research the housing market before entering it.
What’s the median home price in the part of Denver where you want to buy a house? What is the average of recent sales prices in the area? If you can’t answer these basic questions, you have some housing homework to do.
Sure, a real estate agent can answer some of these questions for you. But if you want to succeed as a first-time home buyer in Denver, you’ll need a basic understanding of current market conditions in 2017. This will help you move quickly when the right house comes along.
Market awareness will also enable you to create a smart offer based on current conditions. In a fast-moving real estate market like Denver, a strong first offer can make the difference between acceptance or rejection.
Fortunately, this kind of information is easy to find. You can find recent sales prices in your desired neighborhoods by using a website like Realtor.com or Zillow. Additionally, a simple Google search will yield all kinds of insight into the Denver housing market.
Here are some real estate market highlights, as of Spring 2017:
- According to the Denver Metro Association of Realtors, the average price for homes sold in the metro area rose to $439,161 in April 2017. That was a 3.41% increase from the previous month, and a gain of 10.53% compared to April of last year.
- Home-price growth is expected to slow over the coming months. In May 2017, the research team at Zillow predicted that the median house value in Denver would rise by 3.3% over the next 12 months (which is an average level of appreciation).
- Housing inventory is tight in Denver. The number of homes listed for sale fell to its lowest level in decades earlier this year, though it has come up a bit since then. As a result, first-time home buyers in Denver should be prepared for stiff competition.
2. Get pre-approved for a home loan.
Most first-time buyers in Denver use mortgage loans to help finance the purchase of their homes. If you fall into this group, it would be wise to get pre-approved for a mortgage loan — before entering the housing market.
Pre-approval is always a good idea. But it’s especially important in an active real estate market like Denver, where sellers are likely to receive multiple offers from buyers. Sellers have come to expect pre-approval letters from home buyers who are making an offer.
Pre-approval also gives you a sense of where your price range is, and what kinds of homes you can realistically afford.
3. Be prepared to compromise.
Real estate transactions usually involve some form of compromise. The Denver real estate market currently favors sellers over buyers, due to limited inventory and high demand. So, as a first-time home buyer in Denver, you’ll likely have to compromise on one or more factors relating to the house you want to buy.
- You might have to compromise on the location. Maybe you have to drive a little farther for your daily commute. Maybe you have to go with your second-choice neighborhood instead of your first. These are common compromises for first-time buyers in Denver. Be open-minded and flexible regarding the location of your home.
- You might have to compromise on price. First-time home buyers in Denver often have to make follow-up offers to negotiate the price. If the seller’s asking price is reasonable based on current market conditions, you probably shouldn’t quibble over “nickels and dimes.” Find common ground with the seller so the deal can move forward.
Flexibility, compromise and open-mindedness are welcome attributes during a real estate transaction. But there especially helpful for those who are buying a first home in Denver in 2017.