Why Is Our Current Market Crazy?
We’re currently seeing record prices, multiple-offer situations, and homes selling in days. In fact, we might be living through the best time ever to sell a house. Why is that? Today I want to run through three factors affecting our crazy market:
1. Cash is everywhere. There are probably more cash buyers in this market than we’ve ever seen. Where did all this cash come from? Most of it belongs to buyers from more expensive states, like California and New York. These buyers sell their pricier properties in their home states, then use the funds to make an all-cash offer here. Denver is a big destination for people working remotely, and folks from all over the country are bringing their cash to our area.
Another big influx of cash is coming from institutional investors. Large hedge funds are looking at residential real estate as a great long-term investment. Between out-of-state buyers and institutional investors, our market is becoming flooded with cash.
Denver is a big destination for people working remotely.
2. Pent-up demand from the pandemic. Tons of buyers have been looking for homes since the pandemic began, but there still isn’t enough inventory to meet demand. This has been an ongoing issue since March 2020.
3. Interest rates remain low. Yes, interest rates have increased recently, but they are still historically low. Buyers have been flooding the market trying to take advantage of our great rates while they can. For reference, rates were around 14% in the 1980s. Even if they go up past 5%, they’ll still be lower than your parents’ rates.
If you are looking to sell or have any questions, please reach out to me via phone or email. I’d love to hear from you!