As Denver real estate continues to hum along, changes in the market are becoming more obvious. After several years of a red hot seller’s market, the climate has shifted towards a more stabilized, buyer friendly playing field. This isn’t to say buyers are firmly in the driver seat, they at least have more choices and a little more leverage.
The great housing bubble and predicted burst never came to fruition. And rightly so. The elements were never fully there to bring the housing market to its knees. Multiple years of low inventory and high demand kept prices up and sellers in control. Yet there’s a new rumor being bantered around; one of a looming recession.
Time for a Break?
The national economy is booming with record low unemployment and rising stock prices. Locally the news is equally as good. Wages are up, interest rates are down and housing prices continue to rise, albeit at a slower pace. With all of the good news, it’s difficult to imagine a recession. However, it is a cyclical event, just like the transition from a seller’s market to a buyer’s market. The shift is inevitable.
We can see this in the Fed’s management of interest rates. They are paying close attention to inflation and keeping their foot off the gas. In fact, the expectation is to see rates cut again in July.
A New Concern: iBuyers
Although sellers may lose some traction and control in the shifting market, a new concern for some will be the introduction of iBuyers. Zillow, Open Door and Offer Pad, known as “iBuyers” are the highly funded, big players in this new online real estate platform. The marketing message promotes cost savings through the convenience of going online to sell your home. But the reality in some cases is proving to be far different than the hype.
Meet the New Investor
The iBuyers are typically investors working for a profit, not fiduciaries working for the homeowner. While a Colorado real estate agent has a fiduciary duty to their client, the obligation of the iBuyer to the client is perhaps fuzzy at best. Examples of the misdeeds by iBuyers are surfacing at a faster pace, making sellers more attuned to the real cost of online sales.
The Real Deal with Sellers
The market has shifted and continues to do so, taking some of the long held control from the seller. Homes may sit on the market longer in 2019, but we remain in a seller’s market. In the right price range and location, homes continue to sell quickly. Sellers should be cognizant of a potential recession, but not panic. Homes still sell in a recessionary period. The bigger concern for some sellers is to be financially exploited through the new iBuyer platform. Although the percentage of homes sold through iBuyers is low today, the movement is gaining momentum.
As we slowly return to some sense of normalcy after the economic shutdown, the Denver real estate market continues to scream along. Through the height of the pandemic, home sales slowed but never stopped. As soon as the Stay-At-Home order was lifted, Denver real estate sales took off for a wild ride.