Sell Your Home For More Before Foreclosures Surge Higher?

The foreclosure eviction moratorium was extended another month last week to the end of July. Here are some facts about the number of loans in forbearance—

• According to the Mortgage Bankers Association, the number of borrowers in forbearance is down to 2 million, down about 60% from a year ago.
• 24% of all borrowers that have exited forbearance had continued to make their payments in forbearance.
• According to CoreLogic, only about 2.5% of mortgage borrowers have negative equity as of March.
• According to Black Knight, only 4% of mortgage borrowers have < 10% equity in their homes.

The media hype, is just that, Hype! Doom and gloom sells papers, but the reality is that most homeowners who are in forbearance have plenty of equity to sell and walk away with money in their pockets.

• The incredible rise in home values the last 5 years has created massive amounts of wealth and home equity that homeowners will do everything they can to protect.
• Think about it, for the last 8 years of Bidding Wars, “who has won the large majority of them?” It’s been buyers with great credit and jobs, strong income, and large down payments.
• During the Pandemic the vast majority of job losses were in the retail, restaurant, and hospitality sectors and very few of those people owned a home due to our very high home prices. 

A Cold Front Hits the Denver Real Estate Market

The late summer slowdown is here, but it won’t last.  In the past two weeks, I have helped clients get homes under contract without a bidding war! It seems that only a few weeks ago, every home we looked at had multiple offers and was selling for 10-20% over the list price. In two out of the three contracts, the buyer ended up getting the home for less than asking, something I haven’t seen for over a year!

• Showing Time reports that showings which had increased by over 50% in April vs January almost went flat at the end of May (thank Memorial Day for this) and rebounded in early June, but the number of showings in June is only about 20% higher than they were in January.

Right now, even a great property at an affordable price point might see 20 to 30 showings and 2 or 3 offers, versus 100 showings and 15+ offers that we saw in April.

• New listings are finally increasing at the 11-county MLS has seen 5,733 new listings in the last 3 weeks. In fact, there were more new listings last week than closed transactions for the first time since last August!

Why has the market cooled off? Honestly, it does so every year beginning around Father’s Day. Second, there is HUGE PENT-UP DEMAND FOR VACATIONS as many people didn’t take a vacation last year. And when you are on vacation you are not looking at homes typically. Third, Wells Fargo senior economist Mark Vitner added that more employers are starting to call employees back to the office in other states. Thus, demand for housing in Colorado may drop especially in the mountain resort towns.

So, what should we do? Take advantage of this cold front and get off the fence. If you have been waiting for the right time to buy, NOW IS THE TIME to aggressively shop for a home and get under contract.

Third, with your sellers make sure they price their homes competitively. Every summer I see this happen—a seller in June or July knows a neighbor or friend or co-worker who listed their home for sale in April for $499k and it sold for $575k and this new seller wants to list their home for $575k in hopes of getting even more. The best way to get the most money is to list your home just below the market and create demand and scarcity. Here is a link to the Denver Post story from June 27^th--

https://www.denverpost.com/2021/06/27/denver-real-estate-home-sales-buyers-relief/