Our lifestyles have changed this year and our new routines are affecting the way we buy homes. With the elimination of commutes, increase in time at home and the homemade casseroles replacing happy hours at restaurants, home buyers have shifted their priorities. As a result, real estate transactions are surging in unpredictable ways.
“The market has done amazingly well this year—beyond anything anyone would’ve imagined in the middle of March when businesses were closed down,” said Rike Palese, residential specialist and managing broker at Re/Max Professionals. “At the time, there was a panic while we wondered what would happen and how consumers would respond. Since then, the market has gone crazy and people are buying at higher rates than ever,” said Palese, who earned a degree in architectural design at the University of Colorado. He initially focused on commercial design but had always had a passion for residential design and began working with Re/Max on the residential side 27 years ago. Re/Max is an international leader in both franchising and real estate, with its corporate headquarters in Denver.
Palese pointed out the current craving for nurturing environments that is prevalent due to the shift of in-home entertaining of family and guests alike. The desire for homey, open floor plans and more casual entertaining spaces as opposed to smaller, more defined rooms, including formal dining rooms, has carried over. Warmer colors are gaining traction and more brushed brass hardware is popping up compared to the coveted chrome of January.
Home life is in the spotlight as professionals are working from home, children are learning from home and all family members of a household are at home more in general, which translates to the critical need for not only more space, but also the utility of a designated space. This is also a driving factor behind the current trend toward remodeling.
Homebuyers are ultimately looking to get more comfort and value out of their houses. Homes with a “bonus space” like a loft, extra room or large basement are being snapped up in order to be converted into second offices, fitness centers, school rooms, home theaters and game rooms. Outdoor entertaining amenities are also on the rise including built-in grills, firepits on the patio and even backyard swimming pools. (Yes, in Colorado.) A big backyard is also key for getting kids out of their cubicles, and nearby walking, hiking and biking trails preserve sanity.
Multi-generational homes are popular as households are consolidating to save on costs, as in-home care for seniors is preferred and as more college students are postponing moving to campus. Almost every member of the household, even young, school-aged children, needs a designated “Zoom area” to take video conference calls, which was not factored into the pre-COVID-19 household plan. The sprawl, paired with the decreased or nonexistent need to commute, has families moving farther out from the city in order to find more house for a comparable price.
Some are even adopting an existentialist approach and springing for the dream house now and taking advantage of the opportunity while they can. The exception is the downtown Denver market, which is relatively sluggish, especially considering sporting venues and many restaurants are closed. This will likely shift again when people want to come back to downtown.
Additional contributing factors to high demand are the ability to lock in loans at low interest rates as well as the influx of from buyers coming from more expensive and more densely populated areas such as New York City, San Francisco, Chicago and Philadelphia, seeking safety and space without the pressure to return in the near future. It doesn’t hurt that companies are also relocating here for financial reasons as well as the lauded variety of outdoor recreation Colorado offers.
“Though the housing market has been strong and migration from other cities has been common for a number of years, this year has been different in that January through March were strong as usual. And then April and May were slower than expected, which pushed the usual rush of spring buyers into the formerly slow summer season, making July and August surprisingly strong sales months. That led to a more consistent fall season, despite the election, which typically slows due to apprehension,” said Palese.
Will the demand drop? Not according to Palese. “Inventory is already so low, there would have to be a tremendous shift even to get back to normal, which isn’t likely considering many companies won’t go back to full-time office requirements. And even if they do, employees may not comply in order to maintain their newfound Denver lifestyles. A shift has happened that is going to last longer than 18 months and may even be permanent.”
He indicated that now is still a safe time to buy because you know the conditions of the market, which include appreciation and low interest rates. If you plan to wait, you are betting on future conditions, which can be riskier. “This is not an artificially inflated pricing structure” he said, citing that in an “even” housing market there are 12,000-13,000 available homes on the market and this year, at the lowest point, inventory was at under 6,000 homes for sale. “Prices are based on what the market will bear,” said Palese. Prices are expected to increase in the foreseeable future and it’s important to hold that equity and value.
Furthermore, if you are looking to jump on the buying bandwagon, the holidays may be the best time. Right now, prices are stabilizing and there is less competition, so even though there are fewer options, you may be able to land the right deal.
As for those looking to sell, most commonly now to downsize, focus on updating features and maintaining the condition of the home. “Just because it’s a robust market, doesn’t mean you can necessarily get top dollar. It’s always relative,” said Palese.
Merry house hunting!
Danielle Yuthas is a fourth-generation Denver native who is the senior director of marketing for the national franchise brand, SpeedPro, by day and a freelance writer and contributor to Colorado Expression by night. Yuthas was in the throes of a home office revamp at her Highlands heirloom home at the time she was writing this article.
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