The real estate market like any other market ebbs and flows, runs cold and hot. Like a stock market, in a perfect world we want to buy low and sell high. Often in real estate, we refer to the changes as hot and cold. So, what exactly is a hot real estate market?
Whether you’re buying or selling a home, there are more than enough things to keep you busy. Between inspections, valuations, repairs, remodels, listings, marketing, and everything else, it’s easy to get distracted and lose track of something.
One factor that buyers and sellers tend to overlook is the temperature of the market. While you don’t always have the luxury of choosing when to buy a new home or sell your current one, if you aren’t in a rush, you definitely want to hold off until the temperature is just right.
But what does the market temperature mean? That’s what this post is all about.
Here’s the basic description of market temperature:
A hot market is good for sellers. Expect fast sales and good prices.
A cold market is good for buyers. Expect more homes to choose from and negotiable prices.
It gets a little bit more nuanced than that, so if you really want to get in the weeds, let’s take a closer look at the continuum of market temperature. We say continuum because hot and cold are the extremes, and the real estate market can really fall anywhere in the middle. The temperature is a gauge of the number of people looking for homes in a given area compared to the number of homes available for sale. The closer these numbers are to equal, the more neutral the market temperature.
In a hot real estate market, there are a lot of people looking to buy but not enough homes for all of them. A hot real estate market, therefore, is a seller’s market. Because there is a lot of demand for their homes, sellers can expect a lot of viewings in a short amount of time. They can also expect buyers who aren’t very picky and offers that are at (or even above) the asking price.
In a cold real estate market, there are more homes for sale than there are people looking to buy. That’s why a cold market is known as a buyer’s market. Sellers have to compete with each other, so final prices are going to be lower and homes are likely to be in better condition. Furthermore, buyers have plenty of homes too look at, allowing for more time to find the perfect match.
Denver has some very strong markets for sellers right now. If you find yourself living in one of these neighborhoods and aren’t planning on staying put forever, it might be a good idea to sell your home while the market is hot [link to “How to cash in on a hot market” article]. Sales will be fast and prices high.
Green Valley Ranch is one of the most sought after markets in Denver at the moment. Prices are the highest they’ve been in years and buyers are still fighting to find a place to live here.
Washington Park is also an ideal neighborhood to sell in. Average home values rose 7.7% last year, to a median value over $820,000. It’s a great place for homeowners to move in because it is close to downtown Denver but still plentiful in green space.
There are plenty of other hot markets in Denver, but we don’t have space to fit them all. If you’re thinking about selling, try out our home valuation tool to see what you can expect to get for your house. And don’t hesitate to contact Walden Novak to learn more about the temperature of your neighborhood.