Bidding Wars Will Rise Along With Home Prices
DENVER (CBS4) – Are home prices going up too fast, and should buyers and sellers be worried? 4 On Your Side Consumer Investigator Jodi Brooks found some answers because it all sounds too good on paper.
In Southeast Denver homes for sale are sparse. One home was on the market for just two days, another was for sale by owner, and just one more with a price reduction. Brooks met an agent and potential homebuyer. The concern is prices are going up, but are they too high?
“I keep asking (the agent) that, and getting her feedback on — is this okay for this neighborhood?” homebuyer Richard Savino said.
Denver area home prices are up more than 9 percent compared to last year.
“Prices are going up because buyers are willing to pay more,” said real estate expert Jack O’Connor, owner of The Denver 100.
The average median home price in February this year was $255,000 with an inventory of just under 7,000 homes on the market. Going back to 2007, the median price was $235,000, and the inventory level almost 25,000 homes.
The inventory levels set the price, which is why O’Connor predicts homes prices will continue to go up.
“You’ll see a 3 to 4 percent increase in 2013. You’ll see a little bit of flattening maybe in 2014 because those interest rates are going to start to rise,” he said.
But there is a “buyer beware.”
“You’re in a bidding war of three, four, five, six, seven people, which we’re seeing quite regularly right now, You may end up paying too much, and if you have to sell in the next 3 years, you’ve ultimately paid too much,” O’Connor said.
But he says don’t worry about a housing bubble. With low interest rates, down payments and low inventory, bidding wars are okay, especially when the buyer will be in the home 5 to 7 years.