Why The Real Estate Frenzy Won't End Anytime Soon
DENVER (CBS4)- Devin and Faith Howard are ready to move to the suburbs. They've been in their cozy Park Hill duplex for long enough to make some nice improvements and watch the value rise.
"It's time to get some more space than we had in our first home," said Devin.
Selling was the easy part. Their realtor knew people would jump at the chance for their place when it went on the market.
"So I tell them take some time off and enjoy yourself because it's going to be a parade of people though your house this weekend," said realtor Dee Cianco.
Her company staged the home with new furniture to open it up and sure enough, there was a good offer in just one day.
"Our inventory is the lowest it's been in 20 years when you adjust for new population influx," said Cianco. "You've got to find the 85 percent house or the 85 percent spouse, if you find it, you'd better buy it, or you'd better marry them."
That put the pressure on Devin and Faith, they had to buy-- quickly. But buying is not so easy.
"If you find a good one you've got to jump on it and be aggressive or you're going to miss out," said Cianco.
That had the couple showing up to look at a home that looked great in Highlands Ranch. It was in the hands of a relocation company, so the price was set to move. They loved it.
While they showed up within minutes of it going on the market, there were already two other potential buyers at the house. By the end of the day, their offer, thousands over the asking price was in. But they weren't alone.
They were pre-qualified with a mortgage lender. They had a down payment and earnest money in a checking account.
"It's important when we deliver the offer that it's a complete offer," said Cianco.
It wasn't enough. Because their house still had to close, there was a contingency. No deal. The house went to someone else.
They're not alone.
"I usually get up to the top four and then I'm out," said potential home buyer Britton Slagle.
She's looking for a place of her own. A first-time buyer, Britton has done her best to scrimp and save. The rising prices and the buyers with more money have more wiggle room in their offers.
She's staying positive, but ,"It is a little exhausting to have to look at this every day and see that I can't find a home."
None of the offers she's put in have been accepted.
It's gotten so bad that homeowner Gary McDowell of Arvada was besieged when he decided to drop the idea of selling his home. He had a complicated deal worked out with someone to sell, but it fell through. Then Gary decided to stay in the house he's been in for 26 years. He tried to get it taken out of the MLS.
"We asked them to take it off, just take it out completely so we wouldn't have any issues and they said, 'Well we don't do that,'" said McDowell.
Eventually, his listing expired. That's when the realtors saw potential to list the home and the calls started.
"First day there were 40," said Gary. "Forty calls. And I had 12 pieces of mail and I had 12 voicemails. That was day one. It got worse from there. I really got upset and I actually screamed at one of the realtors."
When home sales are hot the release valve is new home construction. Colorado is looking at decades of likely growth ahead and the demand will only continue.
"But it's really stuck right now," said John Covert of Metrostudy, which looks at the market for the new home construction industry.
When the recession hit in 2008, workers were idled. Many sought jobs elsewhere and trade labor thinned out. Now, there aren't enough workers to do the job.
"It's very difficult for builders to get homes built because of the lack of framers, roofers, electricians, plumbers," said Covert.
The industry would love to build more. They're having difficulty getting lots and building is coming farther and farther out. But with labor shortages, higher land costs and higher tap fees, it's taking as much as twice as long and more to build a new home.
Covert thinks builders could sell 15,000 to 16,000 new homes this year; about 9,000 thousand will be built.
That means there's nothing to ease demand. And with demand so high, getting a home for people like Devin and Faith and Britton, is likely to be a challenge for a while.
Alan Gionet is anchor of the CBS4 Morning News and reports on a wide variety of issues and "Good Question" stories. He started at CBS4 in 1994. Follow Alan on Twitter @AlanGTV.
