Well, Denver: It’s been quite a journey.

Over the past decade, we’ve experienced what just might be the metro area’s most volatile period of growth ever and a record-setting real estate market. The ride hasn’t been smooth, but this past winter it felt like we were due to catch our breath and figure out what the heck just happened. “We’ve never experienced a run-up like that,” says Kerron Stokes with Re/Max Leaders. “We’ve had a decade with no punctuation.”

But then March came—and it brought with it so many question marks. COVID-19 dramatically changed Coloradans’ daily lives. We altered the way we do business. We filled our cabinets with toilet paper and booze. And we stayed home.

As such, your home is something you’ve probably spent a lot of time thinking about recently. Maybe you’re dreaming about more space. Perhaps you’re looking to downsize. Or it’s possible that life has shifted and home means something different to you today than it did months ago. Maybe, just maybe, you’re starting to think about buying or selling.

If you are, it’s difficult to predict what’s next. What we do know is that Denver’s real estate market was booming this past winter. Sellers were in charge, thanks to extremely low inventory, which forced buyers to compete against multiple bids at almost every price. Some buyers, however, had learned how to demand more concessions, giving them a modicum of control. Meanwhile, brokers obsessed over pricing so that a house wouldn’t sit on the market for too long.

As the market returns, some of those factors will remain relevant. Others won’t. So, we talked to real estate experts to find out some of the questions you should be asking now. “We’re going to keep buying and selling,” says Re/Max’s Lisa Nguyen. “We just need to figure out how.”

So, You Want to Sell…

Illustration by David Plunkert

The real estate market was tilted in your favor earlier this year—but that doesn’t mean you can just put your house on the market when things pick up again. Buyers are tired of Denver’s boom, and they’re taking their frustrations out by being a lot pickier about putting in offers. But with a little prep, you’ll be ready.

1. COVID-19 has changed everything. What will happen if I try to sell my home?
Even in the first days of social distancing suggestions, the real estate market was humming along (albeit more slowly). After all, people still needed to buy and sell homes. Agents offered extra booties to cover shoes during open houses and wiped down door handles. Others ramped up online tours and uploaded digital photo galleries. And then came the stay-at-home orders—and the market slowed down even more.

“I wish I had a crystal ball,” says Regina Jackson, the owner of Action Jackson Realty. “I think we have to wait and see how this is all going to shake out.” And while we wait, there was one thing many of the experts we talked to agreed on: You can expect more virtual solutions in the real estate market as it adapts. In other words, make sure your home is camera-ready.

Mark Your Calendars

Just in case, here are some key dates to keep track of for the 2020 election cycle.
June 8, 2020: Primary election ballots in the mail
June 30, 2020: Primary election
October 9, 2020: General election ballots in the mail
November 3, 2020: General election

2. If COVID-19 doesn’t derail my plans to sell my home this year, could the 2020 election?
Conventional wisdom tells us the real estate market slows during election years. And—before things get political—we should point out that the slowdown isn’t dependent upon which party is in power or who’s on the ticket. Buyers and sellers just hesitate when ballots are imminent.

Fortunately, Denver’s market has been relentless enough that the election may not be a major factor. In general, the Mile High City’s economy is more diverse (gone are the ’80s, when our fortunes were heavily tied to the unpredictable energy market); people continue to pour into the metro area and need homes; and major events that could have slowed sales in Denver, including trade war news and the government shutdown, didn’t halt metro-area sales in 2018 or 2019. Of course, COVID-19’s influence could be a different story. In short, the upcoming election may have less of an impact on home sales because Denver’s reality is more complex than it once was. “Regardless of what happens with the elections,” says Re/Max’s Lisa Nguyen, “I just don’t see Colorado’s market affected as directly [by that].”

3. My neighbor’s house sold for an outrageously high amount a couple of years ago. Does that mean I can price my abode above that?
If there’s one thing brokers can agree upon, it’s that pricing a house is an art form. But, you might ask, hasn’t that always been the case? Isn’t that what we pay agents to do? Those are fair questions, but in the past 12 months, pricing a house in the metro area has become increasingly tricky. Here’s why: Appraisers gather prices from nearby sales (“comps,” in real estate parlance) to estimate a house’s value. But they typically use data less than six months old, which means the maximum sale prices we saw in 2018 are no longer relevant (and the impact of stay-at-home orders this spring could impact prices later this year). Put another way, the mega price tag on your neighbor’s house from that time period isn’t as applicable as you probably want it to be. “There are a lot of people who didn’t catch up to the fact that the market was different last year, and they were pricing incorrectly,” says Jill Schafer, a Realtor with Kentwood Real Estate and chair of the Denver Metro Association of Realtors’ market trends committee. “They were trying to top the last sale when you needed to be slightly under it.” Now, brokers will need to be even more savvy to figure out pricing as the market recovers.

4. The buyers are going to do their own inspection, so why do I need to get a pre-inspection?
Surprises, while lovely when you’re celebrating a birthday, aren’t as much fun when you’re trying to sell your biggest financial asset. Why not learn ahead of time that you really should trim that tree, replace the roof, fix the sewer line, install a new water heater, or repair the trip hazard on the sidewalk? You’re probably not going to do all of that, but figuring out what you might want to patch up beforehand can make the negotiating process smoother—and buyers will appreciate a move-in-ready, up-to-date listing.

“When I have high-dollar properties, I will say to the sellers, ‘You need to get an inspector in here and fix all the stuff that needs to get fixed now,’  ” says Action Jackson Realty’s Regina Jackson, “so when the house is ready to sell we don’t have all these hiccups around inspection.” Although a pre-inspection can cost between $300 and $400 for an average-size house, the outlay is often worth it to avoid disruptions in the negotiation process, which could include anything from a buyer requesting a price reduction to cover a drywall repair to a deal dissolving completely over a questionable roof. And putting a house back on the market isn’t ideal. “The sellers lose all their leverage after that,” says Kentwood Real Estate’s Britt Armstrong.

5. My house looks amazing—at least, that’s what my 50 Instagram followers say. Do I really need to hire a stager?
We know you love displaying your collection of pint glasses from Colorado craft breweries, keeping Grandma’s hand-sewn quilt thrown over the sofa, and positioning the coffee table the perfect distance away from the couch to use it as a footrest. The problem is, buyers might not. By the time they find your oh-so-cozy abode (potentially solely via virtual tour due to COVID-19), they’ve seen plenty of others and might be feeling a little judgy. Your house could feel dark. Your guestroom paint might not be this year’s trending Pantone hue. The pricey carpet you just installed might look “cheap” to them. “They’re looking for reasons to check something off their list,” says Sarah Lewis, who owns Sarah Noel Interiors, a Denver-based staging and design company (services for occupied homes start at $900). “You want to gain a competitive edge to make a home [feel] as move-in ready as possible.” And, with the increase in virtual tours, you need to stand out on screen. “The visual impact is more important than ever,” Lewis says, “because people are shopping from their couches now.”

I Spy

Buyers often have a different take on your space, so we asked Denver designer Sarah Lewis to help you see things from their perspectives.

What you see: A comfy couch perfectly positioned in front of the TV for Netflix binge sessions.
What a buyer sees: Stars. They just bumped their knees on the couch’s frame when they walked into the room.
The fix: Concentrate on how it feels to walk through the room. Rotate—or remove—furniture to give buyers (or a videographer filming a tour) plenty of space to move.

What you see: Ah, memories! There’s that family photo taken in front of the Flatirons. The picture of you holding your newborn baby. Aw, a picture of your very first puppy….
What a buyer sees: All the details of your life, while missing the built-in bookshelves, walk-in pantry, and charm of your beautiful bungalow.
The fix: You don’t necessarily need to hide your personal photos (focal points are good!), but remember that a lot of strangers will ogle your precious moments. Swap out and pare down to keep your private life, well, private.

What you see: A fully restored Denver Square with original wood finishings.
What a buyer sees: A dark cave.
The fix: To show off a historic home’s woody attributes, use different textures, like blankets, to lighten up the space.

What you see: A home you built in 2010 with what were all the latest amenities.
What a buyer sees: Decade-old fixtures.
The fix: Install a new chandelier or replace a kitchen backsplash for quick but impactful updates.

Mind the Gap

Based on projections, the metro area had fewer homes for sale than it should have had in February, which drove up prices but also left sellers in a bind when they needed new homes.

3,951: Homes the metro area was projected to have for sale in February
2,967: Actual homes for sale in February (24.9 percent lower than projected)

6. Should I consider one of those new iBuyer services?
No, iBuying isn’t the latest Apple release. It’s a general term for companies that pay cash for houses they fix up and sell. If that sounds a lot like the “We Buy Houses For Cash” flyers you see on posts around town, you’re right. The difference is scale: Instead of an investor buying a few houses in a select geographic area, iBuyers buy and sell many, many homes. (For example, Opendoor—a major iBuying company—has worked with 70,000 people since it launched in 2014. It entered Denver’s market in 2018.) Because buyers and sellers using iBuying services don’t need a broker, these companies could end up disrupting the marketplace. As a result, Keller Williams’ Kato Mitchell says these companies are “one of the biggest stories in the market right now.”

Here’s how it works: With Opendoor, for example, when you want to sell, you fill out an online questionnaire about your house. (When was it built? How many bedrooms? How old is the refrigerator?) Opendoor only buys homes in the metro area built after 1960 and valued between $150,000 and $600,000, but if your home fits those parameters (and others), the company feeds your info into its algorithm and sends you a price for your home. If you accept the offer (the service is free up to this point), you name your closing date. Opendoor charges a fee—around six and a half percent of the sale price, in the Denver area—and buys your home. And. That’s. It. No messy inspection process. No 45-day closing period. Within two weeks, you could have cash for your home. Opendoor spokesperson Patrick Mahoney says it works particularly well for sellers who want convenience.

Although it might sound fantastically hassle-free, not everyone is sold on the practice because Opendoor purchase offers can be less than what a seller would get in an open, competitive market. Still, since 2018, Opendoor has had more than 1,000 customers in the Denver metro area. (In mid-March, the company halted all acquisitions nationwide in response to the pandemic. Notably, other iBuyer programs, including one launched by Zillow, were also suspended.) The technology could rattle Denver’s real estate market, but not all brokers are worried. “I believe, because of their emergence in the market,” says Re/Max Leaders’ Kerron Stokes, “it has demonstrated the benefit of working with an agent.”

At What Cost?

Opendoor analyzed its Denver-area data from June 2018 to July 2019 to find out what features drove down a home’s sale price.

Mostly carpet: -$10,800
Busy street: -$6,000
Formica or tile counters: -$4,800

7. If I sell, will I be able to find a comparable home in the metro area?
Experts will give you a solid “maybe” on this one. “There are two kinds of key changes in the demographics of [local] homeownership,” says Kentwood Real Estate’s CEO, Gretchen Rosenberg. “One is that people are staying in their homes longer than they used to.” Another change relates to what she calls a self-fulfilling prophecy. “People don’t want to put their houses on the market because they’re afraid they won’t find a replacement,” she says. Essentially, potential sellers say they want to move but think there is no home out there for them to purchase. It’s a classic chicken-or-the-egg quandary.

So, You Want to Buy…

Illustration by David Plunkert

You’ve heard the stories about how competitive the market was earlier this year. You may have even been looking and shied away from buying until COVID-19 showed up. Well, the landscape has transformed—in big and small ways—enough that you might start (virtually) looking again.

1. Has COVID-19 cooled the market?
At press time in early April, it was too soon to say how everything from stay-at-home orders to the economic impact of layoffs might affect the market long-term. “Clearly we are in unprecedented times,” says Usaj Realty’s Megan Ivy. But, she adds, “even now, buyers are buying and sellers are selling and we have [more] people in the pipeline to resume those activities.” Many aspects of the real estate market were deemed essential, and others have adjusted. For instance, real estate closings in Colorado require “wet signatures,” meaning that a buyer and seller can’t e-sign, so title companies had to improvise and started offering drive-by and contactless options to close deals. So, in summary, the market keeps moving—albeit at a slower pace.

Where the Homes Are

Inventory changes daily, but here are some zip codes that were more friendly to either buyers or sellers in February than other areas.

Illustration by Sean Parsons

2. I love, love, love this house. Should I write a letter to the sellers about why?
The short answer is no. We know it was all the rage for a while, so let us explain: Would you ever write a note to a used car salesman explaining why he must, must, must sell you that 2017 Subaru because you dream of summiting all the state’s fourteeners (with attached photos of your yellow Lab to win him over)? Of course not; it’s a business transaction. And, although there are emotions involved, purchasing a home is too.

In home sales, the practice of letter writing has gone out of favor because these missives were creepy at best (why does a seller need to know the middle names of all your pets?) and, at worst, created an opportunity for discrimination. For example, all that detail made it possible for a seller to reject an offer because of a buyer’s race or gender or sexual orientation—or, at least, for there to be a perception that he or she did. “We started to see a lot of litigation in the marketplace,” says Kentwood Real Estate’s Britt Armstrong. To protect both buyers and sellers, Armstrong’s team stopped accepting letters.

That decision is part of a larger push by agents to ensure the home buying and selling process is nondiscriminatory. Locally, the Denver Metro Association of Realtors formed a committee four years ago to look at this very issue, and the group has attracted national attention for that effort.

Perhaps it can’t undo the effects of generational racism in the housing market, but it facilitates conversation. “We thought if we formed this task force…we could be another voice in the real estate community,” says Re/Max’s Lisa Nguyen, who serves on the committee. “We can give education…[and] we can teach people about fair housing.”

3. I’m ready to find the perfect house. Do I really need to use a real estate professional—or can I DIY the entire process?
For you industrious types, no, you don’t need a real estate agent, a broker, or a Realtor (a title that indicates a special membership for agents who help people buy and sell homes). You can absolutely sort through the listings, find a lender, plot out open houses, and research to make sure the deed is clear from liens or levies. So, yes, you can DIY your home-buying project. But just like you can DIY a bathroom remodel by tearing out counters, replacing the fixtures, and grouting tile, perhaps you don’t want to spend your Saturdays that way. In a market as competitive as Denver’s, a professional can guide you through what is a labyrinthine process—and help you avoid the equivalent of that fourth trip to Home Depot for the right grouting tool.

4. Can I buy a house without contributing to displacement or gentrification?
Probably not. At least, that’s what Mary Kate Morr has learned on her house search. Morr grew up on Denver’s north side and fondly remembers a childhood in a tight-knit community, learning in diverse classrooms where she, as a white student, was often in the minority. Now back in Denver after graduating from college, she’s dreaming about buying her first home and wants to live in a neighborhood like the one in which she grew up. And therein lies the problem: The more she thinks about investing in a property, the more she wonders if her future purchase will contribute to gentrification.

Morr’s not the only person asking; brokers are hearing similar concerns from buyers who want to make sure buying their dream home doesn’t irreparably alter the character and fabric of a neighborhood. Megan Ivy, who’s worked as an agent for Usaj Realty in Denver for five years, says the question comes up frequently—and doesn’t have a simple answer. Says Ivy: “A lot of people who don’t want to contribute to gentrification may not be able to afford homes in neighborhoods that have fully transitioned.”

Broker Regina Jackson, who co-founded Race 2 Dinner, a group that hosts discussions about race and white privilege, says that she too has had conversations with clients and friends on the topic, but she believes the solution is bigger than one real estate transaction. “I don’t think it is an individual problem,” she says. “I think it is a government problem.” Local and state politicians, for example, could work to preserve affordable housing and incentivize developers to build more. Solutions could also include requiring developers to build more units at a variety of prices and looking at every aspect of real estate transactions to ensure that discrimination doesn’t occur.

In the meantime, Morr is still searching for answers. In response to her queries, she’s received advice that if she does buy, she should get to know the neighborhood, learn its history, and support its businesses and individuals. Which, after all, seems like counsel we can all use to be better neighbors.

5. Are fixer-uppers worth it?
Not so much. That’s not because finding and fixing up a home that just needs a little TLC isn’t still appealing; we like home improvement reality shows as much as you do. The problem is that escalating sale prices and rising construction costs across the metro area are making potential fixer-uppers (as well as fix-and-flip properties) difficult to find. It’s a sentiment echoed by others in the industry. “The spread just isn’t there like it used to be,” says West and Main Homes’ Stacie Staub. “We’re not seeing the fixer-upper [on the market] that DIY-happy millennials can get into.” Plus, more and more buyers want the work done before they buy a home. “HGTV has totally changed buyers,” Kentwood Real Estate’s Gretchen Rosenberg says. “When buyers [look at] a house, they want to see what they saw on TV…. Giving a carpet allowance doesn’t work anymore.”

Illustration by David Plunkert

6. At least five other people want the house I love—what can I do to stand out from other buyers’ offers?
If you’re finally ready to give up renting; if you hope to trade up from that starter home; if you want to add an investment property to your asset portfolio; or if you’re otherwise really, really serious about buying: Talk to a mortgage broker to get your finances in order. You should get prequalified for a loan and figure out what you can truly come up with for a down payment before you even look at listings. “People have to know what they can afford,” says Kentwood Real Estate’s Jill Schafer.

We’re serious. And so are sellers (and, more importantly, so are their brokers). If you’re just browsing and don’t have lender documents to back up an offer, don’t be surprised when a homeowner doesn’t take your interest seriously. And while cash-in-hand offers (yup, that means buyers have, say, $650,000 in cash) have dominated the real estate scene lately, lenders are working to make other buyers—who typically take out a mortgage and make a down payment—equally enticing to sellers. “Cash is still king, but we can come close,” says Mike Kenevan, who is a senior loan officer at Amerifirst Financial.

Much like finding the right broker is key, so is selecting a lender. “Pay attention to who is on your team,” says Usaj Realty’s Megan Ivy. “You want a lender who is going to pick up the phone and make the call to the seller on your behalf.” Basically, if you’re ready to buy, you want paperwork in hand that’s just waiting for you to ink in the address of your future home.

7. Are there any price points at which I can get a deal?
Bad news, folks. There haven’t been deals in Denver in a long time. While COVID-19 may change that, it may still be the case that it’ll be a struggle just to score a home, much less get a bargain. On average, in February, homes were on the market for 35 days, says Megan Aller, an account executive with First American Title Insurance Company. But for a home in the $200,000 to $399,000 range (one of the most competitive), the average was just 22 days. About 50 percent of homes were under contract within 10 days, she says.

For a while, it looked like lower interest rates—the Federal Reserve dropped the federal funds rate, which is the rate that banks pay to borrow money from the government, twice in March—might make homes more accessible. But mortgage rates don’t move in tandem. When the Fed made its announcement, homeowners flocked to refinance their homes, which (and we’re oversimplifying here) helped push the 30-year fixed-rate mortgage average up. The changes were tumultuous enough that lenders had trouble keeping pace (and that was before stay-at-home orders). But, if mortgage rates do stay reasonably low, the amount people can afford to spend on a home might grow. Fairway Independent Mortgage Corp.’s Nicole Rueth estimates that someone who was looking to buy at the $450,000 level in January 2019 might have been able to add more than $50,000 to that number in March.

Out of Sync

The Federal Funds Rate and 30-year mortgage rate averages don’t necessarily work in lockstep.

Illustration by Sean Parsons. Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis, March 29, 2020. Federal Reserve Bank of New York, Effective Federal Funds Rate [EFFR], retrieved from FRED, Federal Reserve Bank of St. Louis, March 30, 2020.

This article was originally published in 5280 May 2020.
Natasha Gardner
Natasha Gardner
Natasha Gardner is a Denver-based writer and the former Articles Editor for 5280.