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, according to the 2020 Edition of 5280 Magazine’s Annual Real Estate Issue:
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.
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.”
If you’re thinking about buying a Colorado property, or selling one, we’re here to help.
Related Links:
Would you buy a home sight-unseen?
Listing + Selling Your Property During a COVID Stay-at-Home Order
