Is Thinking of Real Estate As a Seasonal Market Useful Anymore?
Any specific answer to this question depends on who’s doing the asking, but the general answer is, not as seasonal as it used to be. The front range is a complicated market with constant changes, keeping things interesting for Heather and Sean.
To best answer the frequently asked question “Should we wait,” let’s focus on just one area: Evergreen. And I’ll keep my commentary focused on only three segments.
We can call the first segment, with prices of $500,000 and less, our “Hot” market. These properties seemingly evaporate immediately once they hit the market.
We will refer to the $600,000 -$800,000 segment as our “Average” market because well, statistically, it is.
For our high end, I like $1,500,000 to $3,500,000 for obvious reasons, but also because that’s where this pricing segment begins to behave statistically differently.
The separation of these three price points is useful, because when we try to view them all together without any differentiation at all, the data resembles a mid-year glob, reinforcing the slightly antiquated and lazy May-to-August pattern, and hiding a variety of important insights. The truth gets lost and the message becomes pessimistic and just not very helpful or accurate.
We Service Many Price Points & Markets
This issue is important to Heather Graham and myself because we service many price points and markets year around, seeking to understand all of them so we may best service our clients. All addresses and all price points have both challenges and advantages. In order for us to perform at the high level our clients have come to expect, we believe the best way to understand these factors is to examine the conditions that enable them.
I would be remiss if I did not point out that today, we’re discussing residential properties to the exclusion of land, income or Investment properties. We are happy to lend our expertise to discussions regarding these other segments, so please don’t hesitate to call us at 303-895-4663, or 720-201-4187. We love to talk shop.
After a decade of selling real estate in the highly specialized markets of Evergreen, Conifer, Genesee, Golden and Morrison, Colorado, I have come to the conclusion that the conventional wisdom regarding local real estate practices run contrary to our results when it comes to seasonal considerations. In researching for this article I am seeking to understand why Heather’s and my personal expectations have been a bit out of sync with that of some of our peers.
For example, the fourth quarter has traditionally been our most productive quarter. This also seems to be true for most (not all) of the top producers serving our area, while the warmer months seem to be more popular for the typical local Real Estate talent. We understand. What Realtor does not love selling property in the Spring and Summer, with the awe-inspiring promise of rebirth and rejuvenation, warming sun and real estate signs safe from the danger of snow plows?
But Spring & Summer Are Only Half the Story Up Here.
Census data tells us that while Evergreen has a rare combination of top-rated schools and an active lifestyle, less than 23% of households in Evergreen have school age children, and a highly mitigating percentage of their moves stay within district.
My Sotheby’s contemporaries in Texas tell me that sales slow there during their brutal Summer months and pick up in the Winter. This is important knowledge about one of our largest feeder markets, but Texas markets are well behind mid western areas like Chicago, with its brutally long and cold winter months when it comes to sending people to the Colorado foothills. This population shows up in force and truly appreciate our climate all year round, but especially our relatively mild and pleasant winters. These other markets could start to explain why our experience with the local fourth quarter real estate market has been so productive.
In Today’s Market, “Hot,” Is an Understatement
Our hot $500,000 and lower market segment was the first to recover from the great recession, aided by investors absorbing as much of the “have-to-sells” as they could, as fast as they could. For the most part, the remainder consisted of pent up demand and discretionary sellers, as inventory burned off quickly. Lately, however, the demand has caused such appreciation that appraisers are challenged to keep up with the new values.
The current average days on market have been under two weeks, making the word “hot” to describe this segment seem like an understatement. This price point starts to take off in mid-February, and performs quietly and steadily under the radar until April, because of the effect of attrition on still low inventories.
By April our Hot Market is at a pretty good sprint, lasting until the end of August, when availability is again challenged. Even through the winter this effect is measurable, with sales volume dropping by two thirds.
The notable issue here is that inventory drops faster than sales, creating a shortage. This shortage creates a seasonal log jam because sellers have no place to move to. This seems to affect the Hot Market more than the other segments.
When looking at the graph, one might ask “How much of a contributing factor is Inventory?” My answer is that it is a substantial factor, and was a major issue, as our Evergreen inventory actually dropped to fewer than fifty homes for sale early last spring. The start of 2016 was painful for this segment, then the annual log jam broke.
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Just a few years ago, our market’s median price stood at about $675,000. Today, it is closer to $869,000 as our market continues to thrive. This number vacillates considerably as we progress through the year in a seasonal pattern, but it is showing signs of stabilizing. In order to differentiate and follow this segment, the range of $600,000 to $800,000 works well to allow us to talk about an Average Market. Our Average Market typically starts to hit its stride in May, before tapering off in September, although in 2015 we saw this segment continue to perform well through November.
This pattern seems to be trending. For example the Winter sales volume lows of the Average Market segment were not as severe as the drop off in the Hot Market this season. This pattern is showing strong and optimistic signs of resilience, as the duration and depth of the slower season becomes more forgiving year after year.
In other words, winter is not nearly as worrisome for this market as it once was. We really like to see this and hope the pattern continues to improve. Stability and steady growth are more promising for a sustainable increase in property values, especially when compared to the difficult to sustain, double digit growth that can create the dangerous conditions that lead to housing market bubbles.
Historic Sales By Year: $600,000 – $800,000
Positive Signals in the Luxury Market
To best measure our Luxury Market, let’s start at $1,500,000 and measure up to $3,500,000. This price point represents the most recent market segment to recover from the great recession. But like every good Cinderella Story, its arrival is dramatic. This unique segment of our market is if anything even less seasonal than the others. It’s also changing so fast that it’s a little tough to get a good read on it right now.
The numbers for 2016 are not all in yet, of course, but anecdotal information from our pipeline – along with reports from other top producers – indicates that another strong fourth quarter is on the horizon.
The first three quarters of 2016 are what we can see from here, and we like what we see so far. As with most election years, the fear of a slowdown in the luxury housing market has been present, but contrary to these fears, the potential speed bump was smaller than anticipated. In terms of sales volume, the number of solds for the high end segment has increased by 20% for 2016 when compared to this same point in 2015. And 2015 enjoyed 20% more sales than 2014 for the same months measured. In short, we are very excited to see what happens when the election year fog clears.
A Glance of Insight
A glance of insight into why this market is a late year performer may be derived from an informal interview process performed by my partner Heather and myself. During August of 2015, Heather and I had six properties under contract, ranging in price from $980,000 to $1,850,000. All six properties closed successfully. All of these properties were our listings, and all had buyers from out of state. When we asked the buyers or their agents “why did you purchase now?” five of the six reported that they were freed up from their real estate commitments by other buyers who were moving ahead of the school year’s commencement.
We identified this as a sort of “shadow market,” that appears to have accounted for at least part of the 4th quarter surge in 2014 as well. Another insight we can share from experience as longtime occupiers of this work space is that these buyers tend to be more discretionary and will take a long, long time to pull the trigger.
And remember those feeder markets we were talking about earlier? About 70% of these buyers are from out of state. Of those out of state buyers, approximately 30% came from Chicago. We don’t believe this is indicative of a second home market. We are still a primary home market, functioning as a bedroom community to Denver for most of this segment.
More Reasons to Love the 4th Quarter
There are a few other reasons we love the fourth quarter. While sales volume does slow to some degree, inventory drops fast enough to actually improve the outcome for many sellers, depending on their location and price point. This effect is measurable enough to cause us to advise some listings to hold off on competing until local inventory is reduced.
Of course, life marches on, and so do job transfers, graduations, marriages, deaths and divorces – each one of these life circumstances contributing to demand. Life circumstance buyers tend not to be the tire kickers discretionary buyers can sometimes be. In fact, we’ve found that while showings sometimes slow down during the 4th quarter, and these homes can sometimes hang out on the market a bit longer, the exposure can be much more potent, with fewer showings required to get to the sale.
Even our marketing seems to be much more effective as our competition follows the bears into hibernation.
In short, there is no room in the fourth quarter to ease up. We are still up and at it, bright and early in the morning, with our wool real-estate socks on. And why wouldn’t we? We love our area and chosen professions.
The idea of a sales season and a pessimistic season for our area is quite frankly becoming dated. Our market is growing and remains quite active throughout the year. Should low inventories in Denver continue to push out of area Realtors up the hill in search of lifestyle and liveability, this data becomes even more important, as our local talent is the front line of defense against perception. Real Estate is local, and so are the best experts.
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“The Five Star Real Estate Agent Program is designed to identify and showcase real estate agents in a local market who score highest in overall satisfaction. Look for the results in the September edition of 5280 Magazine.
As part of an in-depth research process real estate agents are evaluated by consumers based on customer service, integrity, market knowledge, communication and negotiation skills, closing preparation, helping you find the right home, marketing the home being sold, and overall satisfaction.
10,000 to 50,000 recent homebuyers (all area residents who purchased a home over $100,000 – $200,000 within a 12-36 month period depending on the market size) are asked to name and evaluate real estate agents with whom they have had direct, personal experience with. Recent homebuyers can evaluate up to two agents. Both positive and negative responses regarding each agent are accepted. In addition to the survey results, other criteria such as acceptable disciplinary action is incorporated into the overall evaluation process.
The final list of Five Star Real Estate Agents includes the real estate agents, of those evaluated, in the local market that scored highest in overall satisfaction. This list represents less than 7% of the real estate agents in the local market.”
1. Do you require a potential listing broker who has the networking reach and technological expertise to best market your home? Yes, you should absolutely expect your broker to have great networking reach. Locally it is important that the broker’s phone rings often and with calls from other brokers to inquire about upcoming listings or inquiries asking “what’s new on the market?”. This happens with time in the industry, and importantly, generous actions and kindness given towards other industry professionals. We work often and well with brokers from outside of our firm, it just so happens that most top producers are in our firm. We are well respected within the industry for market and area knowledge demonstrated by our reports, news articles, inventory, pool of business and expertise that other brokers don’t have in their day to day real estate activities. Construction knowledge, horse property and marketing expertise are some of our stand outs. Negotiating contracts is another major reason our phone rings. Regionally networking may be even more important. 70 % of Front Range buyers come from out of town; they often switch areas of focus once looking in Colorado and have already built a relationship with other brokers. We are the go to for many in the industry being quick to answer our phones for them and appraisers as well. The results are sales leads that come from unexpected avenues on a regular basis. We also socialize, attend and present at companywide meetings and events within FSIR to ensure we constantly stay in front of the 200 + Realtors Fuller Sotheby’s has to offer. Nationally our brand and its management successfully cultivate an in-house referral and networking culture. This includes the tried and effective E-Gallery. All of this has been very useful and inspiring to us. We are very excited to be attending the 2013 Sotheby’s International Global Networking event this June. Technology,
This is one of today’s nonstarters if your broker’s not embracing it. If you’re reading this you’re probably reading a blog directed from a search engine or by print media. When Fuller Sotheby’s International Realty interviewed us we were honored but we also interviewed them. We needed a brokerage that could keep up with our technological acumen and needs and they exclusively have it in spades and continue to evolve. Web site syndication is probably our best example of technology working to market your home.
Heather Baird Graham and Sean Endsley have their own web site at www.PerformanceBrokerCO.com and have the ability to create a site exclusive to your property. In addition we push out to more than 200 sites including
Zillow.com, Trulia.com, James list,NYTimes.com & WSJ.com to name a few.
Sothebys.com averaging 630,000 visitors per month,
FullerSothebys.com averaging 15,000 visitors per month
Realtor.com is the highest real-estate website in the country. As showcase members we post additional photos, verbiage and virtual tours bringing your property to the top of search results pages guaranteeing an overall higher visibility when compared to other competing properties on the site.
2. Is your potential broker backed by a brokerage with the weight and credibility to offer the resources and accountability you deserve? Yes, our brokerage is arguably the most respected, well run and iconic brokerages in the land and you deserve this level of credibility. our brokerage is arguably the most respected, well run and iconic brokerages in the land and you deserve this level of credibility. The leadership at Sotheby’s International Realty and Fuller Sotheby’s International Realty are committed to providing the best possible exposure, representation and customer service our real-estate industry has to offer. Sotheby’s International Realty or SIR maintains over 611 offices around the world with FSIR or Fuller Sotheby’s International Realty being the fourth largest franchise. Our hands on and dedicated leader of the FSIR brand also owns additional offices in Utah and California. The requirements of the brand and the conviction of our local leadership, support staff and management ensure our customers and clients a brokerage available to aid us in supporting our clients. In a diverse and complicated industry we can say that we (Our team and our clients) can always reach deeper and then deeper still to take full advantage of the resources and people made available to us.
3. Are you looking for relentless representation only available from a full time broker or team? Yes, Heather Baird Graham and Sean Endsley work as a team so that we may be at two places at once on a regular basis. Between us we provide 7 day week coverage with someone constantly available to pick up a phone or respond to “time is of the essence” matters. It is also our goal to be present for the showing of our listings. With this level of commitment we can sell your home rather than merely placing it on the MLS and hoping for a bite. Real time on site representation gives you peace of mind and reduces seller’s fatigue. With our experience and background we are particularly adept at handling real estate issues as they arise, counseling clients when advice is required. Heather Graham-Baird 720 201 4187
Sean Endsley 303 895 4663
Try us, We pick up the phone
4. Would you feel proud to display your marketing collateral to friends and family? Yes, , our marketing material at the minimum exceeds the high Sotheby’s standard for signage, images, resolution, cardstock and verbiage required by our in-house marketing department to meet the consistency level Sotheby’s is known for. But we go further. We work with you to understand your home. We are experts at marketing property and you are the hands down expert of your home. We work with you as a team to learn what attracted you to your home in the first place. By understanding where the best window is, what you love about your home, what you will miss about your home, etc. We can build a marketing theme to best showcase your home.
5. Does your broker manage property inquiries well and to their fullest extent?
Yes, , we manage our leads well and to exhaustive efforts. Before your property is shown we visit with the buyer’s broker, we get a sense of who the buyer is and enter the data into our database and the “Showing Desk” database. We then communicate what we know to you. If a lead calls the FSIR office we have a full time concierge who manages the in house call center and is personally responsible to ensure all leads are documented in a professional manner and alerts us within 15 minutes of the phone call. This 12 hour a day, 7 days a week full time manager manages online inquires as well and tends to these leads with the same immediacy and care as he does the phone Center. Give Todd Webber a try, he’s very good. After that we make regular phone calls and emails to keep apprised of where those buyers are at regarding timelines or changing needs.
Odds are that we may even have leads for your property before we ever meet
6. Do you believe a picture is worth at least a thousand words?
Yes, this is perhaps one of the most important components we utilize when bringing your home to market. To bring the true feel of your home to a buyer we need the best available representation that grabs prospects by the collar and standout as the only ad on the page whether that page be a postcard, publication or on the internet. Buyers will be glossing over an untold number of images and it’s up to us to be in the right place at the right time with a wow factor. We also want prospects to have a full visual understanding of your home before they ever come out. We want quality showings. We have a significant tool box to achieve these results. To start Heather and or Sean will be present with the photographer to make sure we capture what is required by our high standards. Our exclusive partnership with Spotlight Home Tours and relationship with other videographers and photographers allow us to create high resolution images and virtual tours offering twilight and elevated photography as well to be presented online for those out of town prospective buyers in the form of website and links to fold in with other real-estate sites and our E- Gallery. E – Galleries are located in all SIR offices and our exclusive presence at Cherry Creek Mall, the largest tourist destination for the State of Colorado.
7. Do you desire expertise and customer service that are available to you consistently?
Yes, you should. Time spent wondering equals stress. We don’t think stress is good for you and we don’t want it for our friends and clients. We answer our phones and there are two of us. Even if we are elbow deep with something else we will get a response about our next availability ASAP. Try us and see what happens.
Sean Endsley (C) 303 895 4663, Heather Graham (C) 720 201 4187 or ask a friend if they’ve ever had to wait.
8. Could specific real time market knowledge be useful if used to your benefit? Yes, trust us on this one it does. The knowledge of real time market conditions and what your neighbor’s home sold for yesterday directly affects your decision process of whether or not to list your home, and if you’re already on the market, what strategic choices you may want to consider. We make it our job to stay current with transactions accruing in our market but here are some tools we use and can bring to you automatically.
Altos Research Report you can call, email or sign up on our site for a weekly report for your zip code regarding days on market, average price per square foot, median prices and trends by our unbiased third party consultant with your contact data safe and secure from others.
MLS real time data is fast by just clicking your MLS area for data and trends relevant to you from our site.
Sotheby’s Micro Report is yet another tool made available to us by Fuller Sotheby’s International Realty. This report is a great neighborhood by neighborhood shake down of what’s going on in your neighborhood or the one you may be considering.
CMA or Comparative Market Analysis is still the most customized and effective look at your home’s value when done by the right broker. Contact us to request one.
9. Is area expertise important to you? Yes, we have that for you. Community involvement and the daily showing of homes and land is a good start. Living here and studying market data helps a great deal also. But there is no substitute for growing up here, attending local schools and churches and cultivating relationships with land owners, developers and area governing authorities. Heather was born an Evergreen resident and we drink in our market with unparalleled thirst.
10. Do you expect a broker to have in-depth knowledge of negotiating variables and skills?
Yes, you most probably should. Over 95% of our accepted contracts move to fruition benefitting our sellers. This again comes from time and experience in the industry. The sheer number of successfully negotiated contracts for both buyers and sellers is invaluable. Heathers years of working in real-estate legal offices is another asset that there is no substitute for. The larger variable is we love this part of real-estate. We rush towards educational opportunities of this genre and read on the subject with enjoyment of every new piece of data or insight to be learned.
It is a common belief the Evergreen, Conifer and other communities in the
foothills have a defined “sales season”. I don’t believe this is the
case. For hard working Realtors and proactive sellers the dreaded winter months
can be and often are the best months. I know that for me and other top
producers in my office the fourth quarter is our most profitable. There are
many factors to understand to help buck conventional wisdom.
1) is the question; Do more properties sell in the spring vs. winter months. The
answer is no. The perception is yes because activity is higher in our warmer
months but the reality is that although showings decrease the buyers out there
are more serious with a greater sense of urgency.
My research is showing %28 sales in the 4th Quarter
2) is competition; Are there fewer homes on the market? Yes and the pattern is
very predictable. Please see chart below.
3) Savvy sellers; are seeing the trend and want to get ahead of the market as
the price per square foot is showing and obvious trend . Please see below.
conclusion I recommend taking advantage of the winter months. Showing volume
may be down but will result in less fatigue for the seller with predictably the
same result. At this point in history recovery does not seem to be racing
towards us like a speeding train. Below please find a “Summary”
example of our altos report.
Sotheby's International Realty ® is a registered trademark licensed to Sotheby's International Realty Affiliates LLC. Each office is independently owned and operated.
31955 Castle Court, Unit 1 South
Evergreen, CO, 80439