COVID has had a devastating impact on may industries. However, the real estate industry is not one of them, quite the opposite. Housing prices have soured in the Longmont area but that doesn’t mean the work of a real estate agent was easy.
The real estate market in Boulder County in 2020 started off well. The year exceeded 2019 median sales prices for homes by an estimated $60,000 according to Zillow. As the pandemic hit Colorado in March 2020, all things ground to a halt, causing home prices to drop an average of $20,000 below 2019 numbers for a few months.
Since then the market has taken off and has yet to truly slow down.
In Longmont, the median home sales price has reached $570,000, according to Zillow. The median sales price is the middle figure of homes sold, according to Bankrate’s website.First American Title Insurance Company — which provides a more local view of real estate — indicates the median list price — the middle listed price for homes on the market — is currently set at $624,900, dropping from $695,469 almost two months ago.
Prices have climbed through the pandemic, primarily due to a lack of inventory. Currently, First Amercian Title Insurance Company indicates that only 117 homes are available for purchase. This has been a trend throughout the pandemic with the peak reaching 376 a year ago.
The lack of inventory, rising costs and COVID restrictions have challenged local real estate agents Damien Wise, with The Wise Team, and Chad Patterson, with eXp Realty, to think outside the box in order to keep business booming and still find the perfect home for their clients.
At the beginning of the pandemic, “we were worried about how much business we were going to do,” Wise said.
For Wise, the industry has always been about gauging the comfort level of clients, however, COVID has added a new dimension that has taken some time to get used to, he said. It is more important than before to understand the needs of the clients whether it be conducting business virtually or taking extra precautions when entering a home. Like other agents, Wise has become adept at conducting video tours of homes and connecting through virtual chats.
A big part of guaging the comfort of clients included simply calling people to answer questions and ease anxiety about the real estate market, Wise said.
In such a busy and sometimes out of reach market, Wise had buyers who quickly became frustrated after missing out on their dream home, more than once. These situations required Wise to help buyers reexamine their determination to buy and often look outside Longmont city limits — sometimes as far away as Johnstown or Milikin — to find something they might be happy with.
“Buyers just aren’t happy. There are a lot of buyers who ended up in rentals this year saying, ‘I just can’t compete,’” Wise said.
Patterson found a similar situation with buyers. In his experience, he witnessed buyers forgoing inspections and appraisals — both of which are encouraged to acquire before closing on a home — while offering tens of thousands of dollars over asking price with the hopes of snagging a home, he said.
“They had to understand what they were getting themselves into when they were interested in a house and wanted to go after it,” Patterson said.
Even when buyers found a home to purchase, often they would run into another problem. The seller for their home was in the same boat they were — looking to buy a home in a limited market — and were unsuccessful. This caused buyer to become landlords to the seller, on several occasions, Patterson said.
These factors changed the conversations Patterson would have with clients. He said he has always walked clients through the buying process but now has to ask if they are willing to be a landlord, forego an inspection or even waive the result of an inspection.
“If you are not, you are going to spend upwards of $660 to $800 for an inspection. You are going to spend that kind of money and its gone if you are not willing to move forward,” Patterson said. “The actual showing of the home becomes vital because you really have to take a look and make sure the home is in halfway decent condition before you even get the inspection.”
While buyers struggled, sellers had an easier time. Home prices exceeded seller’s expectations with multiple competitive offers. They were able to move “wherever they want to go,” Wise said indicating people could move to locations of their dreams.
According to Patterson, sellers were able to relax considerably since a home would garner multiple offers in the first weekend on the market and have less contingencies to navigate.
“They didn’t have to get the house into a great condition in order to get it sold. Usually (sellers) go through this entire process of staging … Sellers didn’t have to do that,” Patterson said adding even homes that did not present well or needed repairs still would garner top dollar.
Not being able to compete with the increased prices or mange repairs forced some buyer to pass on homes they fell in love with. Patterson highly encouraged, still does, buyers to stick to their monthly budget for housing, in order to not end up in a difficult financial situation in the future.
Both agents feel as though the market may be slowing down.
“I think we are starting to come out of it. We are starting to see buyer fatigue where we are getting more options … Buyers are coming in unwilling to just take anything just because there is nothing available. I think the market is starting to adjust. It is going to take some time,” Patterson said.
