I happen to live in Denver’s Driving Park Historic District, which encompasses all houses north of 4th, south of 6th between Downing and High. We moved into a 1400 sf Victorian in 1999 for way more than we wanted to spend, and struggled for at least 2 years wondering how we would spend the remaining $14.32 that we didn’t plop down on our mortgage payment every month. Eventually, our income caught up to our house, and now we can go to the movies together, as opposed to taking turns.
One of the nice things about living in Driving Park and near Denver’s Country Club neighborhood is that we’ve remained relatively bubble-proof, although for reasons different than most neighborhoods.
At first glance, it appears that our section of central Denver is not unlike the rest of the metro area. Currently, there are 47 homes on the market; 31 of these are currently listed for more than $700k. And, when you consider that only 6 houses are under contract and 14 homes have sold in the past 6 months, that amount of inventory seems even more daunting.
Yes, there are homes that have been on the market for more than a year and there’s a large handful of homes that have near or below the seller’s original purchase price (yes, even in Country Club do sellers take it in the gut). But, as I said before, these statistics are not only misleading, but they can provide everyone with valuable lessons about homeownership and how to prepare for selling.
For example, only 3 of the homes sold or are about to close this year are under $700k and several homes above $2million (!) have sold well below the average days on market (DOM). (To get an idea of how the Denver market is performing in general, read my respected colleague Gayle Glucksman’s entry in the Realty Times about market saturation.)
But how does this help you? Read on. Once you know the rules of selling a house in Country Club and apply those rules to sellling your own home, you will realize that or your neighborhood, the numbers begin to make perfect sense.
THE RULES OF SELLING IN THE CCHD
IMHO, many Country Club Historic District homeowners - broadly, everyone north of 1st Ave, south of 4th between Downing and University (it’s slightly more detailed than that on the east side of the neighborhood, but anyway) – do not see their homes as their primary investment. In order to buy a home, you have to be able afford it, but, more importantly, you have to be able to update and maintain it. This rule increases 4-5x with $1M+ homes.
Like you and I, CCHD homeowners develop a strong emotional attachment to their home, but unlike you and I, they aren’t “house poor” like many people were or are. The result is that there is less emotion and more strategy when it comes to pricing their house. Specifically, two distinct strategies:
- PLAN A: when you live in a great neighborhood and there is no pressure to leave, you can move on your terms. What ends up happening is that many sellers will price their house according to optimal market conditions (FYI: currently we’re not living in “optimal market conditions.”) and let the market come to them. But not all of it! Most Country Club homeowners don’t – and shouldn’t – allow unqualified buyers to tour their homes, thus filtering the number of “tourists” from coming through their houses. Depending on motivation, there are times when houses north of $3 million will stay on the market for more than 2 years!
- PLAN B: There are times, however, when job, family or some other circumstance will change the motivation of a homeowner. When you lose control of your situation, Country Club homeowners are just like any other homeowner. More often than not, buyers can take advantage of sellers that relist their house within a couple of years of moving in - especially in this market – or sellers who failed to upgrade a house hoping that the great bones and great block would keep it up with the competition. Regardless of where you live, if your house doesn’t show well because you failed to update or (gasp) your taste isn’t as mainstream as the next house, you can almost see the calculator in a buyer’s head deducting huge chunks off your list price. Don’t get me wrong, there isn’t one homeowner on the planet who is going to be happy about taking a loss on their home, but it’s not a coincidence that successful people often possess a healthy mix of reality, proactivity and a desire to move forward with their lives. And it’s no coincidence that many people that live in Country Club and Driving Park have already found success or are well on their way.
HEY, I DON’T LIVE IN COUNTRY CLUB
Regardless of your neighborhood, you as a homeowner have several options on how to market your property when you need to sell. If you’re electing to move, you can certainly choose Plan A, but eventually you’re going to have be honest with yourself about whether you’re seeing what your house is really worth in this market or if you really want a change of scenery. This market is very quick to respond to your opinion of your house’s worth, so if there’s part of you that thinks you’re not going to get what you want, you may reconsider listing your house (that’s another post altogether). Plan B is never the optimal alternative, but it reflects reality, and as many people are wont to admit, life ain’t fair. The best way to ease the pain of B, especially in this market, is to make a run at a price you’d like to get but be ready to accept what a buyer will bring you.
THEN THERE’S PLAN C
There is Plan C, which I find to be the optimal route for selling a house, but it also forces you to resist the urge to procrastinate and – yuk – do some work around the house.
- PLAN C: I have clients that will contact me in March/April, letting me know that they’d like to be in a new house by September. While that conversation is nothing new, these clients are prepared to make it happen. They’ll expect me to come by the house and consult with them on what needs to be done to the house in order to have it sold in 4 months.
Sound impossible? Not at all. (Maybe, if they need to gut their kitchen. But if these people are calling 6 months ahead of time, they’ve already made significant updates to their house.) They also recognize that the ultimate goal is to be in a new house, not trying to squeeze every nickel they can out of their current home. These people have either made a profit on their house and won’t led greed disrupt their lives, or their life change is more important than an extra 1-2% of sales price (now that’s another post for another day!) in a bad market. In either case, they’re moving forward with their lives.
What’s my role in moving them forward? To bring as many buyers as possible to the house, present as much feedback as possible, and give the seller the opportunity to react to the market’s criticisms.
Remember, most of us don’t live in the Country Club, but with a little planning, we can be just as savvy when it comes to selling our houses. And when you’re ready, be sure to visit me to get a little more insight as to why I can get you in the driver’s seat.