How High Are Bidding Wars Pushing Up Home Prices?
This is a reprise of my article on April 22nd, when I took a snapshot of closed listings on Friday, April 16th. This week I did the same analysis, and the day I chose was last Thursday, May 13th, to see how the bidding wars have evolved in just the last four weeks. The source both times was REcolorado.com, Denver’s MLS.
As I did in April, I limited my analysis to sales within a 15-mile radius of downtown Denver. That takes in an area from Broomfield to Highlands Ranch and from Golden to Aurora. It does not include the City of Boulder.
I limited my search to homes, condos and townhouses that were on the MLS at least one day and not more than 6 days before going under contract. Those are the homes with bidding wars. I divided the results into homes which sold up to $500,000 and those that sold for more.
On May 13th there were 44 closings up to $500,000. The median home sold for 8.4% over its asking price. On April 16th, there were 48 closings, but the median home sold for “only” 4.7% over its asking price. The highest ratio this time was 15.7% for a home in southwest Denver that sold in 4 days.
There were 56 homes that closed on May 13th for more than $500,000. The median home in that group sold for 8.1% over its listing price. On April 16th there were 68 such closings, and the median home sold for 8.3% over asking price, so little change there, but the highest overbid in this group on May 13th was 29.4% over listing for an $850,000 home in Littleton’s Sundown Ridge, which sold in 2 days for $1.1 million. On April 16th, the highest overbid was “only” 18.8% over asking price for a home in Westminster. On May 13th, there were four homes with an overbid higher than that.
To have a statistically significant number of closings over $1 million, I analyzed the closings over a longer period — May 1-15. The median closing for those high-end homes was 6% over listing price. The highest was for a 1991 home in Denver’s Hyde Park at Polo Club subdivision, which was listed at $1,575,000 and sold in 6 days for $2,225,000, 41.3% over listing price. In the first half of April, there were only 68 closings over $1 million, and the highest overbid was 24.9% over listing price. This time there were six closings with an overbid higher than that.
In my April analysis I predicted that the overbids would get even more intense, and that has proven to be the case. I’ll keep up this analysis in coming months. Stay tuned.