The Housing Market Has Split in Two. Which Side Is Your Home On?

Ask several people how the housing market is doing, and you’ll probably hear several different answers.

One seller may tell you homes are sitting longer and buyers are negotiating harder. Another may tell you desirable homes are selling quickly and sometimes receiving multiple offers.

Both can be true.

Today’s housing market is operating on two very different tracks, and much of the difference comes down to price point. Understanding which side of the market your home is on can affect everything from your asking price and marketing plan to how long it may take to receive an acceptable offer.

Higher-Priced Home Sales Are Picking Up

Mortgage rates and affordability are affecting buyers differently depending on the price range in which they are shopping.

Recent data from the National Association of Realtors shows a noticeable divide. Sales of homes priced under $250,000 declined by approximately 2% to 3% compared with the previous year. Meanwhile, sales of homes priced above $750,000 increased by double digits.

Why is this happening?

Higher mortgage rates and several years of home-price appreciation have made it difficult for many first-time and entry-level buyers to qualify for a home or comfortably manage the monthly payment. As a result, the number of buyers shopping in the lower price ranges has decreased.

Buyers purchasing move-up, custom and luxury homes are often in a different financial position. Many have substantial equity in their current homes, larger down payments, investment assets or the ability to pay cash. That makes them less sensitive to today’s mortgage rates.

This doesn’t mean lower-priced homes aren’t selling. They are. But affordability has reduced the number of qualified buyers available in some price ranges.

That makes pricing, preparation and marketing more important than ever.

A seller can no longer assume that simply putting a home on the market will bring several immediate offers. The home needs to be priced correctly from the beginning, presented beautifully online and in person, and marketed directly to the buyers most likely to purchase it.

Starting too high just to “see what happens” can be costly. Buyers may pass it by, the home can sit on the market, and the seller may eventually have to reduce the price. By then, buyers may already be wondering what is wrong with it.

Why Some Homes Sit While Others Sell Quickly

The time it takes to sell a home is also changing by price point.

Traditionally, luxury homes stayed on the market considerably longer than starter homes. Today, that gap has narrowed significantly.

Qualified buyers in the upper price ranges are moving quickly when they find a well-maintained, attractively presented and properly priced home.

That is especially important in communities such as Parker, Castle Rock, Franktown and the surrounding areas, where the differences between neighborhoods and individual properties can be substantial. A custom home on acreage, a luxury home with mountain views and a typical suburban home may all behave differently—even when they are located only a few miles apart.

Price point matters, but it isn’t the only consideration. Buyers also look closely at:

• Location and neighborhood

• Condition and updates

• Lot size and privacy

• Views and outdoor living areas

• Floorplan and finished square footage

• Quality of construction

• Comparable homes currently available

• Recent sales in the immediate area

A home that checks the right boxes and is priced realistically can attract strong interest. A similar home that is overpriced or poorly presented may sit.

What This Means if You’re Selling

If you’re selling an entry-level home, there is no reason to panic. Buyers are still looking, and homes are still selling. But affordability is a real concern, so buyers are being more selective.

Your home needs to demonstrate value from the moment it appears online. Professional photography, careful preparation, strong marketing and an accurate asking price can make a significant difference.

If you’re selling a move-up, custom or luxury home, you may be in a stronger position than you realize. Many buyers in those price ranges have considerable equity and are ready to move when the right property becomes available.

However, even luxury buyers expect value. They are willing to pay for the right home, but they are also well informed and unlikely to overpay for a property simply because it is beautiful.

There Isn’t Just One Parker Real Estate Market

National headlines can be misleading because there is no single housing market. Conditions can vary dramatically by state, city, neighborhood and price range.

That is certainly true here in Parker and throughout the southeast Denver metropolitan area. What is happening with homes in one Parker neighborhood may not reflect what is happening in The Timbers, Pradera, The Pinery, Stonegate or Canterberry Crossing.

Even within the same neighborhood, two homes can receive very different responses based on their condition, location, features and asking price.

Before listing your home, you need more than a general market report or an automated online estimate. You need a careful analysis of your home, its competition and the buyers shopping within its particular price range.

Bottom Line

The most important question isn’t simply, “How is the housing market?”

The better question is, “How is the market for a home like mine?”

Your home’s price point, condition, location and competition will determine which side of today’s divided market it falls on. Once we know that, we can create a pricing and marketing strategy designed to help you sell within your preferred timeframe and for the best possible price.

If you’re considering selling a home in Parker, Castle Rock, Franktown, Elizabeth, Highlands Ranch, Centennial or Aurora, contact Bob and Cheryl Bustin at the Parker Colorado Home Center. We’ll show you where your home fits in today’s market and give you an honest assessment of what it may take to get it sold.