Realtor: Best year ever for selling a home

Highlights:

  • Guest column by Dan Polimino.
  • More new homes being built.
  • 2014 could be the peak for prices

 Have you heard of the saying buy low and sell high?

Dan Polimino

Dan Polimino

Whether you are investing in the stock market or you are buying real estate, everyone would love to buy low and sell high.

I don’t know how many times over the last five years have I heard people say, “If I only knew the real estate bubble was going to be 2006, then I would have sold at the peak of the market.

Of course you would…everyone would, but the challenge is knowing when and how to time the market.

Many people over the years have professed to me their ability to time the market. It’s pretty difficult to do, but today there are even more economic indicators than ever before.

One of the best leading indicators in real estate is new housing starts.

In 2006, new housing starts totaled 1.9 million across the U.S. That was the all-time high.

In 2013, the total new housing starts hit 1.6 million. That’s only 300,000 off the all–time high. Give builders another 12 to 18 months and they will eclipse the 1.9 million record and will be pushing into 2 million new housing starts.

What does that mean for housing prices?

It’s as easy as understanding the law of supply and demand.

If builders catch up and start flooding the market with new home inventory, everyone’s prices will either dip or at least level off for the near future.

Buyers will have more choices from builder inventory and as a result will slow home value growth.

Besides, we have been down this road once before.

It’s not realistic to think that the Denver market will be able to sustain a 10 percent growth year after year.

That’s why we are telling all of our clients that 2014 will be the peak year for home values in Denver.

I always reserve the right to be wrong, but this time, there are just too many economic indicators to validate the information above and be a windfall year for sellers.

Dan Polimino is an Owner/Broker with the Colorado Dream House Team, Keller Williams Realty DTC. Contact Dan dan@coloradodreamhouse.com, codreamhouse.com or coloradodreamhouse.com.

Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

 

 

 

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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Comments

    • Dave,

      You are right to question this. Realtors always have a motivation to say “sell now”.

      In most Denver neighborhoods have only just reached their 2006 price levels. A typical real estate cycle will be 5-10 years of appreciation beyond the previous peak.

      Another flaw in this argument is that most of the local new housing starts are in Erie, Frederick, East Aurora, etc. These days, a much lower percentage of the population wants to be that far out there.

  1. Most of the gains in new home starts are multi family. New SFH sales are still very low in historical measure. I too, have no idea what you are trying to convey.

    • One other question. If this is the best year ever to sell a house, doesn’t that mean this would be the worst year ever to buy a house?

  2. LOL, comparing the national building statistics to the local housing market reveals a complete misunderstanding of how the market works.

    • Dave, this is different. Here you have a Realtor inferring it’s a very bad time to buy. He starts the whole convoluted piece on the stock market “buy low/sell high” analogy. The best day to sell Apple stock at $700 happens to also be the worst day to buy Apple stock.

  3. While 2014 may be a good year to sell, it certainly won’t be the best. The cycle will not end until prices have doubled from their previous peak prices, as has happened with every other cycle going back 100 years.

  4. I agree with the numbers DaveB linked to. Currently the level of new SFR starts is less than half of that of 2006, both Nationally and statewide.

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