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Panic buyers driving home prices up in metro Denver real estate market

Despite record unemployment, home prices soar
Posted at 6:09 PM, Aug 27, 2020
and last updated 2020-08-27 21:53:03-04

DENVER -- Despite huge job losses related to the coronavirus pandemic, the real estate market in Colorado is bucking most economic trends at the moment.

Kelsey Abbey is scrambling to get her home in Commerce City on the market this weekend.

“We need to sell it,” Kelsey said.

That’s because she just bought a larger house in Arvada.

“It’s in my favorite area of town in Arvada and it’s twice the size of my current house,” she said. “There’s two of us living here. It’s 700 square feet. We have no space. I work from home and basically don’t have an office.”

Kelsey is a self-described panic buyer, a term for Colorado real estate buyers who fear scarcity economics and the looming possibility of another pandemic-related shutdown this coming winter.

“During the time when everybody was trapped at home, they realized they need a little bit more space,” said realtor Lori Abbey with The Abbey Collection real estate group.

Despite record unemployment, home sales are outpacing last summer and bidding wars are still commonplace.

“I’m literally getting a text message every second,” Lori Abbey said.

Kelsey’s new house in Arvada was listed at $375,000, but they offered more and won.

“We ended up bidding it up to $387,000,” Kelsey said.

According to the Colorado Association of Realtors, closings this past July were up 23% over the same time last year, while inventory was down 14% and home prices were up 3.5%.

Experts say instability near downtown with homeless encampments and ongoing unrest is driving people out.

“I’m seeing a lot of people moving out of the city and into the suburbs where they can see 3,000 to 4,000 more square feet in their lawn and a couple thousand more square feet in their house,” Abbey said.

Buyers are also capitalizing on low interest rates. Abbey’s tips: Get pre-approved, expect to offer over ask and be ready to move quickly.

“You have to hustle,” she said. “If something comes on that day, you likely have to see it that day.”

Kelsey sees her new house as a perfect pandemic purchase.

“It has a really good outdoor space,” she said. “It’s pretty much everything we need to not have to go anywhere.”