This home is a great example of market timing creating high sales price, though it did sell for under asking it did sell for quite a bit more than I had estimated (http://zavvie.com/post/7161) I will admit I was off on my estimate for the sales price. I believe his particular home was purchased at a relatively high price, for a home that needs a lot of work and lacks a garage, for its future potential. Though it was purchased as an owner occupied home I believe the owners will eventually flip the property in the future and possibly work on it as they live in the home. The home has the potential to be worth nearly a million dollars if the proper high end upgrades/updates are done, the basement is fully finished and modernized, interior access to the basement is added and at least a 2 car garage is added to the property. This home could also keep the separate entrance to the basement and be used as a rental for two different tenants, thus increasing monthly cash flow.
Another factor that drove this sale was lack of inventory, May saw this lowest inventory of homes in the last 31 years at roughly one third of the average inventory for the Month of May(16,981 from 1985-2015) in the Denver Metro area. As a reference point in 2006 there were six times the inventory in the month of May compared to 2016(30,457 vs 5,463), another reason we are not anywhere close to a bubble. 2006 saw some of the, if not the highest prices in real estate history for the Denver Metro area and in most areas were just now getting back to those prices. Market timing at its best!
Please let me know if you would like more information on this house or more statistics regarding the statistical information mentioned above.
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