Bidding wars were things one saw only in residential real estate transactions. They are never a good deal for purchasers, but sellers love them. We haven’t seen any sign of bidding wars since around 2008, and certainly not in the commercial sector, but it seems they are making a comeback.
Denver residents John and Mary Dunn have lived in the city for three years and wanted to put down roots. John, a communications director for a large firm had rented their three bedroomed small family home as part of a corporate rental since moving to the city, and now want to buy their own.
“We see rents going up more than property prices so wanted to jump before one overtook the other. We’re from Washington, so we’re used to cutthroat real estate, but we didn’t expect to see it here.” John offered in an interview last week.
“The first home we tried to buy, we were outbid in what turned into a bidding war. Nobody was more surprised than us. In a saturated market, getting into that kind of situation seemed like madness. We loved the property, but had to let it go in the end.”
The Denver corporate housing market has also seen this unfortunate situation too, which is all the more hard to believe when you’re talking millions of dollars instead of a couple of hundred thousand.
John’s employer has a block downtown that it lets to travelling staff and other businesses. When the block next door came up for sale, they thought it an opportunity too good to miss. Yet again, other bidders wanted in on the action and it came down to three bidders and a sale figure almost 20 percent over the asking price of the building. Anyone who says the corporate housing sector is dead needs to think again!
Fortunately, John’s employer has deeper pockets and secured the building.
Jon thinks the reason they were out-bid for the home on Raleigh Street, just south of the trendy West 32nd Avenue, is because it is such a nice neighborhood. Schools are nearby, the streets are reasonably safe and it’s a prime location to live.
“We were upset by the situation but had to look at it rationally. We, like everyone else, buy with our hearts but in the end the head has to take over and bring some rationality into the situation.
The one change we have seen in the Denver real estate market is low bids. Some of the bidding wars are still being held under the asking price of the property. Some bidders are also folding early, something they never used to do.
The dearth of great properties available in Denver makes it relatively easy to find something just as good for less money. Something John and Mary found out once they had recovered from their previous experience.
“We ended up buying in Highland, a lovely house in a lovely area and just what we wanted. In the end, the other bidder did us a favor. They showed us that the real estate market in Denver is still cutthroat, whether that’s for corporate rentals or private sales and we have to use our heads more than our hearts.”
