DENVER — We know the housing market in the Denver metro area has been scorching hot for a few years now, but now, buyer frustrations are at a tipping point just as spring buying season kicks into gear.
Denver7 went 360 on the topic back in February, but the problem is now compounded by supply costs that are out of control for new builds.
"We have seen an increase of three to four times on some products," said Rick Lambert with builder McStain Neighborhoods. "We're seeing costs related to lumber go up thousands of dollars on each house every month. It's really been a struggle for us."
Those very costs are being passed on to the buyer and it looks like that trend will continue into late 2021 or early 2022.
"That's not driven by us filling our pockets," Lambert explained. "It's really due to cost inputs increasing so dramatically over the past few months."
The cost of supplies are just another obstacle in the age-old dilemma of supply and demand.
"It's insane. It's just insane," appraiser Jamie Steiner told Denver7.
She said she will still do the job she's tasked to do: evaluating a home and determining what it is really worth.
"I think appraisers are doing the right thing," Steiner said. "They're appraising a home for what the market value is."
That doesn't seem to matter anymore. Buyers are so desperate that guaranteeing the appraisal is becoming common practice.
"Essentially they (the buyers) are saying they are willing to pay $500,000. Even if the house appraises at $450,000 the buyer is still guaranteeing the $500,000 bid," said realtor Jessica Lentz.
She said she has buyers who have just recently been priced out of the market.
"Back in February, we were looking at homes for $425,000. Now those homes are going for a minimum $475,000. My clients have now been priced out and are being forced to rent again," Lentz said. "They're not even frustrated anymore. They're just sad."
Home inventory tumbled 28% in March, compared to the same time last year. With interest rates still low, people are still eager to buy. With building supplies still hard to come by, houses are going up slower. The ones that are for sale, new or used, are swallowed up faster than ever.
"Now we're just in a completely different bracket than we've ever been," said Lentz.
First-time home buyers are particularly struggling. They don't have equity from the sale of a previous home to be able to buy high. Many simply can't compete in a buzzing market that isn't expected to cool anytime soon.