Friday, June 26, 2009

Denver Named One of the Best Places to Buy a Home.Now!

 

Forbes Magazine released this week its “In Depth: Best Cities to Buy a Home” feature in which the magazine highlights cities with the best real estate deals. Click here to access the article: http://www.forbes.com/2009/06/22/cities-deals-home-lifestyle-real-estate-home-buying.html. Among other large cities, Denver was listed with the magazine noting that “While the majority of the nation’s housing markets are still working toward a bottom, some cities are boasting fundamentals that make them good places to buy a home now.” In addition to Denver, Los Angeles, Boston, Phoenix and San Diego were listed.

To determine which cities feature the best real estate deals, the magazine “looked at three sets of data in the March 2009 RPX Monthly Housing Market Report, distributed by Radar Logic Incorporated, a New York-based derivatives firm. It looks at the market fundamentals in the country’s 25 most populated metropolitan statistical areas (MSAs or metros), geographic entities defined by the U.S. Office of Management and Budget used by federal agencies in collecting, tabulating and publishing federal statistics. First, we examined the number of ZIP codes with 25% of the area's sales to determine those in which activity is most evenly distributed. Next, we examined increase and decrease in price per square footage to determine where market value is the highest. Last, we looked at transaction rates in each city to determine where the housing markets are most active. We scored each city by category, and then combined the scores to determine the final ranking.”

Here’s what the article reported:

“1. Denver, Colo.
PPSF Increase or Decrease
March 2009 vs. Feb. 2009: 5.7%
Transaction Increase or Decrease
March 2009 vs. March 2008: -8.4%
Percentage of ZIP Codes with 25% of Sales: 25%”

Also this week, the National Association of Realtors released its existing home sales report which noted that existing home sales rose for the second straight month in May, signaling low prices and incentives are attracting buyers.

NAR says existing home sales, including single family homes, condos and coops rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.

Sales of existing homes rose for the second straight month in May, signaling low prices and incentives are attracting buyers.
NAR chief economist Lawrence Yun had this to say, “Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. First time buyers are also being drawn off the sidelines by the $8,000 tax credit which is helping to absorb inventory.”

The numbers could be even better if it weren’t for poor appraisals. While pending sales of existing homes—those with signed contracts but not closed—indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.

Locally we made some great headlines this week, especially with the Denver Business Journal’s story headlined “Home prices in mountain states up 1.3% outpacing nation.”

The article reported, “Housing prices in Colorado and other mountain states rose 1.3 percent in April from the previous month, the biggest increase of any region of the nation, the Federal Housing Finance Agency reported Tuesday.”

And with that great news in tow, let’s take a look at this week in real estate:

  • Boulder/Longmont—The Boulder/Broomfield county markets continue to show a drop in new listings, with numbers down about 20% from the week before. Sales, however have shown a slight increase this week, about 2%. A quick check of price reductions in the area show 572 so far this month in Broomfield and Boulder counties! Expired listings only totaled 47 and that includes the last day of May. Great new stats for our side: If you sold a house under $750,000 with CBRB in Boulder county this year compared to the rest of the MLS, you averaged 13 fewer days before contract and $7989 more in your pocket! Our Longmont office reports buyers seem to be confused these days. Some are waiting for interest rates to drop and some are waiting for prices to drop. News that the housing market is local seems to be getting out but it might be adding to the overall confusion in the market. First time buyers are the main thrust of our sales. We have had some higher priced homes sell but homes under $250,000 are still selling fast. Now is a great time to get into the investor market. Investors are not looking to "flip" the homes but are looking for the longer term. The rental market is strong in Longmont. Summer weather has finally arrived, making it pleasant to show homes in the evenings.
  • Evergreen/Conifer—Our Evergreen office reported we had a total of five new listings for the week. Seven listings went under contract and one buyer went under contract. There was one multiple offer situation for a $208,000 SFH in Wheat Ridge. One listing went under contract in five days after only two showings, a $425,000 SFH in Evergreen. We had a total of 81 showings during the week which is close to normal level for peak season. The majority of activity occurred in three different price points, $200,000 to $250,000 (mostly first time buyers and investors), $300,000 to $350,000 and some recent strong activity in the $500,000 to $750,000 range. Our Conifer office reports we had four listings go under contract during the week, one of which was a bank REO. One buyer went under contract during the week. There were a total of 42 showings for the week and activity continues to improve.
  • Denver Central—Housing inventory continues to drop in the Denver area and for the fourth consecutive month homes sold in the metro area went for less than $200,000 and 28% were in the $200,000 to $300,000 range with those under $200,00 selling very quickly.
  • Devonshire—Showings have been very consistent this week. There is a definite feeling of increased activity and lots of contracts being written and accepted. Appraisal issues are still rampant, with multiple appraisals being asked for at the last minute before closing. We are advising Agents to write contracts with 45 day closings where possible to allow for a smooth transaction. Buyers are excited to get into their new homes and open houses are busy in many areas. Activity may slow down a bit with the 4th of July upon us.
  • Douglas County—Our Southwest Metro office reports we had another week of great showings. Father's Day was our only slow day. We had six properties with multiple contracts and our Agents are finding they are competing with multiple offers on properties they are writing on for their buyers. Open houses were slow this past weekend however floor was very good. Two Agents picked up buyers from their floor calls. We are still seeing very good activity on homes priced under $350,000. We have lots of buyers wanting to take advantage of the $8000.00 tax credit and I believe that the interest rates going up has also helped get buyers off the fence.
  • El Paso County—No information reported.
  • Larimer County—Our Fort Collins/Loveland office reports things are looking good in the Northern Colorado real estate market. We are seeing homes moving pretty quickly that are priced at market and multiple offers on short sale and bank owned properties that are priced 5-10% below market. Summer began on Sunday and inventory has increased this week as the summer selling season starts to collect steam. First time home buyers are still the primary home shoppers in the market and are gobbling up the lower priced inventory in search of the American dream. Appraisals are still an issue as Agents, lenders and appraisers learn to work together within the confines of the HVCC. It is still an amazing time to buy and interest rates are still near the lowest they've been in the last 50 years.
  • North Metro—Activity abounds in the North Metro area. We have put 53 homes on the market this month so far. Average days on market is less than 60 when the property is well priced. The average sales price is around $273,000. The upper end market (million plus) continues to show slow movement unless the home is located in a new build subdivision. Numerous floor calls are coming into the office on our listings and appointments from these calls are increasing. We're beginning to experience buyer calls on floor looking for homes in the $600,000+ range. Relocation buyers are also abundant & increasing in our area. We continue to see a lot of short sale situations.
  • Parker—After two very busy weeks, activity has slowed down slightly. The listing inventory specifically in the lower to mid price range keeps decreasing steadily which indicates that the trend for declining values could reverse soon. The upper end market (above $600,000) is still very slow and it will take a while to recover. Agents are very busy staying in touch and keeping clients informed about current market conditions while their business is up year over year!
  • Southeast Metro—Traffic continues to increase at our listings. Multiple offer situations are almost a guaranteed with properties priced below $250,000. Luxury properties are also seeing increased traffic and we currently have nine luxury homes under contract. Our success story of the week: One of our Agents had a listing for three years that went under contract and closed in June!
  • West Lakewood—Numerous sales are having appraisal problems. Closed short sales and bank owned properties are affecting the appraised prices. We are seeing increased activity in the above $400,000 price range.

One potential challenge that may begin affecting our market is the rise in interest rates. I came across this CNNMoney.com article which explains why interest rates are on the rise: http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm. At this point, what we are seeing is the recent uptick is causing many fence sitting buyers to get off the fence and get in the market and in all likelihood that is a very good idea. We probably won’t see interest rates as low as they have been for at least another 20-30 years.

I also recently sat down with our friends at Coldwell Banker Mortgage to discuss interest rates, the future and what we can expect and based on that conversation, I will be focusing my July edition of Reality Check on this very subject.

Watch for it after the 4th of July holiday.

Until then, make it a great week.

Chris Mygatt
Coldwell Banker Residential Brokerage Colorado

Friday, May 1, 2009

"The End is Near"

Well last week I told you the week would bring some interesting twists to the market.  And I was right.  New mortgage applications for home purchases and refinancing were up 77 percent from the same week in April 2008. 

 

Mortgage rates continue to average well below 5 percent – 4.7 percent last week on average for 30-year fixed rate loans and 4.5 percent for 15 year loans.  Rates like these are a major factor pushing applications.

 

Nearly 600,000 home buyers have already claimed either the $7,500 tax credit from last year or the $8,000 credit for this year, according to IRS data cited by the National Association of Home Builders.

 

Also of interest, new home sales have been showing signs of improvement.  Last week the Commerce Department reported that March sales were off just 0.6 percent, exceeding analysts’ expectations, after climbing in February.

 

In other positive trends, interestingly enough, The Wall Street Journal reported this week, “Analysts say: The end (of declines) is near. While new home sales show signs of stabilizing as builders cut back on building and boom-bloated inventories are slowly absorbed, prices of both new and existing homes are still being dragged down by a flood of foreclosures. Still, the experts were optimistic that the federal government's efforts to stem foreclosures eventually will have an effect by the end of this year or early next year; Mark Zandi, chief economist of Moody's Economy.com, even ventured (jokingly) a date when home prices would stop falling—December 15, 2009.”

 

It’s hard to know whether or not the sum of these indicators is equivalent to a recovery but my sense is that the end is near—if we haven’t already passed it here in Colorado (some experts are even saying that we’ve already hit bottom and we’re in slow recovery mode).  When the bottom has hit exactly is hard to predict but based on what I am seeing in our offices, based on the statistics that I am seeing on pendings and buyer interest/activity and based on the overall national recovery effort, it seems the prediction by many experts (in late 2008) that we would hit bottom by the middle of 2009 is probably not far off. 

 

Now for those of you who are “timing” the market, I have to caution you on this.  The only way you know that the market has hit bottom is when it is on its way up.  While certainly housing is one of the biggest and most important investments we will make in our lifetime, it is also important to remember that our home is so much more than an investment.  It is where we raise our family, where we create memories and where we plant our roots.  So as you try to “time” the market, remember these key facts and make sure that beyond the investment, you are choosing a home that will bring you the happiness you deserve.  Because in the end, that is what matters most.  Choose the home that is right for you and your family right now and for years to come.  Historically speaking, Colorado real estate brings long-term investment gains for almost all homeowners so if you choose the home that is right for you, you almost can’t loose.

 

Now, let’s take a look at this week in real estate:

 

  • Boulder/Longmont—Our Boulder office reports that new listings were up about 10% last week as Spring approaches.  Despite a fair amount of bad weather, sales and showings stayed pretty level.  More Agents are reporting frustration with getting deals closed, largely due to wildly different methods of handling short sales from one company to another as well as problems with appraisals.  The Longmont office reports this is the second week in a row that our showing activity is up.  We are up 15% week over week.  Our homes "under contract" are up as well as our listings taken.  We have more buyers looking at new builds and writing contracts on current builder inventory new home starts.  Short sales and foreclosures are still impacting the values of local neighborhoods.  Appraisals are continuing to be a stumbling block for some sales. It really is an area where the local Realtor can assist.  One of the Agents here today commented that "I am rocking and rolling" with new business.  It feels good!
  • Evergreen/Conifer—We had a total of six new listings for the week.  Six of our listings went under contract including one priced at $1,300,000.  There were 74 showings for the week which was back to the normal level following a decline the prior two weeks due to bad weather and our office being closed for three days.
  • Denver Central We are seeing an increase in under contracts as of late.  We continue to see drops in inventory.
  • Devonshire—This week we have seen a decrease in showing activity which is quite a seasonal anomaly.  On the other hand, we are seeing lots of offers being written and actually accepted.  It seems that this week buyers have seen what is on the market and are now at the decision making stage.  With May here, we are still projecting a strong month and a good summer.
  • Southwest Metro —Our Southwest Metro office reports that showings were the best yet for 2009 so far.  Friday-Sunday we had 175 showings.  Agents are very busy with buyers and have had numerous calls regarding the $8,000 credit.  We definitely see signs that buyers are starting to seriously look and make offers on properties.  We had several listings that went under contract in less than a week with one on the same day.  Our mortgage rep continues to be very busy with loan applications.  Sellers are calling, wanting to list their homes.
  • El Paso County—No information reported.
  • Larimer County—Our Fort Collins/Loveland office reports that showing activity continues to increase in our market and we had the best week yet with property showings increasing by nearly one hundred showings.  We are seeing many first time home buyers coming into the market to take advantage of the $8,000 tax credit.  These first time buyers are buying power priced homes in the low to mid $200,000 price range.  We had a solid number of homes go under contract last week. In fact, it was the most for a one week time period this year.  However, no multiple offers were reported.  If your property is in a good location, clean, well priced and under $300,000 there is a good chance it will sell in this tough market.
  • North Metro—The average price range under contract is around $250,000.  Sales to list price is 98% to 100%.  Days on market decreased to around 85 days.  We've seen multiple offer situations on homes this week when the listing is power priced.  Open house activity has increased as have the number of floor and sign calls.  We continue to have the challenge of getting appraisers out quickly & loans out of underwriting in time for closing.  We're working with many sellers.
  • Parker, Douglas and Elbert Counties —Our Parker office reports: another record week for showings!  Once again, sales activity increased last week.  We received multiple offers on several power priced listings including eight offers on a bank owned property and three offers on a $1,300,000 listing.  The inventory in our marketplace is steady.  Depending on the price range however, we see a huge difference in the amortization rate from less than two months in the lowest to over three years in the upper range.  In the million dollar plus market, it is necessary to position listings way below the competition in order to create activity.
  • Southeast Metro—We set 700 showings last week!  Open houses traffic continues to increase as buyers are ready to make a move.  We have put under contract 139 properties just this month!  Homes in the high energy areas of the city are seeing a significant decrease in the average days on market.  However, outer areas in the price point above $400,000 are still a bit sluggish.
  • West Lakewood If you have a buyer wanting to purchase a bank owned property, they most likely will need to offer a substantial amount over the list price.  We've had buyers offer $15,000 over list price and still not be the highest offer. One West Agent went under contract with a buyer for $800,000 a possible indicator that there may be some movement in this price range.  Two $500,000 homes were placed under contract this week, again a possible indicator that there may be movement in this price range as well.  Showings at all price ranges have increased.

 

No matter how cynical you are about today’s economy—and trust me, with as much as we’ve all been through over the last few years, I certainly understand—it’s important to point out the positive signs that we are seeing in the local marketplace.  All signs are definitely pointing towards a recovery. 

 

Next week I will release my May Reality Check message and I will focus it on why today’s market brings such prime opportunities for savvy investors.  I hope you will check it out.

 

by Chris Mygatt

 

Posted by Brian L. Thomas

http://www.southofdenver.com

Friday, April 24, 2009

First Time Home Buyers Are Finally Fueling the Come Back!

It’s finally happening! In my August 2008 Reality Check message I discussed our market’s need for the revival of the first-time home buyer. Because, as we know, first time home buyers are a critical force that will help jump start our market rebound, creating that important domino effect that will ultimately benefit all price points.

Confused? Just think about it. If first time home buyers purchase entry level homes, that allows the entry-level homeowners to sell and move-up to a mid-level, move-up market. By purchasing those homes, the move-up market is able to sell and ultimately purchase homes in the luxury arena. It’s a much-needed domino effect that could catapult our market’s rebound.

Well I talked about it eight months ago but at least you can’t accuse me of being a day late and a dollar short. I guess in this case I was a day (or eight months) early and, as my wife would say, still a dollar short. But it’s finally happening and numbers released over the last two weeks are certainly proving that.

First, let’s look at NAR’s release this week of its March existing home sales. Now of course some media did use the nationwide decrease in sales as an opportunity to take a negative spin but there were a lot of positives in this news. First, nationally, prices rose from February to March by 4.2 percent which is much higher than the typical 1.8 percent seasonal increase between those two months.

Second, housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale which represents a 9.8 month supply at the current sales pace.

In the West, existing home sales declined 4.2 percent to an annual rate of 1.13 million in March but, and this is a big but people, are 18.9 percent higher than last year at this time.

Now what do all of these numbers mean? Well the fact is, the share of lower priced home sales have trended up, indicating a return of many first-time buyers. Sales in the upper price ranges remain stalled but there are two reasons for this. First, jumbo loans still are difficult to obtain right now—though that may change in the second and third quarters thanks to the government’s work to restore this—and second, now that first time home buyers are once again entering the market, it will take some time for the domino effect to take shape onto other price ranges.

Another interesting note, the Mortgage Bankers Association this week released its Weekly Mortgage Applications Survey for the week ending April 17. The index showed an increase of 5.3 percent from the previous week and that was a 76.9 percent increase compared with the same week a year ago. Yes, 76.9, that’s not a typo.

Whatever you think about what our government is doing to revive our economy, it seems some of the early work like the first time home buyer tax credit is working. Earlier this week Inman News reported that the preliminary numbers from the IRS suggest 1.4 million taxpayers will claim the federal first-time home buyer tax credit on their 2008 tax returns, meaning the program is likely to meet or exceed the 2 million target set by lawmakers before it ends November 30, 2009.

Finally and I think this is probably most notable, the Wall Street Journal reported this week that prices have fallen back into line with what the typical household can afford to pay in most of the U.S. The report showed that home prices are dubbed “fairly” valued in 202 of the 330 markets studied. That means the average price level is within a band 14% above or below the historical norm. Twenty-one markets are “overvalued” or between 14% and 34% above the norm. And 106 markets are considered “undervalued” or more than 14% below the norm. Take a look at this graph which showcases where we were in the early part of the decade as compared to today:



Now I know some of you are scratching your heads and saying, how is the drop in property value a positive thing. But the fact is that though the ride was nice in the big real estate boom of the early 2000s, we couldn’t sustain those types of record appreciation levels without eliminating certain consumer niches, including first time home buyers. Now that levels are back within range, the first time home buyers are once again able to reenter the market which is why we are seeing such a strong surge in sales in that level.

It’s just a matter of time before we weed through the remaining banked owned inventory and we should begin to see prices stabilize. Once we see that, the remaining areas of the market should begin to see an upswing, too.

With that said, let’s take a look at this week in real estate:



  • Boulder/Longmont—Our Boulder office reports that under contracts in the Boulder market are up 30% over the previous week with new listings down over 40%! I know it's only a week, but that's the kind of trend we like. The Boulder office showed a big uptick in under contracts over the previous two weeks. The Longmont office reported that business is happening. Our showings increased by 19% week over week. This is especially significant due to the blizzard like weather late in the week which caused us to close the office early on Friday. Some buyers are choosing not to buy foreclosures and short sales due to the challenges that those properties can bring. This bodes well for the non-distressed sellers. Homes in the lower and moderate price ranges are selling quickly. After the snow, the weather became wonderful. Spring has made it to the Rocky Mountains. We are also experiencing positive job growth year over year and the unemployment rate in Boulder county is lower than the state figures.

  • Evergreen/Conifer—Our Evergreen office reported that we had a total of two new listings for the week. Three listings went under contract. There were forty-eight showings for the week. Sales and showing activity were affected by the weather. Our office was closed for three days.

  • Denver Central—No information reported.

  • Devonshire—Our Devonshire office is reporting that in spite of snow storms and other weather issues, showings are increasing consistently. Buyers are finding it easier to pre-qualify for loans and are anxious to get out and begin looking. The moderate price range properties are holding strong with multiple offers. We know that the upper end will follow in the next few months. Buyers are coming to realize that if they don't move quickly on available properties someone else will.

  • Douglas County—No information reported.

  • El Paso County—Our Colorado Springs office reports that buyer activity is picking up dramatically mostly due to military and Schriever Space Center. Short sales are slowing and a lot of those sellers are renting their homes. REOs have slowed as well as foreclosures.

  • Larimer County—Our Fort Collins office reports that activity continues to increase in our market with property showings increasing and still the occasional multiple offer situation. The majority of the current activity is coming from homes in the $200,000 to $300,000 price range. The upper end is moving slowly. The three days of rain/snow did decrease the activity somewhat last week, but we are looking to rebound strong with the great spring weather and 70 degrees this week. We are still experiencing numerous short sales and some foreclosure activity. However, the banks are responding to offers a little quicker than before as these situations are becoming more commonplace. Interest rates are the lowest they have been since 1954 and the property values are holding relatively strong for our economy. If you are waiting for a better time to buy you may have to wait another 55 years!

  • North Metro—Our North Metro office reports that Agents are going out on many listing appointments. Some sellers remain overly optimistic about the price they would like to get for their home, over current market value. We are seeing an increase in listing appointments that are in short sale situations. The first time home buyer tax credit is helping to increase the number of buyer appointments. The result is a lower average sales price of the homes we put under contract. Floor calls continue to be strong. Average list price this week has been around $250,000.

  • Parker—Our Parker office reports that although we set a new record for listings under contract for the month of March, our inventory increased slightly because we added another high producing team to our sales force. Showing activity has been the highest since 2006! Our number of showings increased by over 100 in one week! We still receive multiple offers on power priced listings. Last week’s record was 14 offers on one listing within the first four days on the market.

  • Southeast Metro—WOW!! Busy, busy, busy with showings averaging 100+ per day! Our success story of the week is a condo near City Park that went on the market and closed in two weeks at full price! We continue to see multiple offers on homes priced below $250,000. Open houses are generating lots of energy and excitement in the market.

  • West Lakewood— Nearly 70% of our sales are under the $250,000 range. Very little is moving over $500,000. Many, many first time homebuyers are taking advantage of the $8,000.00 tax credit. Nearly all multiple offers are on bank-owned properties.

Next week will bring some more interesting news. Check out this article that ran Monday in The Wall Street Journal: http://www.washingtonpost.com/wp-dyn/content/article/2009/04/19/AR2009041901875.html. Once we see the results of new home sales (existing home sales were already reported), we should have a better indicator of where we are. I’ll leave you with this excerpt from the The Wall Street Journal’s story:


“Whatever the March numbers say, there are good reasons to think that home sales will improve as the spring selling season gets underway. Anecdotal reports suggest that low mortgage rates and an $8,000 first-time home-buyer tax credit are coaxing buyers back into the market. And while foreclosures are set to rise as banks begin to move on delinquent homeowners, that actually could boost home sales as banks auction homes for whatever the market will bear.”


The market is without a doubt changing and we may finally be seeing the end of the great housing challenge of the 2000s. I for one am very happy to see it.

Brian L. Thomas
 
Originally posted by,

Chris Mygatt
President
Coldwell Banker Residential Brokerage Colorado


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Tuesday, April 7, 2009

I'm Invigorated!

Okay, I know that headline seems a little exaggerated and maybe even a little far-fetched, but honestly I am.  I don’t know if it is a combination of the sun, the clean Spring air and the excitement that seems to be brewing in our offices, but I can feel that change is abuzz in the real estate market and for the first time in a long time, I’m truly invigorated!

 

This week was yet another week of milestones.  Several weeks ago I questioned, are all of these positive indicators the start of a trend or are they just that, positive indicators that will have a short shelf life.  Well, after at least four weeks of some strong, positive gains, I truly am invigorated.

 

This week, NAR released its Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, reporting that pending home sales rose 2.1 percent to 82.1 from a reading of 80.4 in January.  Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains.

 

NAR’s Housing Affordability Index also rose 0.9 percentage points to a record high of 173.5 in February from an upwardly revised index of 172.6 in January, and is 36.3 percentage points higher than a year ago.  This broad measure of housing affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.  1970!!!!

 

Also interesting, Inman News released a survey this week noting that of the 225 readers who responded to an online survey from March 23 to April 1, 48.9 percent said housing markets in their area were improving, 27.1 percent said they were stabilizing and just 12.9 percent characterized them as worsening.

 

That, along with the indicators I’ve referenced over the last several weeks including last week’s jump in mortgage applications, the historic drop in interest rates and the surge in new housing starts, we truly are seeing some very positive and indicative signs of recovery.  I truly believe that buyers are seeing inventory move and that gets them moving. 

 

It seems some of Obama’s various recovery efforts are starting to have some effect on the market.  The billions to slow foreclosures and goose bank lending, plus the tax credit, are getting buyers to move which is a positive sign. 

 

Now, of course, we’ll have to keep our eye on it and watch as the market continues to progress through our traditionally busy Spring selling season, but thus far the signs are positive and my magic eight balls says “Outlook is Good.”

 

With that good news in tow, let’s take a look at this week in real estate: 

 

  • Boulder/Longmont—Our Boulder office reported very strange two weeks in the Boulder market.  New listings fell about 33% during the last week of March compared to the week before but under contracts skyrocketed!  They went from 3 to 27! A 900% increase.  Showings were down due to the snowstorm.  Inventory in Boulder County continues to increase but we are holding steady at about 10% of going under contract in the first two weeks on the market.  Our Longmont office reports showing activity was down 35% from last week…the blizzard of March 2009 did impact the showings!  The week ended on a positive note with the showings going up again.  Buyers are finally getting the message that the interest rates are awesome!  More investors are writing contracts to purchase.
  • Evergreen/Conifer—Our Evergreen office reported a total of two new listings for the week.  Two listings went under contract, one is a short sale property.  63 showings for the week making a total of 335 for the month of March.
  • Denver Central—Our Denver Central office reports we have seen a big increase in activity in March. The lower-end market is very hot right now with multiple offer situations.  We are also seeing increases in sales volume.
  • Devonshire—Our Devonshire office is reporting that we are still seeing showings increase even with the unsettled weather.  Buyers are getting tired of waiting for things to stabilize and are anxious to get out there and get a home.  They are however, looking at many more homes before making a decision.  The interest rates are wonderful so I believe that activity and closings will increase as we move further into Spring.  Sellers are seeing that price and staging of their homes are more important than ever.  Now is truly the time to move forward towards your real estate goals.
  • Southwest Metro —Our Southwest Metro office reports our floor has been generating great leads this past week.  We have had four Agents that picked up buyers from their floor shifts.  Open houses were very successful this past weekend.  We are seeing a turning point (small but turning).  Our mortgage rep is still very busy.  He registered 25 leads out of 26 this month!
  • El Paso County—Our Colorado Springs office reports that the under $250,000 market seems to be the hottest price range right now compared to $350,000 two months ago.  This may be due to more of the workforce of some of the companies at the Space Command Center at Schreiver coming in and the executive transfers have slowed.  
  • Larimer County—Our Fort Collins/Loveland office reports that Spring has sprung and following a fast-moving blizzard this past week, we've seen a spike in activity in Larimer County.  Loveland overall remains slower, but all indicators are that the Spring selling season is underway in the Fort Collins/Windsor area as showings are up 20% from previous weeks.  Contracts are strong as well with an end of month blitz that doubled the number of the week before.  We are seeing an increase in open house activity and sign calls as interest in current inventory increases while interest rates remain unbelievably favorable.
  • North Metro—Our North Metro office notes that Agents are going out on many listing appointments.  Sellers are ready to "sell.”  Numerous buyer appointments as well.  Seeing an increase in number of short sale listings.  Average days on market for our listings is about 95 days.
  • Parker, Douglas and Elbert Counties —What a busy week last week of March!  We set a record for March under contracts as well as for showings during week one of March of over 300! The biggest impact comes without a doubt from the first time home buyers that want to take advantage of the $8,000 tax credit.  Because of the increased activity and the decreased inventory, more and more communities in the lower price ranges show a stable value.  The upper end communities are still slow, however it's only a question of time until those pick up as well.
  • Southeast Metro—No information reported.
  • West Lakewood— We have bank owned properties that are receiving multiple offers.  This week we had a short sale listing receive seven offers. Of the property with seven offers, the selling Agent was asked to give their highest and best offer. Two owner-occupied homes which have been listed since Fall received multiple offers.  The buyer offered $10,000 over list price and lost the home to an investor. First time buyers who want to take advantage of the tax credit are finding themselves either in multiple offer situations or the property went under contract within hours of them viewing it.  They are also in competition with investors. Owner occupied sellers are busy getting their homes ready for market. They are open to staging, painting and carpeting so they can compete well.  Eight parties came through a $730,000 home at an open house last weekend.  That is the highest traffic since last summer.

 

As you can see, the market is heating up.  Consumer confidence is finally on the rise and buyers are edging off the fence.  For those who are still cautious, please consider all of the positive signs that are knocking at your front door.  From the first time home buyer credit to the historically low interest rates to the increases in conforming loan limits to the generous amount of inventory to the motivated sellers to the…honestly, the list goes on.  Opportunity is knocking and it is time for buyers to recognize this and jump in.

 

 

Brian L. Thomas

Coldwell Banker Residential Brokerage

720-934-4745 Direct

303-675-5657 Fax

Brian@SouthOfDenver.Com

www.SouthOfDenver.com

 

Monday, March 23, 2009

It Was a Week of Surprises.And Best of All, Spring Has Sprung!

First, CNNMoney.com reported a sudden, unexpected surge in U.S. housing
starts. According to the Commerce Department, housing starts rose to a
seasonally adjusted annual rate of 583,000 last month, up 22% from a revised
477,000 in January. The big surprise: Economists were expecting starts to
decline to 450,000, according to consensus estimates by Briefing.com.

Furthermore, applications for building permits, considered a reliable sign
of future construction activity, rose 3% to a seasonally adjusted annual
rate of 547,000 last month. The other big surprise: Economists were
expecting permits to fall to 500,000.


Also interesting this week, retail sales figures fell much less than
expected in February, and surprisingly strong January sales were revised
even higher. According to CNNMoney.com, "U.S. store sales showed a
smaller-than-expected decline in February after an unexpected surge in
January that was bigger than originally reported…The Commerce Department
said total retail sales fell 0.1% last month, compared with January's
revised increase of 1.8%. Economists surveyed by Briefing.com had been
expecting a decrease of 0.5% for February."

So, is it safe to call this a trend? Are we out of the woods yet? It's
tough to say. In all honesty, you don't know whether or not you've hit
bottom until you're on your way back up but it seems some of the critical
signs are starting to show signs of life which is welcome relief for our
wounded economy.

Also in the news this week, the Federal Reserve announced plans to purchase
up to $750 billion in mortgage-backed securities and up to $300 billion in
longer term Treasury securities. Our representatives at the National
Association of Realtors applauded the plans noting "This is great news for
American home buyers and homeowners because mortgage interest rates will
continue at historic lows."

What this means for Americans is that a greater number of home buyers will
be able to purchase a home and homeowners facing challenges will be able to
refinance into better terms. As NAR noted, "We already are experiencing a
great improvement in housing affordability due to historically low interest
rates and the Fed's move will push affordability conditions to the best
levels in 40 years. In addition, continued low rates will lessen
foreclosure pressure and help stabilize home prices sooner, as more
Americans buy homes and draw down inventory."

Along the lines of mortgage relief, the Treasury Department this week
launched a new website for consumers seeking information about the Obama
Administration's Making Home Affordable loan modification and refinancing
program. The site, www.MakingHomeAffordable.gov, offers features including
interactive self-assessment tools that will empower borrowers to determine
if they are eligible to participate and calculate the monthly mortgage
payment reductions they could stand to realize under the Making Home
Affordable program.

This is a helpful site that we should all be sharing with our friends,
families and clients alike.

Finally, on Friday, Jim Gillespie, president and CEO of Coldwell Banker Real
Estate LLC, will participate in a discussion about the state of the housing
market, live from the New York Stock Exchange on CNBC. This will occur on
Friday at approximately 4:30 p.m. (Eastern).

Jim will participate on the "Roadmap to Rebound" segment hosted by Maria
Bartiromo. Yale economist Dr. Robert Schiller and Sanjiy Das, CEO of
CitiMortgage, will also participate.

In another powerful symbol of what our Coldwell Banker and Realogy leaders
are doing on behalf of consumers and the real estate sector in general to
enact change that will stimulate housing and ultimately the economy, Jim
plans to call upon government leaders to enact a $15,000 non-refundable tax
credit to ALL buyers and also a mortgage buy down that would bring rates to
the 4-4.5% range. This, NAR reports, could generate an additional 840,000
home sales over 12 months. This home buying activity would have major
implications in stimulating the overall US economy since NAR also reports
that each home sold generates more than $60,000 in economic activity. The
proposal would also have a greater impact on foreclosures than the current
stimulus package. I hope you will all watch.

Now, with all of that exciting news for the week in tow, let's take a look
at our local real estate news:

Boulder/Longmont—Our Boulder office reports that new listings are down 10%
from the week before, but listing activity is still very busy. Sales in the
second week of March increased by 23% (from the previous week). Showing
activity continues to climb and based on Agent reports there are loads of
buyers out there. They still are taking longer to pull the trigger than in
past years, but not as many seem gripped by fear as a few months ago, as the
increased rate of sales shows. Houses that are in top condition and under
the median price ($539,000 in Boulder) are selling briskly, often within 10
days of listing. Our Longmont office reports that showings were off 11%
from last week. We are seeing activity in the new builder market. Builders
are offering some super incentives and buyers are seeing great values. We
are still seeing a lot of buyers "sitting on the fence." They are waiting
for the interest rates to go down or they are waiting for the prices to
decline—the problem, there hasn't been much movement on either end. We are
all waiting for the press to realize that real estate markets are local and
we are not in any kind of drastic state here in Longmont.
Conifer—Our Conifer office reports one new listing during the week. Four
listings went under contract during the past week plus one buyer—one listing
was under contract within one day of going on the market and one within two
days. Showing activity continues strong with 34 showings during the week.
Evergreen—Our Evergreen office reports a total of five new listings for
the week. Two listings went under contract. We had 73 showings for the
week plus seven Agent previews for a total of 180 thru mid-month.
Denver Central—Our Denver Central office reports that buyers can expect to
compete with other offers for ANY property priced under $250,000 in the
Denver Metropolitan marketplace. There is renewed interest from buyers
because of low mortgage rates, new tax incentives and an overall feeling
that the Denver market has hit bottom in inventory. Anticipation is high
that price increases will follow shortly.
Devonshire—Our Devonshire office is reporting that even in these
challenging times we are still setting showings at a pretty good rate so we
know that buyers are out there. Buyers are very hesitant to make offers and
commit to purchasing at this time as they are feeling the angst of the
current economic conditions. With rates for mortgages dropping again, it
may be the perfect time to buy. If sellers are pricing their homes
correctly, they are selling. As real estate brokers, we continue to
underscore our value as we are knowledgeable on what it takes to get
transactions done. It would behoove consumers to use a full time real
estate professional. We are making a concerted effort to get the good news
out there when most news seems to be gloomy at best. It may be a great time
to buy. Interest rates are fabulous and sellers are pricing their homes
realistically at last.
Douglas County—Our Southwest Metro office reports that our showings have
increased as well as the attendance at our open houses. We have had several
Agents report excellent turn out at their open houses and they have picked
up buyers and listings. We had a phone call from an article regarding our
community service that was run in last Sunday's paper. Our mortgage rep is
quite busy and buyers are ready to start taking the steps to buy a home.
El Paso County—Our Colorado Springs office is reporting steady sales and
showing activity. We had our first VA listing cancellation due to the new
government guarantee on VA loans. I suspect there will be a few more this
week. Commercial financing is extremely tight and guidelines need to be
checked daily. Work has stopped on the new mall at Highway 83 and Voyager
due to construction financing changes.
Larimer County—Inventory is increasing throughout Larimer County as the
prime selling season inches closer. However, the market remains very price
sensitive—so those sellers with super clean homes and terrific curb appeal
will continue to have a leg-up on the competition. Many buyers are looking
at foreclosures and short sales but due to substantial waiting periods for
responses from banks, many don't have time to wait. With the change to
daylight savings, we're seeing an increase in showings weekdays as buyers
are able to view properties after work.
North Metro—We have seen a big increase in activity in March so far. The
lower-end market is very hot right now with multiple offers common. We are
seeing increases in sales volume overall.
Parker—Our Parker office is reporting that activity has increased and
although we see more new listings on the market, the inventory did not go up
because the sales activity is steady as well. Traffic through open houses
was very high over the last weekend and the call volume on our listings has
increased as well as an increase in showings. Sellers are now better
educated through our Agents and are power pricing their homes to create more
energy in the buyer pool. They also react faster to changes in the market.
Southeast Metro—Brokers are very busy writing offers! In some cases,
brokers are writing at least three offers before going under contract due to
multiple offer situations. Showing activity continues to increase as we are
now consistently setting over 500 showings a week. We are also seeing an
upswing in traffic at our Previews properties, too.
West Lakewood—Our West Lakewood office is reporting that open houses are
very active. We had 19 groups at one home and 23 at another. It appears
that many of the buyers are relocating or want to relocate from other parts
of the country. Most Agents are working with from one to five sellers who
are getting ready to place their homes on the market in April.

With spring break ending and the weekend weather outlook to be gorgeous,
look for the first of the spring garage sales as well as lots of great homes
holding open houses! For a schedule of open houses, go to www.OpenHouse.com
or www.ColoradoHomes.com. Spring has sprung!

Brian L. Thomas
Coldwell Banker Residential Brokerage
720-934-4745 Direct
303-675-5657 Fax
Brian@SouthOfDenver.Com
www.SouthOfDenver.com

Friday, February 20, 2009

Weekly Market Watch

New Legislative Action…May We Finally Restore Consumer Confidence

 

It was a week full of stories and reports, both from the cynics and proponents of the American Recovery and Reinvestment Act of 2009.  The $780 billion package was signed into law on February 17 and truly is the largest, most unprecedented recovery act in history.

 

The provisions of the bill were changing even up until hours before the House and Senate voted on the bill, but the final provisions were recently posted to NAR’s website.  Click here to access the details and learn more about the housing elements that were included:  http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019

 

Also announced this week was Obama’s $75 billion foreclosure prevention plan.  The multipronged plan calls for modifying loans for borrowers both at risk or already in default and for allowing those with little or no home equity to refinance into more affordable loans through interest-rate reductions.

 

Click here to read the details of the prevention plan:  http://www.realtor.org/RMODaily.nsf/pages/News2009021901

 

Obama’s administration said Wednesday that this prevention plan will help up to nine million people avoid foreclosure, by providing government funds to provide incentives to borrowers, loan servicers and mortgage investors to modify loans to affordable monthly payments.

 

I know many are wondering if this new program will help them.  Official guidelines of the plan won’t be unveiled until March 4, at which time we will focus our March Reality Check on the details of the plan and how consumers may take advantage of it.  In the meantime, I did find this article on CNN.com which may help in educating yourself:  http://money.cnn.com/2009/02/18/real_estate/Obama_foreclosure_plan/index.htm?postversion=2009021911

 

I realize this is a highly debatable topic right now but what is not debatable is the fact that in order to fix this housing crisis, we must stop foreclosures.  Real estate is 20% of the gross domestic product in this country.  The only way to fix 1/5 of this country’s GDP is to stop falling home prices and the only way we will do this is to stop people from loosing their homes.  This prevention program should help millions of people stay in their home and will hopefully get our country back on track. 

 

The fact is, when consumers feel safe in their homes, feel safe in making their payments and once again feel confident that they will continue to have a roof over their heads, they will begin to put their money back in the economy.  They’ll begin to make home improvements.  They’ll begin to feel more confident in their future and that consumer confidence will begin to trickle into all areas of our economy.  From home improvements to car purchases to vacations—and the jobs and associated spending that these create.  What we know is, when consumers feel confident, they spend.

 

Now I realize for many that statement conjures up far too many negative emotions from the recent past—people who are living beyond their means simply because they think their house is going to appreciate.  Fortunately this plan and that of the American Recovery and Reinvestment Act of 2009 provide stipulations that we hope will stop history from repeating itself.  Couple that with the fact that lenders have become far more conservative in their lending practices, we should finally be on a level playing field that will safeguard against such an issue.

 

Now, let’s take a look at this week in real estate:

 

  • Boulder—Our Boulder office is reporting very little change from the last week.  The increased rate of showings is holding steady and Agents are reporting buyer activity but not big up tick in contracts.  My sense is that we’ve been in a holding pattern until these two legislative initiatives were passed and now that we finally have the action, we should begin to see buyers enter back into the marketplace and those contracts begin to close.  Our Longmont office reports that showing activity was up significantly this week.  Open houses are seeing more activity.  The investor buyer is still looking for the great deals.  The rental market is particularly strong.  We are seeing a decline in available inventory.  Longmont seems to be the most reasonable place in Boulder County to buy/live.  First time buyers are becoming more active which will eventually trickle into all price ranges.
  • Clear Creek County—Our Evergreen office is reporting that we had a total of six new listings for the week.  On the flip side, only one buyer went under contract on a short sale property.  We had 69 showings for the week plus six Agent previews.  Our open house activity was down from the previous weekend (due to the holiday).  However, new listings in Sloans Lake brought 15 potential buyers through on Sunday.
  • Denver Central—Denver Central is reporting that short sales are picking up and banks are responding faster with offer approvals than they did this time last year.  An interest fact is that 10% of our sales are multiple offers—most of which are related to bank owned properties.  We are seeing an increase in the average sales price.  Energy is still good and our Agents are increasingly busy which is a positive sign.
  • Devonshire—Our Devonshire office reports steady figures across the board: listing inventory, sales activity and showing activity.  We had three multiple offer situations this week—two of which we won.  Our inventory is going down in the central Denver area and prices seem to be stabilizing.
  • Douglas County—Our Southwest Metro office is reporting that showings were down for the three day President’s weekend.  That said, Agents did hold open houses and had on average 8-12 groups of people come through.  First time home buyers have been awaiting the stimulus package to come through and now that it has, we should begin to see fence sitting buyers come back into the marketplace.
  • El Paso County—Our Colorado Springs office notes that Lockhead Martin and Northrop/Gruman both increased Southern California transfers to Colorado Spring.  Fore Credit in Phoenix closes the end of February and had 100 transfers that are now coming into Colorado Springs.  Builder activity has picked up on the five acre spec home business.  Homes in the $300,000 plus range have showed significant increase in buyer showings.
  • Elbert County—Our Parker office reports that although the number of new listings is still higher than the number of listings going off the market under contracts, the total inventory is coming down consistently because many of the listings that shouldn’t be on the market are being withdrawn or expire.  As a result, we see a higher percentage of listings actually selling.  Prices are slowly becoming stable in the Parker area while property values are still decreasing in the outer areas.
  • Jefferson County—Our Conifer office reports one new listing this week.  Two listings went under contract.  One REO property had multiple offers and went under contract above the list price.  Two additional offers on REO listings that we received are currently waiting for bank approval.  Showing activity continues strong with 39 showings during the week.
  • Larimer County—Our Fort Collins office reports that all indicators show increases across the board this week.  Our showing activity was at 189 showings and reports from the field are that buyers are out looking at property—lots of it.  Buyers are requesting to see virtually all inventory in a given price range.  I spoke with one Agent who showed over 20 properties in one day to a single buyer.  With the recent passage of the Economic Stimulus Package that includes an $8,000 tax credit to first time home buyers, it should be a terrific incentive for those who may have been waiting.  Permits for new construction remains at an all time low.  Builders remain aggressive to sell inventory.  With limited new construction inventory available, very small up tick in demand to see competitive pricing structures disappear especially in new highly desirable areas, like Timnath Ranch.
  • North Metro—No information reported.
  • Southeast Metro—Our Southeast Metro office reports that in addition to the several multiple offers on bank inventory, the office had an additional six multiple offer situations.  Brokers are very busy with first time home buyers and inventory in the $200,000 to $250,000 price range is moving quickly.  We are gearing up to have a great Spring!

 

Of course time will only tell if all of this legislative action will work and we’ll only know if it does when we are able to reflect on it a year, two or even three down the road.  But the fact is we’ve been in a holding pattern for far too long.  And our economy, country and people have struggled and lost far too much because of it.  The recent passage of these two very important housing initiatives—which include (among other things) the $8,000 first time home buyer credit and the increase in conforming loan limits—should finally put us on the road to recovery.

 

Until next week,

Have a great one,

 

Chris Mygatt

President and Chief Operating Officer

Coldwell Banker Residential Brokerage Colorado