Real Estate Information

The positives continue to outweigh the negatives on the local and national economy front as well as in real estate market news.  Nationally, the U.S. housing market has started to recover from the most far-reaching crisis since the Great Depression.  Sales of previously occupied homes rose for the third month in a row in June, which hasn’t happened since early 2004.  Home sales rose 3.6 percent and were up in all regions of the country, and demand for U.S. mortgages to buy homes bounced up.  In another encouraging sign, the share of foreclosures on the market is shrinking.  About one out of three homes sold in June was foreclosure-related, down from nearly half earlier this year.

Locally, there were only 20,853 unsold homes on the market in June, which is a 20.1 percent drop from June 2008, and 5,664 homes were placed under contract, a 6 percent increase from May.  Sales, however, were down 10.2 percent from June 2008.  There are actually fewer homes on the market now than in 2002.  The median, or middle, price of a single-family home sold in the Denver area in June rose to $237,500, a 3.2 percent increase from June 2008 and a 7.95 percent rise from May 2009.  The median price of a condo, however, fell from June 2008 but was up from May 2009.

Still, potential home buyers are skittish, with more than half of potential homebuyers saying they’re not yet prepared to jump into the market, and fear of losing their jobs is the number one reason, a recent poll shows.  Americans recognize there are great deals to be had in the housing market, but many are in too much of a financial pinch at the moment to even think about buying. 

Again, the Denver area seems to be doing better than the rest of the country.  For the second consecutive month, the Denver area fared the best among 20 U.S. cities reporting drops in home prices.  The index showed an average price decline in of 18.1 percent in April 2009 versus April 2008.  Denver reported a 4.9 percent decline, the best in the survey.  Additionally, Denver is among eight cities that reported a month-over-month gain in prices.  A recent Moody’s study showed only 23 out of 381 of the nation’s metropolitan areas showed a moderating recession, meaning their economies were not contracting as severely as six months earlier.  The Denver metropolitan area was one of the 23.  Forbes Magazine recently rated metro Denver as the number one area for long term promise for home buyers.

Although the supply of Denver metro homes is way down, the demand is also lagging, making it a continued buyer’s market.  However, the pendulum is poised to swing back the other way.  So, if you are considering either buying or selling, now is a great time.  Call the Arnie Stein team, and see how we can help you meet your goals.

Well, no … but the journey is starting to become a little less bumpy.  More and more upbeat news is replacing the gloom and doom of the past year.  And the Denver metro area continues to be near the front of the pack.

The May metro Denver sales figures reveal that the average price of single family homes increased from $254,442 to $262,066.  The number of properties under contract increased 3.1%, and the number of properties closed went up 7.0% compared to April.  The number of existing homes sold has increased for four months in a row.  While still down substantially from last year, the month to month rises seem to indicate that we are beginning the climb up from the real estate bottom.  First time homebuyers are especially driving the market in Denver, and cash investors are buying up low-priced inventory.  The market is now seeing multiple offers in the lower price ranges indicating price appreciation is occurring now at the entry level prices which will translate to more sales in the spring and summer.

NBC’s Today Show ran a segment recently projecting Denver as the market with the potential for making the nation’s first comeback from the housing slump.  The area is showing one of its lowest inventories of homes for sale in six years, and there has been a relative lack of overbuilding.  The Denver area unemployment rate declined to 7.5 percent in April compared with 8.2 percent in March, and is much better than the national unemployment rate.  Although unemployment is rising, its rate of acceleration is starting to slow.

MSNBC recently stated that “if you want to be in the right place when the recovery starts, that place may be in Colorado, Idaho, Oregon, Texas or Washington.”  They believe that due to a high concentration of tech-related industries, we are well positioned to take advantage of the pent-up demand for technology.  Also, we largely missed out on the housing boom and were among the last to join the recession, so as conditions begin to turn nationally, we have less of a hole to dig ourselves out of.

The Denver area fared the best among 20 U.S. cities reporting sharp drops in home prices.  A home-price index for the 20 cities dropped 18.7 percent in March compared with March 2008.  Denver reported a 5.5 percent decline, better than Dallas and Boston.  Economists believe that this is one more sign that the economy will be on the mend moving towards positive growth by the fourth quarter.

So, we’re still on the road, but perhaps we’ve passed the unpaved portion and are about to start cruising down the smooth superhighway.  At the very least, we know that real estate values will eventually rebound, and buying today will eventually take advantage of the buy low, sell high strategy.

…and we’re proud to be part of the upbeat news!  In spite of the challenges of the economy in general and the housing market in particular, the Arnie Stein Team continued its consistent exceptional performance during 2008.  You may have seen the recent newspaper listing of the Denver Board of Realtors Million Dollar Roundtable of Excellence, in which we were named the #4 team in number of units closed and the #7 team in the highest volume closed.  Additionally, we were honored as the #1 team in most units sold at Fuller Sotheby’s International Realty as well as the #3 team in the Highest Closed Volume.  We’re always here to serve all of your real estate needs with our extensive knowledge, expertise and experience.

Although sales in the Denver area are well off past years’ pace, Denver is different from other parts of the country in terms of how the immediate future looks.  The most obvious indicator of that is the surprising lack of supply of homes and condos on the market in lower price ranges.  As of the first of May, inventory in the 7 county metro Denver area is almost 10,000 units below the supply of late spring of 2006 and about 6,000 less than last year.  That’s the smallest inventory in six years, and the supply actually dropped from the first of April, the first time that’s happened in ten years.  In the under $250,000 market, there is just over 3-1/2 months supply of homes available, which obviously reflects a seller’s market and is generating multiple offers on some listings.

With the spring buying season getting into full swing, home sales and prices in metropolitan Denver increased in April, with the number of homes sold up 5.7 percent and the median price of a single-family home up 3 percent compared to the previous month.  While more than half of the homes sold were priced below $200,000, the upper-tier market is also starting to show signs of life, with thirty-three homes priced at more than $1 million sold in April.  Many real estate experts believe the real estate market has hit bottom in the Denver area.

A recent headline stated that 30-year fixed rate mortgages tied a record-low rate, with records dating back to 1971.  The average rates slid to 4.78 percent, which is more than a point lower than a year ago.  And, of course, the expansion of the first-time home buyer tax break as part of the President’s recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers.

Another article stated that foreclosure activity in metro Denver declined at one of the fastest rates in the nation during the first quarter, falling 45.8 percent from the same period in 2008. Among metro areas with 1,000 or more properties receiving a foreclosure filing between January and March, only Worcester, Massachusetts bested Denver’s rate of decline.

Economists say that the signs of a housing market recovery will be reflected in three factors:  supply, demand and affordability.  Maybe the glimmers of hope will turn into the bounce-back we’re all hoping for!

Forbes magazine reports that Denver is on the list of 10 cities where Americans are relocating.  “Unemployment is on the rise, credit is tight and consumers aren’t spending – which means they aren’t picking up and moving much either.  Very few places in America saw significant population growth in 2008,” Forbes said in its report.  “But the buzzing metropolitan area of Denver bucked that trend,” Forbes added.  “Its population increased by 2.17 percent in 1008 and 2.09 percent in 2007.  The report notes that Denver was listed as the most popular city in America in an October 2008 survey, “so it’s no surprise that this metro area still attracts newcomers.”  Denver also recently ranked No. 14 on Forbes’ list of the best U.S. places to do business.

Another report showed the number of Denver area homes sold in March increased 29.1 percent to 3,206, compared with 2,484 in February, possibly indicating pent up demand.  The median price of a single family home in March was $203,950, up 6.2 percent compared with February, and the median price of a condo was $128,500, a 9 percent increase over February.  The report also indicates there were 20,628 homes on the market in March, up 2.8 percent form the prior month but down 19.2 percent compared with the same time last year.  Homes are starting to sell faster, with the average days on market declining 6.7 percent to 101.  Single family homes were on the market an average of 99 days, which was the first time in six months the number was under 100 days.

Current active inventory is at a 6 year low right now, and homes under contract this month are up 9.63 percent over last month.  Some segments of the market are seeing multiple offers in the lower prices ranges, indicating price appreciation is occurring at the entry level, and the $8,000 Tax Credit for First Time Homebuyers will give a jump start to homes priced under $400,000.  Even high-end properties are also starting to move.

Housing experts have long argued that weaker rates of home-price appreciation in Denver compared with markets such as Las Vegas and Phoenix this decade would eventually translate into a quicker recovery here.  Speculators buying multiple housing units didn’t flock to Denver, which would have fueled a double-digit run-up in prices similar to what cities like Phoenix saw in 2005 and 2006.

Recently, Freddie Mac interim chief executive John A. Koskinen said that mortgage rates are “probably as good as it’s going to get” and the housing market is likely to rebound sooner than some forecasts.  He added that interest rates are probably close to bottoming out, and therefore, people who put off home purchases should take advantage of the low rates and a buyer’s market.

So, if you’re ready to buy or sell, it seems as if it could be a great time!  Give the Arnie Stein team a call, and let us assist you with all of your real estate needs.

Although there continue to be mixed economic signals, more positive factors are beginning to creep in.  Mortgage rates tumbled to historic lows, with the national average rate on a 30-year fixed-rate mortgage falling to 4.94 percent, the first time the average has fallen below 5 percent since record-keeping began in 1979.  The low rates, however, are available only to exceptionally qualified borrowers.

The recently signed Homeowner Affordability and Stability Plan should stabilize the housing market through the home affordable refinance program and the home affordable modification program which is estimated to help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly payments.  Colorado already reported that the state’s foreclosure filings dropped 2% in 2008, compared to 2007 when fillings grew by 40.3%.  Compared with other states, Colorado was early in getting borrowers and lenders to talk to each other to resolve a loan default.

Denver was the national leader for housing prices last year.  Home prices in the Denver area dropped 4 percent during 2008, but that was the smallest decline of the 20 metropolitan areas followed in a recently released study.  Some local experts were predicting that the Denver-area housing market should hit the bottom no later than the end of the third quarter of this year, and maybe as early as the end of the second quarter.  Denver was among the cities with the least run-up during the boom, with prices rising by 40% from 2000 until the peak in August of 2006.  Home prices have since given back less than 10 percent of the gains, contrasted with cities like Miami and Los Angeles, where prices rose almost 200 percent but have since declined by almost 40 percent.

The number of homes placed under contract in the Denver area housing market in February increased 9.2 percent, although it’s still down 18.4 percent from the same period last year.  The median price for a single-family home was up 5.8 percent from January and condos rose 4%, with both down substantially from 2008.  It does appear that home prices in our area have moved closer to stabilization.  The month-to-month improvement points toward rising consumer confidence.

Even nationally, analysts say home prices are closer to stabilizing today than at any time in the past nine years.  Based on the latest data, prices for new and existing homes combined now equal 2.9 times median household income, nationwide.  Three years ago, just before the housing bubble burst, this ratio was 4.5 times income.  Add in the fact that interest rates are much lower today than they were two decades ago and housing is even more affordable.

Another important trend locally is that that available home inventory dropped 20.54 percent, with March inventory of homes in Denver the lowest in 6 years.  This trend will likely cause an increase in the demand for those fewer properties on the market, with a subsequent increase in buyer activity.  Denver has outperformed most of the nation in the housing market, in large part due to Colorado’s above average population growth and job stability.  Maybe things aren’t as bad as we thought!

Most of us are not unhappy to say goodbye to 2008, with its economic downturns, failing financial institutions, home price implosion, and massive job losses.  The Denver area was not immune to the sinking economy, with home prices and sales continuing to slide.

However, 2009 has begun with some rays of hope.  At the end of 2008, Denver’s home-resale market showed signs of finding its balance, with the supply of unsold homes falling sharply and homes selling a little faster.  Hopefully, last year’s 20.3 percent decrease in the inventory of unsold homes will be met by increased demand from buyers lured by lower prices and mortgage rates.  Actually, median single family home prices rose between November and December, although remaining down from December of 2007.  Financing difficulties help explain why the number of closings fell 3.9 percent last year, despite a 1.6 percent increase in the number of homes put under contract.  The recent decline in 30-year mortgage interest rates from more than 6 percent to about 5 percent should spur a slow, gradual recovery in the housing market this year, ahead of the rest of the country.

A recent quarterly report issued by PMI Mortgage Insurance Co., said the Denver-Aurora metro area ranks 10th among the cities that are expected to have stable housing prices between the third quarter of 2008 and the same quarter of 2010.  The index shows Denver bucking a national trend toward an increased risk of lower home prices, where 369 of 381 of the nation’s metropolitan areas have a rising risk of lower prices.  With the national press reporting Denver as being a low-risk area for declining values, this report could help accelerate an expected surge of real estate investments by savvy buyers looking for bargains.  The current housing market increasingly resembles the late 1980’s, when the market was beginning to recover from a hammering.  The smart investors saw the bottom of the market and began buying real estate in a big way.

And, first-time buyers are having it best of all.  A program provided by the U.S. Department of Housing and Urban Development lets first-time buyers put down just $100 on HUD-designated properties.  As a buyer’s market, with a lot of inventory, many sellers are willing to help with closing costs.  Also, first-time buyers should check out a new one-time tax credit made available last year.  In addition, the Colorado Housing and Finance Authority can provide both financing and educational tools in the first time home-buying process.

So, lets all hope that the encouraging signs at the start of 2009 indicate a turning point in the area’s economic future.  And, remember, please contact us if there is anything we can do to make your next home buying or home selling experience the best it can be!

The economic downturn has resulted in sensational headlines painting a gloomy picture of the national housing market, and there are some harsh realities we all have to face.  The median home price slipped 15% in metro Denver in November compared with the same month a year ago.  Additionally, the number of properties sold in November dropped 16.1 percent compared with the previous year and was down 31.8 percent from October.  But, did the price of every house in metro Denver drop significantly?  Actually, most of the decline is due to the mix of what has sold, with the volume of distress sales up 41 percent while regular home sales declined 24 percent.  Since more inexpensive homes are selling, this is the main driver of the price reduction.  The number of home sales that were foreclosures or short sales varies considerably across the metro area, with Greenwood Village at 11% while Commerce City had 75% such sales, and most foreclosures have been homes under $200,000.

And, yes, there are some benefits and rays of hope in today’s home market.  If you’ve been looking to buy a home, today’s market is good news for home buyers.  You can be optimistic about getting into the market or moving up by taking advantage of excellent interest rates or concessions offered by home builders or homeowners.  There is still a strong belief in the long-term viability of housing as a solid investment if you buy at the right price.

Furthermore, Colorado and Denver are faring a bit better than other parts of the country, with Denver home values declining at a slower rate than the rest of the nation.  Denver was the third-least affected market in the current downtrend, after Charlotte and Dallas through the first three quarters of the year.  Colorado foreclosure activity is poised to drop this year from 2007, with 14 percent fewer completed foreclosures in the first nine months of this year compared to the same period in 2007.  It is the first time that there has been a year-over-year drop in foreclosures since at least 2003.  Also, Colorado remains among the fastest growing states in the nation, placing third with a population growth of two percent, after Utah and Arizona and tied with Texas and North Carolina.  As of July 1, Colorado’s population was 4,939,456, according to the Census Bureau.

So, if you are a potential homebuyer, today’s market offers some surprising home-buying advantages.  And, if you are holding on to your current home, hoping for better times ahead, you can rest assured that Colorado is still attracting newcomers and doing better than the rest of the nation.  In the long run, the area’s steady growth and a diverse economy will help shelter the value of your home until a full market recovery is achieved.

Amid all the unpleasant economic and financial reports, there are some notable bright spots for the Denver real estate market.

The Urban Land Institute named metro Denver one of its top 10 real estate markets to watch next year, in its Emerging Trends in Real Estate 2009 report.  The report, which is based on the insights and predictions of real estate experts nationwide, cited some of Denver market’s encouraging features, including a major federal government presence to buffer job losses, as well as steady population growth.  Also, industry diversification and an excellent mass transit system are additional positives for Denver-area real estate.  The 30-year-old Emerging Trends report is the oldest industry outlook for real estate in the nation.

Furthermore, SmartMoney Magazine has listed Denver in the top 7 areas most likely to rebound in home prices.  Denver’s overall outlook is sunnier than for most western cities because neither inventory nor prices spiraled out of control during the boom.  Now, with six months’ worth of homes in inventory – the level most experts judge to be roughly in balance – the city offers considerable upside.

SmartMoney points particularly to Cherry Creek, where prices leaped 16 percent in the past year.  The area’s popularity illustrates a common theme in U.S. housing markets:  established, close-in neighborhoods are often holding up better than suburbs, because they didn’t endure overbuilding and because higher-income owners were less likely to need subprime or adjustable-rate mortgages.

So, there are encouraging signs that the negative factors with respect to overbuilding, speculative pricing and declining sales may be working their way through the system, and the real estate indicators may be starting to look better.

The number of unsold homes in the Denver area real estate market plummeted in October, falling to an almost three year low.  This is largely due to homeowners keeping their houses off a market loaded with a large inventory of foreclosed homes.  The 23,120 unsold homes on the market represented a 20.1 percent drop from October 2007.  The last time the inventory was lower was in January 2005.  It was the eighth consecutive month that the inventory of unsold homes dropped from the same month a year earlier.  The inventory is down 27.7 percent from its peak of 31,989 homes on the market in July 2006.

The average price of a single-family home sold in October was $250,172, down 13.6 percent from $289,754 in October 2007, but there were 4,504 homes placed under contract, down only 3 percent from 4,645 in October 2007.

There were some notable exceptions to downward trends in price and closed sales of single family homes.  In the South Suburban East area, closed sales were up 11.1 percent in October over last year, and the average price increased 6.0 percent from $499,455 to $529,217.  Similarly, the South Suburban Central marked showed a 16.0 percent increase in closed sales and a 2.6 percent increase in average price from October of last year from $280,097 to $287,341.  In the Highlands Ranch/Lone Tree area, sales were down 10.6 percent year over year, but average price was up 2.8 percent to $350,513.  Even with the decrease in number of sales, Highlands Ranch/Lone Tree has only 4.3 months’ worth of inventory.

Experts anticipate the real estate market will not reach bottom until the end of next October, with the biggest barrier to trying to take advantage of low home prices being the difficulties in obtaining a mortgage.  The government will need to step in quickly to prevent further erosion of housing prices and stop the foreclosure crisis sweeping the nation.

It seems the majority of folks out there feel that they should wait on purchasing a home because they feel mortgage rates are going to drop. Well, there are some opinions about that happening. Below you can read the analysis from our friends at the Shirmeyer Report (they've been analyzing the nations economy for a long, long time) and their opinion is that rates aren't going to get much better than they are now. Of course, no one can totally predict what will happen with rates, but if you're one of those who are waiting to purchase a home hoping rates will go down, please read this following excerpt to help you make your decision.

Looking for mortgage rates to decline a lot? I don't like always being the
messenger of bad news, but someone has to do it. Long term interest rates,
including mortgages, do have an outside chance of falling a little from the current
levels but not enough that will be noticeable in any big way. Inflation fears are
still there and as long as investors normally attracted to long term debt
(insurance companies, pension funds and others that historically need to buy long
term debt) to match liabilities with long assets have little reason now to step in
on the 10 yr note. Inflation concerns won't go away as long as commodity prices
increase. Core inflation is a meager 2.2%, but the overall inflation rate is about
3.4%. Never mind that the core rate (ex food and energy) is low; markets will begin
to look at the overall rate as more an indication of inflation. Even just focusing
on the core rate; at 2.2% and the yield on the current 10 yr yield at 3.65% leaves
a real rate of return at a miniscule 1.45% and that is not enough to attract buyers
in any major way.