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By now you know the Denver real estate market has bounced back, now let’s look at it by the record-setting numbers.
At the end of 2013 there were:
7,275 homes for sale, (down 6%).
67,550 new listings came on the market for the year, (up 12%).
67,429 homes went under contract (↑20%)
54,024 homes closed (up 17%)
The average days on market was 58 days (↓25%)
Average sold price was $306,910 (↑10%) and closed dollar volume was $16.6 Billion (↑29%). If this sounds like Realtor crack, it is.
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But what does it mean for you?
1. Did ya take a look at that map? Go ahead, click on it. Remember when there was a whole lot of pink and red, lots of yellow…? I do. Now the map is predominantly green and the key shows you how much each neighborhood has improved over last year.
(If you’d like more detail about your own neighborhood, shoot me an email.)

Metrolist expert Gary Bauer observes it this way:

The inventory of active listings, homes available for sale, started a downward trend in 2011, which continued through 2013. In March, 2013, the inventory of active listings was 6,682 homes, an all time low. Active Listings continues to be a primary sustainability concern for the home market.
Home affordability declined due to median home price increases. The month’s supply of inventory started and finished the year at 2 months.
Once again, rental rates continue an upward trend and rental availability continues to decline. With declining distressed properties, foreclosures and REO, at less than 10% of the market and low active listings, new home builders will again be an alternate in the housing market. The largest number of Single Family and Condo properties sold in price range of $100,000 to $499,999 for 2013. The largest number of Single Family homes sold in the price range of $200,000 to $299,999. The largest number of Condo homes sold in the price range of $100,000 to $199,999.
Million dollar plus homes closed/sold were up 16% when comparing 2013 versus 2012. Million dollar plus home closings accounted for $1.5 Billion of the $16.6 Billion total 2013 volume.
Mortgage interest rates started to increase and then fluctuated downward to later increase again during the year, with an overall increase of approximately 1%.

And that’s good news for all of us!

aspensAutumn looks golden for the Denver housing market, as sales remain brisk. Following the hot-as-wildfire spring of 2013, summer found balance with the seasonal increase of inventory, with no cooling trend in sight as fall turns in a solid start to the 4th Quarter. Home sellers are glad to be back in the game, while motivated buyers are finding a bit of relief from the frenzy as the after school market brings a more measured pace. The latest data from Metrolist®

points to an unseasonably strong local market heading into the fall selling season. High inventory levels and homes sold numbers coupled with a leveling of average home prices indicate an extended and robust local market. By all year-over-year comparisons, the Denver market is significantly healthier than it was at this time last year. Twenty percent more homes closed in August 2013, over 5,500, than in August 2012. “We expect to see continued high sales velocity and inventory numbers well into the winter months,” noted Metrolist President and CEO Kirby Slunaker.
Available homes on the market increased over 6 percent in the past 30 days, providing a stabilizing factor for the market overall. While the available inventory of homes and condos continues to increase over prior months, there is still less than a 7 weeks supply of homes and condos.
“The impact of seasonality may not be as significant as we’ve seen in years past,” said Slunaker. “Increasing inventory spurred on by a hot early buying season will continue to provide sellers and buyers prolonged opportunities late into the year.”

Average sold prices decreased one percent month-over-month, averaging just over $312,000, but home prices are up nine percent from this time last year. Meanwhile, the average days on market (DOM) was recorded at 39 days, down 39 percent from this time last year. The low DOM figure indicates a quick turnaround time and continued competitive demand for Denver-area homes.
Slunaker continued, “Rising mortgage rates have impacted the local market slightly, primarily in the mid-level market. Luxury listings are still seeing significant strength, while first time and entry level buyers seem to have taken the changing rates in stride.”

If the real estate market continues to look as good as the Denver Broncos… Super Bowl party’s on me!
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It’s “Cruiseship Limbo Contest” winning low.  It’s Barry White “Can’t Get Enough of Your Love” low. It’s “Bring out the charts and graphs!” kinda low. When you look at the housing market, it’s all relative. “Fewer people buying houses with a lot more people having to sell them”, that’s the kind of market we got used to after the shock of the bubble burst wore off. Then there was a stasis where the flood of foreclosures had receded and there was a nice level of inventory, but buyers wary of further market drop stayed on the fence: 2011 in a nutshell. Last January the shift began and like a flash flood, buyers filled the streets.  Now we have lots of buyers  and where are the sellers? Denver housing market inventory is at a 23 year low. What does that mean for you? Buyers should buy now, sellers should list while they have no competition, and you should call me with any questions you have about either.graph
 

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After you’ve finished your holiday shopping, why don’t we go look for a house?
Winter home buying has its challenges, but winter can be the perfect time to buy a home. As we head toward the snowy months, serious shoppers know their winter home buying power is increased by determination and AWD. Housing market prediction for 2014 is looking good and buying a home this winter might just be the ultimate stocking stuffer.I love me those cold weather clients!
Most people think of buying or selling their homes in the ‘high’ season, and while the balmy days of spring and summer are perfect for cruising open houses and power shopping, they also bring the crowds. In 2013 we saw a big bump in the Denver housing market:lots of buyer activity and low inventory meant happy sellers and buyers who were frustrated by the return of the multiple offer. Even when the market was down the notion that summer is the best time to buy/sell your house is one that is hard to break. After spring break, sellers prepare to list the moment the last school bell rings pushing inventory up and in the seller’s minds prices too. Many of these listings are sellers who want to test the waters, plant a For Sale sign in their yard along with the annuals and see if they get the price they want. But this supply side increase often works in the buyers’ favor or frustrates them when the fair-weather seller lacks the motivation to agree on a fair price. Sellers feel the same when sunny day buyers, indulging in some fantasy house hunting, create lots of traffic and little else.
Cold weather buyers and sellers are serious.
The real estate market is driven by many factors but the first and most enduring one is CHANGE. One of the most enduring reasons people buy or sell a home is because their lives are in transition. Though many plan their home sale or purchase, life happens without regard to season or convenience. Families change, jobs are gained, lost or relocated, promotions happen, marriage, divorce, birth and death– all create someone with a housing need.
Shopping or selling in a Denver winter are obvious– driving in show, slipping on ice, shoveling the walkway, taking your boots on and off so you don’t track sludge into the house, fewer showings– but the buyers are BUYERS and not just lookers. Winter sellers are ready and willing to make a move, and tend to price accordingly from the start. The slower season also means that lenders, title companies and appraisers are not so swamped, smoothing out the process and lowering emotion. And of course, there are fewer people submitting offers on your dream home.
As savvy shoppers know, the post-holiday season comes with plenty of opportunities for a bargain and that includes houses as well. Though we in Denver are beyond the clearance sale in our housing market, home prices are on the rise giving sellers more leverage as well.
Enjoy the holidays, spend time with your loved ones, take a spin around town and take in the lights. Then call me when you’ve got the ornaments put away and we’ll get the ball rolling.


How would it affect you if you could no longer write off the interest you pay on your mortgage?
According to panelists at Friday’s housing forum hosted by Zillow and the University of Southern California’s Lusk Center for Real Estate:

The burgeoning federal debt makes it unlikely that the mortgage interest tax deduction will survive in its present form. Of course, any proposed changes to the tax break for homeowners will spark a fierce debate over the fundamentals of the U.S. housing market, the value of home ownership, and consumer behavior.

“Fierce debate” he says? I’d call it a jobs-killer! But then again, I’m in real estate. Change is never easy, but when it hits our pocketbooks and the government, it really hits home. I advise my clients to educate themselves, talk to their tax professional and view the tax benefits icing on the cake. Knowing the long-term financial upside leaves them feeling good and more secure as they move forward with their biggest single purchase.

“I think it’s entirely likely that something big is going to happen (with the MID) starting next year with either administration,” said Jason Gold, director and senior fellow at the Washington, D.C.-based Progressive Policy Institute, an independent think tank.

A Congressional contingent advocates for the elimination of the mortgage interest deduction to help address the nation’s debt and budget deficit. Obviously things must be done to right the problem, but sticking it to a Middle Class whose beginning to feel the effects of a post-crisis housing market recovery seems a bit harsh. At the end of this year, a series of tax increases and spending cuts are scheduled to go into effect automatically unless Congress acts to prevent or alter them. Revamping the mortgage interest deduction is on the table as a way to head off that “fiscal cliff” scenario. (I wonder how many of those guys have a mortgage.)

Two years ago, a bipartisan deficit reduction commission recommended scaling back the mortgage interest deduction, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000 and the deduction is only for taxpayers who itemize.
The Simpson-Bowles commission proposed turning the deduction into a 12 percent non-refundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.

Though that seems more reasonable to me than the first idea, the National Association of Realtors has consistently defended the mortgage interest deduction in its current form.

Highly critical of the recommendation and claiming any changes to the MID could depreciate home prices by up to 15 percent, they are promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

So… we’re back to whose going to pay down the debt? And how.

The MID is a “tax expenditure,” meaning its cost must either be made up through higher taxes elsewhere or by adding to the debt, and it costs the government about $90 billion a year. Richard Green, the director of the USC Lusk Center for Real Estate, told forum attendees that reforming the MID is necessary for fiscal sustainability. “We need to get revenue,” Green said. “You need to make a judgment about what’s better or worse for the economy. In my opinion, it’s better to do it with tax expenditures, rather than rates, though you may have to do both to get to where we need to be.”
Because mortgage interest rates are currently so low, he added, “This may be an opportunity to do less damage by reforming the mortgage interest deduction than at other times.”

(I wonder what cuts would make this guy feel the pinch.)
The mortgage interest deduction is particularly polarizing because of the disconnect between how people use it and how it is perceived. Green gave the example of Texas where most people do not itemize their taxes (only about 30% of taxpayers do) so they cannot take advantage of the MID. This line of thought perplexes me. So… if more Texans itemized their taxes it would make things fairer? or does he mean that if they actually knew they could they would, adding to the deficit? And haven’t Texans done enough of that? 😉
No matter how the chad falls in the next three weeks, watch for ongoing and loud debates over the Mortgage Interest Deduction. *covers ears*

Source: Inman News, Andrea V. Brambila, Monday October 15, 2012


I am (where real estate is involved) lucky in love. I’m not talking about the beach house I got in the last divorce *winks* but how often I find Cupid at the closing table. It takes work to find a house with everything on your buyers’ wish list, but it’s nothing short of kismet when the brother and sister selling their father’s home meet the mother and the two kids who’ll soon be hanging out in the tree house their father built. Every home has a tale to tell, and when that love story moves from one chapter to the next as gracefully as a Jane Hamilton novel, you know you’ve made a “love connection”.
Manufacturing love stories between buyers and sellers… that can be a tricky matter.
Perhaps it’s the rise of social media, where everything is suddenly shared, or the result of Denver’s revived real estate market where the multiple-offer situation has made a comeback, but the latest accessory to go with an offer is not an earnest money check, it’s… The Love Letter.
I had a few of these cross my desk when the market was struggling. Sellers, desperate to sell and worn down by the reality of their diminished property values, were thrilled to hear those four little words, “We have an offer”. Until the contract hit my inbox, followed by a “We really, really love you house, we just don’t want to pay much for it” letter, which usually left a sour taste in and brought a few choice words out of the sellers’ mouths. I’d say it was the real estate equivalent of Fifty Shades of Grey; lousy writing and you know someone’s about to get screwed.
Enter the hero. The market shifted, and so did the tone of this tome. With multiple offers a common occurrence, buyers (or their agents) believe if they add a bit of folksy insight into who they are— Their years in Seminary, how he fell in love with the garage, she with the garden and how the shed is perfect for their chickens— that flattery will give them an edge.
Now everybody’s got a gimmick, I get that. The homeless bear signs—“Homeless Vet” “Dog-lover”, “God Bless” (complete with Ichthus), or “Will Work for Beer” aiming at their niche market, their tribe. Buyers try and create some commonality with the stranger who currently occupies their dream home, or perhaps they’ve lost the past three offers and are looking for something other than raising their price to cinch the deal. Call me old fashioned, but isn’t that the Realtor’s job? I consider it my job— make that my sacred duty— to not only find my clients the right house, but to put together a fair and decent offer and present it to the seller’s agent, along with a persuasive argument on behalf of my buyer. That is the opening move in a strong negotiation. If I’m worth my salt, of course my clients will be over-the-moon with excitement at finding their dream home, but once we bring the personal into an already emotional business transaction, I fear the salt/wound proximity increases.
This idea of including a buyer’s note is circling around my office like a chain letter, and I don’t care if the world will end in ten days or killer bees will take over the Volvo, I’m here to break it. There are plenty of opportunities for good real estate agents to share your passion and exchange drawings of the chicken coop. To a seller the passion you feel is reflected, not through an effusive statement that your Goldens must have come from the same litter, but by strength of your offer.

And don’t we all need a little good news? Working in the real estate trenches I’ve been watching the steady turn around, especially evident in 2012 as the Denver real estate market took a sharp turn for the better. Today’s Denver Business Journal announced the data to back up my experience.

Colorado’s housing market stands out as the fifth-strongest in the country, according to the website 24/7 Wall Street.
Home prices across the state have increased by an average of 7.3 percent over the past year, putting Colorado between North Dakota (7.1 percent) South Dakota (8.3 percent). The ranking was based on a review of data from various sources, including the CoreLogic Home Price Index and foreclosure reports from RealtyTrac. 24/7 Wall Street forecasts Colorado home prices will increase by 3.7 percent between the first quarter of the year and the first quarter of next year.

Good news for the Dakotas, but we get to live in Colorado! If you’d like more information about your neighborhood or how you can make this market work for you, call, text, email or comment here and we’ll talk.

“I See What You Mean” (Big Blue Bear) created by Lawrence Argent, photograph by Elizabeth Thomsen
You may be surprised to know that in the Denver metro area, The Home Affordability Index (HAI) is at its highest recording ever. What does that mean? The HAI compares the median price of a home in the Metro Denver real estate market to the median income level, and brings the current interest rate for a 30-year fixed rate loan into the equation. As a home buyer this is good news as the median income earner can buy more house today than ever before. Why? Because home prices, while rising quickly, are still well below their peak prices of 5-6 years ago and interest rates are at never-before-seen historic lows. It is the interest rates that continue to make homes so wonderfully affordable, so let’s dig into those a bit.
The typical rate on a 30-year fixed mortgage tumbled below 3.5% for the first time last week, the latest record low in a trend that has fired up homes sales around the country. Freddie Mac’s weekly survey of what lenders are offering to qualified borrowers showed the 30-year rate at an average of 3.49%, down from 3.53% the week before. The 15-year fixed loan fell from 2.83% to an almost unbelievable 2.8%! Let’s put this in perspective. In late July 2010 and 2011 the typical 30-year rate in the Freddie Mac survey was just over 4.5%, more than a percentage point higher than now. The 30-year rate was above 6% in 2006 and most of 2007, over 8% back in 2000, and over 10% in 1990. Back in the bad old days of inflation, the rate topped 18% in 1981. Look at how the interest payments affect your monthly Principle and Interest payments:
$200,000 property in 1981 at 18% interest: $3,014
$200,000 property in 1990 at 10% interest: $1,755
$200,000 property in 2000 at 8% interest: $1,467
$200,000 property in 2007 at 6.5% interest: $1,264
$200,000 property in 2011 at4.5% interest: $1,013
$200,000 property in 2012 at 3.5% interest: $898
But wait, there’s more! According to a recent CNN Money article the average cost of closing on a mortgage has fallen by 7.4% over the past year. At the end of June, a homebuyer looking to close on a $200,000 mortgage with 20% down paid an average of $300 less than 12 months earlier. Even if you don’t have 20% down payment saved, you can put 3.5% on an FHA mortgage. Very attractive, no?
No one knows how long these historically low rates can last. But in the meantime my clients are taking advantage of them to buy the homes of their dreams and lock in once-in-a-lifetime interest rates.

Nothing happens overnight. After years of struggling with the housing crisis and millions of Americans struggling to stay in their homes, it looks as though we are finally seeing some light at the end of the tunnel. I live and work in Denver so this is the market of my expertise. With boots on the ground here, I’ve seen signs of the housing recovery for the past six months and it just keeps getting better. The Denver real estate market keeps trending upward and the following article from Canyon Title gives you some of the nuts and bolts reasons why that is so.

According to Reis Analytics, expansion and growth continue in the Denver Metro Area. While the recession did not bite as deeply into Denver as into other high-growth economies, the losses inemployment were substantial. But with job creation running positive for about the past two years, a substantial portion of the overall loss has been redeemed. According to preliminary data for April 2012, provided by the U.S. Bureau of Labor Statistics (BLS), non-farm employment was up 2.0% (24,100 jobs) from 12 months prior and was up 3.8% (45,300 jobs) over 24 months.

Additionally, “Metro Denver is repeatedly recognized as a bright spot in the national economy, thanks to our diverse array of high-tech businesses, relatively low cost of doing business, active and highly educated population, and ability to attract and retain a young and vibrant workforce,” said Patty Silverstein, the Metro Denver EDC’s (Economic Development Corporation) chief economist. “Forbes recently ranked Denver fifth on its 2012 list of the ‘Best Places for Business and Careers’ and Colorado ranked eighth on the Enterprising States report list of states expected to grow and prosper in the coming years. Across the nation, others are taking note of the slow and steady-but promising-momentum in Metro Denver.”

If you, or someone you know, is interested in learning more about how TODAY’S real estate market relates to you, please shoot me an email, sign up for the newsletter or give me a call. I’d be glad to go over your options and serve your best interests.