Tag Archive for: housing market

Saying The Denver real estate market is hot is like saying that the U.S Congress works together in perfect harmony…except, the first statement is true. It will take a while before Denver home buyers believe it, but it is a Seller’s market…and a buyer’s market, too. Huh?
It sounds like a paradox but in fact it perfectly describes our current Denver Metro real estate market. Here’s how:
In the market below $300k where 80% of the homes are sold it’s a blistering seller’s market. You heard it right, a seller’s market! There are only three months of inventory sitting on the market right now, where six months is considered a normal, balanced market. There are simply more buyers than sellers right now and this is translating into multiple offers on listings, sales prices often well above asking prices, and marketing times plummeting.

Particularly hot is the market below $225k, which has only two months of inventory. It’s not uncommon for a listing to have 10 showings and a full price offer in the first week. There are a number of factors that have caused this dynamic, one of which is the dramatic reduction in the number of bank-owned and short sale properties on the market. This reduction in distressed inventory has left regular home sellers in a great position and contributed to the sizzling seller’s market.

Ok, so we know it’s a seller’s market. Then, how can it also be a fantastic buyer’s market at the same time? It is, because according to the National Association of Realtors the Home Affordability Index is at its highest recording ever. Just like it sounds, the HAI is a measure of how affordable homes are in a given area. It’s calculated by comparing the median price of a home in the Metro Denver market to the median worker’s income level, taking into account the current interest rate for a 30-year fixed rate loan. What this means is that 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. Take it all together and the average home on the market HAS NEVER BEEN MORE AFFORDABLE.

So, while it seems like a paradox that it can be both a great time to sell and a great time to buy, it’s actually quite true. Call me and I’d be happy to explain more how we got to this state in the market and how you can take advantage of it.

Denver Metro Housing Stats.
Single Family:
Active Listings: 8,082 • Down 40% from Feb. ‘11
Under Contracts: 3,329 • Up 13% from Feb. ‘11
Solds: 1,978 • Up 12% from Feb. ‘11
Average Price: $270,821 • Up 2% from Feb. ‘11
Average Days on Market: 106 • Down 14% from Feb. ‘11
Condos:
Active Listings: 2,004 • Down 49% from Feb. ‘11
Under Contracts: 821 • Up 11% from Feb. ‘11
Solds: 517 • Up 13% from Feb. ‘11
Average Price: $161,143 • Up 4% from Feb. ‘11
Average Days on Market: 101 • Down 22% from Feb. ‘11

I tend toward optimism. The New Year is always quite appealing. It’s not that I believe there will be a sudden, magical turn in the way life works, ushered in by a herd of unicorns; I like the New Year in the same way I like clean, white sheets.
January is filled with energy, coming off of the seasonal rest we call the holidays. Things are wrapped up with shiny bows; gifts and year-end spread sheets. There is an ending, the ball drops, you rest, wake up and begin all over again. I love it. For many 2011 was a rough year; a devastating tsunami, a lingering doubt over the debt ceiling and our jobs. For others it was glorious; oppressive regimes were overthrown and the taste of freedom filled the air. The global economic uncertainty of the day can stop you in your tracks if you let it, but even Chicken Little eventually realized it was not the sky that was falling, but the rain.
Here in Denver, 2011 was not the worst year in the housing market. Though families still struggle to keep their homes, those numbers are receding and we are well beyond the “crisis”. Investors have stepped up (or rushed in) to purchase distressed homes, gentrifying neighborhoods and flipping them for first time buyers or building their portfolios with buy and hold strategies. Vacancy rates in Denver are under 2%, making landlords very happy. This is all good news as the housing market recovers from the ground up.
We begin 2012 with the standard economic indicators up; consumer confidence, GDP, retail sales, housing starts and existing home sales, while the unemployment is slightly down. The good news kibble:
• Pending Home Sales index from the National Association of Realtors (NAR) went UP 7.3% in November, hitting its highest level since April 2010!
• NAR’s chief economist commented, “Housing affordability conditions are at a record high and there is pent-up demand from buyers who’ve been on the sidelines. The sustained rise in contract activity suggests that closed existing-home sales should continue to improve in the months ahead.”
• The S&P Case-Shiller index for October showed minor price drops in 19 of the 20 surveyed metro areas, but the index was UP 1.9% from its post-crisis low in March 2011.
I am a news junkie, constantly scanning cable news shows and internet sources to see what the ‘experts’ have to say and to learn both sides of the issue. Lately, where real estate is concerned, everything I watch says yes. Even the “con” side says “yes with caution”, which makes perfect sense to me.
As we head full gallop into an election cycle, we can expect to be pummeled for the next ten months with tales of silver linings, predictions of doom. That’s their job. Mine is to help people buy, sell and invest in real estate, creating wealth in the process. Cue the Unicorns.