scroll down for stats and more real
estate information
Wishing you a Joyous Year
FULL of Happiness!
Sunday
March 7, 2010
Five Reason We Believe It's Going to be a Good Spring
A year ago this time, this headline wasn’t imaginable. We were in the throes of
one of the worst recessions of our time and the market was at a near standstill.
But what a difference a year makes. Today our market is seeing drastic signs of
recovery and we are finally moving in a positive direction. To build on that
momentum, I’ve put together my top five reasons why I believe it’s going to be a
good spring real estate market. Only time will tell if my theory is correct but
until then, let’s take a look at the facts:
1. Tax Credits Are Helping Drive the Entry Level Market – Thanks to the $8,000
first time home buyer tax credit and the $6,500 existing home buyer tax credit,
we are seeing some very strong signs of recovery in these two market niches.
With the impending expiration set for April 30, we anticipate that the next two
months will bring a surge of buyers looking to get in on a home prior to the
credit’s expiration. That results in good news for our market and will help to
decrease some of the surplus inventory and bring greater demand for those entry
level sellers.
2. Interest Rates Remain Low – Even though we have seen interest rates tick up a
bit in recent months, rates are still relatively low. When rates are low, it
means a buyer has increased purchasing power and ultimately can get more home
for less money.
3. Affordability Remains High – Due to the market correction we’ve seen over the
last few years, affordability remains quite high. What this means is a larger
percentage of individuals are able to purchase a home.
4. Despite Unemployment Figures, Housing Demand Will Eventually Rise – Yes,
unemployment figures are high comparative to the earlier part of the decade. In
fact, on a national level, the latest counts were approximately 9%, according
the United States Bureau of Labor. Here in Colorado we’re running at about a
7.7% unemployment rate. While yes I would agree that the number is concerning,
on the flipside it means that 93% of Coloradans are employed. If the economic
outlook continues to improve, that’s going to boost the confidence of the 93%.
That’s a lot of people who can boost housing demand.
5. Colorado is an Awesome Place to Call Home – It sounds a little trite and yes,
I may be a bit biased, but it’s a fact. Colorado offers one of the most diverse
and unique living experiences and economies in the country. From our beautiful
terrain, our diverse blend of activities and our overall thriving economy, we
are fortunate to live in somewhat of a thriving microclimate comparative to the
rest of the country. That all adds up to a demand for housing that will help to
drive our market towards recovery, possibly sooner than other states.
Let me remind all of us that the current housing is in a place of recovery.
Overall what we’re seeing is a tale of two markets. The luxury market is
generally seeing increased inventory and price discounting is the norm. Last I
checked we had far above a six-month supply of inventory of our luxury homes. In
some cases anywhere from 9-12 months+.
However, if you look at our entry level market, things really haven’t slowed
down much at all. In fact, in many cases, they’re rising! We’re still seeing
lots of interest for well-priced properties in good neighborhoods.
Overall, the state of the housing market in Colorado remains relatively healthy
and strong and I believe we have a good Spring ahead.
February is already shaping up to be a better month.
==>>Colorado Cities (Appreciation Rate/Rank) Third Quarter 2009
==>>2009 Housing Appreciation By State
NEWS TIP
==>>The estate tax disappears completely in 2010
Starting in 2010, the existing $100,000 income test for converting a
traditional IRA to a Roth IRA will no longer apply. Conversions that occur
in 2010 will be able to have half of the taxable converted amount taxed in 2011
and the other half taxed in 2012.
http://online.wsj.com/article/SB126004888014078557.html
scroll
down for stats and more real estate information
|
Homebuyer Tax Credit Quickly Approaching |
Denver Real Estate Report |
|
30-Year Fixed Rate Mortgages Since 1971 |
2009 Denver Metro Economic Update |
|
2010 Outlook; Interview with
Coldwell Banker's President Chris Mygatt |
REAL ESTATE STATISTICS |
|
Tax Credit
Extension for First-Time Home Buyers and Existing Homeowners |
Denver Mountain Real Estate Statistics |
|
Are
we heading towards a housing recovery? |
Mountain Overview |
|
Denver's
Existing Homes Prices Outperform Other Cities |
Denver Mountain Monthly Comparison by MLS Area through December 31, 2009 |
|
SHORT
SALES: The Long and Short of It |
updated February 27, 2010 |
|
First-Time Home Buyer Tax Credit |
Bailey & Pine Colorado |
|
Now May Be
the Time to Buy, What Are You Waiting For? |
Conifer Colorado |
|
Do
Mortgage Rates Affect Purchasing Power? |
Golden CO
Mountain and Metro |
|
Emergency Economic Stabilization Act 2008 |
Idaho Springs Colorado |
|
Purchasing Bank Owned Properties |
Morrison Colorado |
|
10 Reasons to
Consider Buying NOW |
North
Evergreen
|
|
Positive Signs in the Real Estate Market |
South
Evergreen |
|
Is the Worst
Over? |
|
|
The
Facts About Real Estate |
Denver/Metro Real Estate Stats |
|
Neighbor's Foreclosure Cost You? |
Denver Real Estate Report |
|
Think Locally when Gauging the Market |
updated February 27, 2010 |
|
Maintaining the Value of Your Home |
Denver Colorado |
|
Beware of Reverse Mortgage Scams |
Golden Colorado |
|
2008 Home Sales |
Lakewood Colorado |
|
Coldwell Banker Achieves Top Ranking |
Littleton Colorado |
|
How's the Market? |
Morrison Colorado |
|
Ten Predictions for Buyers and Sellers |
|
|
Selling in a Down Market |
Denver's Economic Review |
|
Sub Prime Lender & Appraisals |
Denver's Economic Summary November 2009 |
|
1031 Exchange Do's and Don'ts |
Denver Metro 2009 Economic Overview |
|
Student housing a good investment |
Denver's Economic Summary August 2009 |
|
Why do I need a title report? |
Denver's Economic Summary June 2009 |
|
Marketing
Statistics |
Denver's Economic Summary May 2009 |
|
2007 Real Estate Contract Changes |
Denver's Economic Summary April 2009 |
|
Closing Costs Explained |
Denver's Economic Summary March 2009 |
|
Skier's Stew |
Denver's Economic Summary February 2009 |
|
Thank You! |
Denver's Economic Summary January 2009 |
|
Price Your Home Right |
Denver's Economic Summary December 2008 |
|
Pricing Decisions |
Denver's Economic Summary November 2008 |
|
Real Estate Investors |
Denver's Economic Summary October 2008 |
|
|
Denver's Economic Summary September 2008 |
|
Coldwell Banker Information |
Denver Metro
Economic Summary August 2008 |
|
Coldwell Banker Client
Benefit |
Mile High Market Watch March 2008 |
|
Coldwell Banker Leaders on the Web |
|
|
Coldwell Banker
Number 1 in Colorado |
click here for
2008 Market Stats Vs 2009 |
|
Coldwell Banker Television Show |
|
|
The
Power of Television Advertising |
2009 Mountain Market Stats |
|
|
October 2009 |
|
Real Estate Information |
September 2009 |
|
Prevent
Identity Theft |
August 2009 |
|
Renting vs. Owning |
June 2009 |
|
26
Reasons to Hire a Realtor |
May 2009 |
|
History of Mortgage Rates |
April 2009 |
|
Short Sale
Transactions |
March 2009 |
|
Home
Improvements That Can Pay Off |
February 2009 |
|
Colorado Foreclosure
Timeline |
|
|
Common Ways to Hold
Title |
2008 Mountain Market Stats |
|
Colorado Property Taxes |
October 2008 Mountain Market Stats |
|
Closing Fees at a
Glance |
September 2008 Mountain Market Stats |
|
Radon Myths |
August 2008 Mountain Market Stats |
|
Senior
Property Tax Exemption |
July 2008 Mountain Market Stats |
|
|
June 2008 Mountain Market Stats |
Active Inventory vs Sold Listings
2007-2008 (Single Family Residence) |
May 2008 Mountain Market Stats |
|
Golden CO, 80401 |
April 2008 Mountain Market Stats |
|
Evergreen CO, 80439 |
March 2008 Mountain
Market Stats |
|
Conifer CO, 80433 |
February 2008
Mountain Market Stats |
|
Morrison CO, 80465 |
|
|
Pine CO, 80470 |
2008 & Earlier Metro Market Stats |
|
Bailey CO, 80421 |
Denver Metro Real Estate Stats for 2008 |
|
Idaho Springs, CO 80452 |
December 2007 Real
Estate Stats |
|
Lakewood, CO 80226 (Near Belmar) |
Number of Units
Under Contract 2005-2007 |
|
Lakewood, CO 80228 (Near Bear Creek Village) |
|
|
Lakewood, CO 80232 (Near White Fence Farm) |
|
|
Littleton, CO 80123 (Near Grant Ranch) |
|
|
Littleton, CO 80125 (Near Roxborough Park) |
|
|
Littleton, CO 80127 (Near Ken Caryl) |
|
|
Denver, CO 80211 (Near Highlands) |
|
|
Denver, CO 80210 (Near Washington Park) |
|
|
Denver, CO 80206 (Near Cherry Creek) |
|
scroll down for stats and more real estate
information
Friday,
February 19, 2010
Colorado Home Prices Up! Plus, February Is Off to a
Great Start!
This week NAR released its fourth quarter 2009 housing stats revealing some
solid and very positive results including:
• Home sales posted strong gains in the fourth quarter and prices rose in nearly
45% of U.S. metropolitan areas compared with a year earlier, more evidence of an
improving climate in housing.
• Bolstered by low interest rates and a first-time home buyer tax credit,
existing-home sales rocketed 27.2% from the fourth quarter of 2008 to a
seasonally adjusted annual rate of 6.03
• The national median price of an existing single-family home was $172,900 or
4.1% below the median price in fourth quarter 2008. That was the smallest price
decline in more than two years.
• Prices rose in 67 out of 151 metro areas in the fourth quarter compared with a
year earlier.
• Sixteen areas had double-digit increases last quarter.
• Some of the positive Colorado markets that saw the biggest gains?
Median home prices of existing single family home by metro area
Not seasonally adjusted; prices in the thousands
Metropolitan Area
2007 2008 2009 % Change
Boulder $376.2 $324.7
$335.1 3.2%
Colorado Springs
$217.5 $187.0 $189.8 1.5%
Denver-Aurora $245.4 $200.8
$223.2 11.2%
In looking at January, the early numbers are
in and it seems sales figures overall for January are down from the previous
month. Having said that, a decline in sales between December and January is
normal for the season. What the January figures show us is the market lost some
of the momentum it had built up in the second half of ’09, when home buyers
rushed to ensure they could take advantage of a tax credit, ultra-low mortgage
rates and lower prices. I anticipate that over the next several weeks those
numbers will once again increase as more and more buyers scamper to get in on
the market prior to the April 30 first-time home buyer and existing home buyer
tax credit expire.
Friday,
February 5, 2010
NAR’s Pending Home Sales Report Reveals Tax Credit Is Working
This week the National Association of Realtors released its pending home
sales report revealing that contracts signed in December increased 1.0 percent
to 96.6 from 95.6 in November and remains 10.9 percent above December 2008 when
it was 87.1. December activity was the fifth highest monthly tally in two years.
NAR is chalking much of this surge up to the tax credit as buyers responded to a
tax credit that was expiring and then extended and expanded. These swings, they
say, are making the underlying trend, which is a broad improvement over year-ago
levels.
The fact is there are a lot of first-time home buyers and even some existing
homeowners who are vying to take advantage of that credit and that is helping
our local market.
One thing I think we will see this year is a much earlier Spring selling market.
The spring buying season typically takes off in March and runs through May. But
buyers who want to claim this year's tax credit — up to $8,000 for first-time
buyers and up to $6,500 for repeat buyers — must have signed purchase contracts
by April 30. And they have to complete the deal by June 30. I agree with
Coldwell Banker President and CEO Jim Gillespie who said “Sales are going to
take off in February and March and really take off in April,” as home buyers try
to get under contract by the April 30 date.
It is comforting to see how many consumers are realizing the opportunities to in
today’s market—even many investors. There are amazing opportunities and great
deals to be had and as buyers come to this realization, it’s exciting to see how
it is affecting our market.
Wednesday,
February 3, 2010
The time to BUY IS NOW!!!
Rates to Rise after March
TheFed repeated its announcement last week at the conclusion of it meeting
that the Fed will conclude the $1.25 Trillion MBS Purchase Program by the end of
March.
What does this mean to the market? HIGHER RATES
For the past several months, dating back to Dec 2008 (See Chart Below), the
Federal Reserve has been on a buying campaign to keep interest rates low. The
success of the program is evidenced below by the chart; rates ended 2009 with
the lowest average in history at 5.04%. The next lowest year was 2003 ending at
an average of 5.83%. The way this works is the Fed participates in the open
market as a buyer of Mortgage Backed Securities (MBS) increasing the demand for
the securities which creates a lower rate of return on the security which
translates into lower interest rates for new Mortgages being issued. If the
demand is decreasing for MBS the interest rates for Mortgage is increasing
because the investors will require a higher rate of return to purchase MBS. The
recent stabilization of low interest rates was the result of this campaign and
when it is eliminated we will most likely see greater swings in interest rates
from day to day and week to week, the end result of which will be higher
interest rates.
|
CONVENTIONAL, CONFORMING 30-YEAR FIXED-RATE MORTGAGE SERIES SINCE
1971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
2009 |
|
|
|
|
Rate |
Pts |
|
Rate |
Pts |
|
Rate |
Pts |
|
Rate |
Pts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January |
6.15
|
0.5
|
|
6.22
|
0.4
|
|
5.76
|
0.4
|
|
5.05
|
0.7
|
|
|
February |
6.25
|
0.6
|
|
6.29
|
0.4
|
|
5.92
|
0.5
|
|
5.13
|
0.7
|
|
|
March |
6.32
|
0.6
|
|
6.16
|
0.4
|
|
5.97
|
0.5
|
|
5.00
|
0.7
|
|
|
April |
6.51
|
0.6
|
|
6.18
|
0.5
|
|
5.92
|
0.4
|
|
4.81
|
0.7
|
|
|
May |
6.60
|
0.5
|
|
6.26
|
0.4
|
|
6.04
|
0.5
|
|
4.86
|
0.7
|
|
|
June |
6.68
|
0.5
|
|
6.66
|
0.4
|
|
6.32
|
0.7
|
|
5.42
|
0.7
|
|
|
July |
6.76
|
0.5
|
|
6.70
|
0.4
|
|
6.43
|
0.6
|
|
5.22
|
0.7
|
|
|
August |
6.52
|
0.4
|
|
6.57
|
0.4
|
|
6.48
|
0.7
|
|
5.19
|
0.7
|
|
|
September |
6.40
|
0.5
|
|
6.38
|
0.5
|
|
6.04
|
0.7
|
|
5.06
|
0.7
|
|
|
October |
6.36
|
0.4
|
|
6.38
|
0.5
|
|
6.20
|
0.6
|
|
4.95
|
0.7
|
|
|
November |
6.24
|
0.5
|
|
6.21
|
0.4
|
|
6.09
|
0.7
|
|
4.88
|
0.7
|
|
|
December |
6.14
|
0.4
|
|
6.10
|
0.5
|
|
5.29
|
0.7
|
|
4.93
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Avgs: |
6.41
|
0.5
|
|
6.34
|
0.4
|
|
6.03
|
0.6
|
|
5.04
|
0.7
|
|
Tax Credit Ending
==>>Homebuyer
Tax Credit Quickly Approaching
Buyers must be Under Contract by April 30th, 2010 and Close by June 30th, 2010
to qualify for the First Time Homebuyer Tax Credit and the Repeat Buyer Tax
Credit.
This will be here before we know it and with the increase activity in the
housing market under $500,000 it may become harder to find the right house for
your buyers.
For frequently asked questions visit the website
www.federalhousingtaxcredit.com
Sunday, January 24, 2010
FHA 90-Day Seasoning Rule Lifted!
Great News for Denver
Homebuyers & Investors
The Federal government is taking action to speed the housing market recovery
by lifting the FHA 90-Day Seasoning Rule with the hopes that it will speed the
resale of foreclosed properties. This is great news for Denver homebuyers
(especially first-time buyers) and investors, who up until now, have been
required to wait at least 90 days after the previous sale date before being able
to close with any buyer who has an FHA-backed mortgage.
Originally, the Department of Housing and Urban Development enacted the
regulation in an effort to discourage investors who were flipping houses and
driving up prices during the housing market boom a few years ago. However, the
rule’s unintended effect in today’s market has been to reduce the options of
first-time buyers who already are competing for a shrunken supply of homes for
sale.
Announced on January 15th, the one-year moratorium on the “anti-flipping” rule
will begin on Feb. 1st. Affectively, this will open a new pool of homes to
first-time homebuyers. It will also give buyers access to a broader array of
recently foreclosed properties. As an added bonus, it is not expected that this
will have much effect on home prices, further stabilizing the housing market.
Many investors are thrilled because opening up their business to FHA buyers
means they can now sell to anybody. That hasn’t always been the case, and FHA
buyers have often been left out of finding affordable homes that are move-in
ready. Today, next to FHA buyers, cash buyers make up much of the rest of the
active market, and many of them are speculators and investors. This new rule
will connect the two groups.
The new guidelines do require that investors who are reselling a home do not
profit more than 20 percent above their purchase cost, but those limits are
excepted if an independent appraiser confirms that renovations and repairs
justify the higher price.
It is expected that the suspension of this 90-day rule will grow the number of
transactions in coming months, and that will be good for our nation’s
communities, as well as the real estate market in the Denver area. More buyers
for investors will motivate investors to buy and renovate more houses, which
will serve to move the market forward.
Friday,
January 8, 2010
It is a New Year, but is it a new housing market?
We’ve all been reading the conflicting headlines. Some say 2010 will have
its challenges. Others say 2010 will be the start of good things to come. But
what’s the truth? How can we read through the pessimism and for that matter, the
rose colored glasses, to determine what is the truth?
Well, as we all know, only time will truly tell.
* Overall, 2010 will be the year we begin to build a foundation. Many experts
are predicting that the recession is nearly complete, if it isn’t already as
measured by a decline in negative growth. But the recovery is going to depend on
stimulus spending and doing more to facilitate job growth. As Leslie Appleton
Young said, “If we don’t create more direct policies to get people back to work,
this could go on much long.”
* Let’s start with foreclosures. We have a lot of work ahead of us and
much of that has to do with the state of the overall economy. Unemployment is
still high and while I think we’re better, we’re not healed. The latest U.S.
Bureau of Unemployment Figures show that unemployment rates were higher in
November 2009 than for the same period in 2008 in all 372 metropolitan areas.
What happens when people lose their jobs? They typically aren’t able to pay
their mortgages. There are also many people out there with adjustable rate
mortgages that just haven’t yet adjusted. If the government doesn’t step in and
those mortgages adjust, many people will find themselves in a short sale or
foreclosure situation. Fortunately the good news is that the government is
putting more pressure on the banks to work with homeowners and my hope is that
if that, combined with the government’s own work to help homeowners in trouble,
I think we’re on a better path with these foreclosures than we were a year ago.
* Interest rates. There are a lot of schools of thoughts with relation to the
future of interest rates. I tend to agree with many economists who believe that
last year’s record low interest rates, where some were able to secure a 30 year
fixed rate mortgage for under 5%, may be a thing of the past. Do I see them
taking a surge in 2010? No, probably not. CNBC Reporter Diana Olick wrote,
“Unless the government decides to extend its Fannie-Freddie purchase program or
do something else to juice the credit markets, mortgage rates will rise
steadily, probably leveling off somewhere around six percent” and I tend to
agree with that philosophy. Still a good place to be.
* The hottest market? The entry level market is by and large the hottest segment
of the housing market right now and in all honesty, probably will continue to be
in 2010. But, it was also the first to experience the downturn so it is
certainly easy to suspect that it would be the first to recover. What we know
about the entry level market is this:
o Homes saw a great deal of depreciation in this market
o This market was most affected by foreclosures and short sales
o Affordability is especially high in this market
o The inventory is low in the entry level market in many areas
I don’t see much of this changing in 2010.
I do see a trickle affect coming from the entry level market into the move-up
market. Many homeowners are looking to take advantage of the $6,500 existing
homeowner tax credit as well as the opportunity to cash in on a buyer’s market
in the entry level and a seller’s market in the move-up region. It really is a
perfect storm for this group and I hope more move-up buyers will consider that.
The luxury market is a very different market indeed. It was the last to be
affected by the market changes and in all likelihood it will be the last to
recover. Having said that, there are some very interesting pockets of success.
It really depends on the house, the neighborhood and the overall demand for that
market. We’ve seen instances where a million dollar home comes on the market
only to be snatched up within a few days. Then, others, just sit. It really
comes down to what the market will bear.
In the end, regardless of what the market may or may not be in the coming year,
the bottom line is, it may be a really great time to buy. Attractive interest
rates. Increased affordability. Tax credits. Higher inventories in some market.
In many instances, there hasn’t been a better opportunity to buy in decades.
Please don’t lose sight of that. If you are in a position to buy and are
considering do so, please do explore your options. I believe 2010 will be a year
of building a solid foundation on which to build. Don’t wait until it is too
late.
Denver Post, January 8, 2010
Denver Area Homes Resales Drop 12%
Thursday,
December 17, 2009
Happy Holidays and a Look Ahead
The following are excerpts from the Business Week article entitled
“A Housing Recovery Could Solidify.”
“Residential real estate prices have increased by about 5%, adjusted for
inflation, since the end of the first quarter. As the inventory of existing
homes for sale shrinks, a housing recovery could solidify. Sales have increased
sharply in some of the hardest-hit states.

In Most of America, Home Prices Creep Up
- A Lost Decade
Although home prices have been rising since March, after adjusting for inflation
they are only at levels first reached in 2001.

Fewer New-Home Sales
Existing homes now make up about 93% of all sales, vs. a long-term historical
average of about 85%.

Signs of Life in the Sunbelt—and
Elsewhere
Four states—Nevada, Arizona, Florida, and California—have seen double-digit
increases in sales volumes for existing homes since the end of 2008.”
So what does this mean and more importantly, the question of the day from so
many of you is, what’s next? While we probably are not
out of the woods yet, housing is showing signs of stability, markets are showing
signs of rational behavior and everyone is starting to understand the
fundamental problems that brought us here. I think the combination of those have
us on the right path. Are we going to suddenly see double digit appreciation in
2010? Probably not. But I think we are on a good, sustainable path that should
give us some modest growth in the coming year, largely in the most sought after
affordable and mid-level markets. In terms of the luxury market, I think only
time will tell. It was the last to feel the downturn and in all likelihood it
will be the last to recover. Knowing this, it is important to point out that
there are always pockets that are the exception. Real estate is local and there
are always going to be those sought after neighborhoods, those one-of-a-kind
properties, that just demand something different. What I can assure you is that
over the next year I’ll be watching the market closely and will keep you abreast
of changes as they happen.
Monday,
December 7, 2009
A Year in Review and 2010: A Real Estate
Forecast
After enduring three years of a declining real estate market, 2009 brought a
much needed break for the hard hit real estate sector. Driven largely in part by
the economic stimulus that helped the housing market emerge from the recession,
it leaves many of us wondering what is next for real estate. Will housing prices
rebound? Will the new extended and expanded tax credit be just what the doctor
ordered? Will the luxury market recover similarly to the entry level? I recently
sat down with Coldwell Banker Residential Brokerage President Chris Mygatt to
answer these questions and more as we discussed the 2009 housing market and what
we may expect in 2010.
How would you say the housing market faired in 2009? Did it live up to your
expectations or falter?
“Although it was a challenging year, I believe that it ended up being a year
of stability. It was a year of transition in many of our markets. We bounced
along a rough bottom but at the same time, we are really prepared for a modest
and consistent improvement. The second half of 2009 was when we finally saw a
jumpstart. I think that really stems from consumer confidence. At the end of the
day, what drives affordability is confidence. Does a buyer feel confident in
his/her employment and finances? If so, then buying a home is typically a good
option. Another way that the government is reinforcing the viability of buying a
home is by offering the tax credit.“
Do you feel the tax credit was an important factor in the market turnaround?
“Undoubtedly, the tax credit was an important factor in our market’s
turnaround. We didn’t really know this for sure until we started looking at the
number of closed escrows in September, October and November. The number of
properties that went under contract increased as we grew closer to November
30th, the original expiration date for that tax credit. It was a very clear
indication that once potential buyers realized they might miss out on the
$8,000, tax credit if they did not move quickly, many buyers got off the fence
and began to act. The number of property showings was up. The number of
properties that were sold was up. Then, we saw the extension of the tax credit
and we saw yet another market adjustment. I wouldn’t say that the market has
been slowing, but there has been a softening of the frenzy. I think as buyers
near the new expiration date of April 30, 2010 that they will once again begin
to act.”
Do you think the extended and expanded tax credit will solidify our market
recovery?
“Certainly the increased activity that we’ve had in the lower end market has
been good; but in and of itself it probably will not create a market-wide
recovery. To have a market- wide recovery, we have to be able to engage the
move-up buyer. We have to remind the move-up buyer that now may be the best time
in our history to step up to the higher priced homes. The new tax credit that
provides existing home owners with a $6,500 tax credit is certainly helpful but
many buyers need more than just a tax credit. They need to have the courage to
step up in today’s market. Those who do, may reap the best benefits. The fact
is, you probably have never gotten as much value, thanks to interest rates and
given what you’re earning, as you have in today’s market. Six months to a year
from now, we probably won’t be able to say the same. We are certainly
recognizing that the tax credit is a great thing. But it isn’t compelling enough
if a potential buyer isn’t confident in his/her finances or future employment.
For those who are confident, the tax credit should serve as a clear and
convincing message that now may be a great time to move-up.”
Why is it such a great time to move-up?
“It’s all about the power of leverage. The fact is that in most markets,
inventory is very low in the low priced home range. So buyers in that market are
often competing against other buyers for the same home making it more of a
seller’s market. However, it is a buyer’s market in the mid-level and upper end
markets so you truly get the best of both worlds when you choose to move-up.”
There is a lot of talk about the impact of inflation. Do you think people should
be concerned about it?
“Certainly people need to be aware that inflation is very likely. The
government has devoted a great deal of money to stimulate our economy and in
order to strengthen our dollar over time, inflation will be likely. With
inflation comes higher interest rates and ultimately less buying power for a
home buyer. But it all goes back to maximizing your opportunities now, in
today’s market. For those who have made a fortune in their lifetime, they were
always looking at the opportunity, today. In order to do so, you must sell where
the market segment is strong and buy where the market segment is weak. Today
that opportunity resides with the move-up buyer.
“Another important fact to note is how advantageous interest rates are right
now. Some buyers are able to qualify for 30-year fixed mortgages at under 5%.”
Do you think we’ve hit bottom?
“I think in many communities we probably have hit bottom. We are seeing
statistical evidence of it in the average sale price and in the number of homes
sold. Interestingly (and I think this may be contrary to what most people
believe), the communities that may have hit bottom are not necessarily those
that were hardest hit by foreclosures. The communities that are strongest today
are those that are clearly most desirable. When the market gets soft, the people
who in previous markets couldn’t afford their first choice market had to settle
for their second or third choices. But thanks to the opportunities in today’s
market, they are better able to buy into their first choice communities and
neighborhoods. It goes back to supply and demand. Those communities that have
good schools, good local economies, diverse activities and, overall, are just
considered more desirable places to live, are once again driving demand.”
What do you recommend to today’s home buyer?
“Buyers need to understand right now that the market is a little schizophrenic.
You know it is probably the time to buy and you also know that the market has
been challenged. But you may see that in certain markets, we’ve had lower prices
and decreasing numbers of available homes for sale. In that type of area, you
might expect to get a lower price than a year ago. But you also need to realize
that the market is picking up and that in many markets, we’ve probably hit
bottom. For example, if you want to be where the best schools, best hiking
trails and best parks are, that will probably be where the best recoveries are
likely to occur. To properly ride the wave, you should find the houses where
people want to be. The problem is that if you wait a year, you’re probably going
to run up against a lot of challenges: increased interest rates, increased buyer
demand, and lower available housing inventory. The combination of those factors
is what is creating more urgency in the more desirable markets today.”
What do you anticipate for real estate in 2010?
“What we’re going to see in 2010 is probably the more desirable neighborhoods
seeing a modest increase in sales price and a decrease in the number of homes on
the market. I predict that we are going to see an overall stabilization in the
marketplace. We are probably going to see on the whole a slight increase of the
average sales price of homes. We’re probably going to see a stabilization of the
market. We probably won’t ever return to the sales levels of 2005 and 2006
because so many of those sales were artificially created. Fortunately, I believe
that we are now on the right path toward modest, sustainable growth.”
When will the luxury market begin its turnaround?
“We should see a slight turnaround of the luxury housing market in 2010. We
believe that it will be the last market to turnaround. It was the last market to
experience a turn down and it will probably be the last market to experience an
upturn. As business and the economy strengthen, we’ll once again see a more
robust luxury market.
“The bottom line is there is a lot to be confident about in relation to the
housing market: the tax credit; attractive interest rates; buyer demand in the
entry level market; opportunities in the move-up buyer market; and sustainable
growth. It all adds up to what we anticipate to be a very productive 2010.”
If you would like more information about the opportunities that are available in
today’s housing market, please contact me today.
Thursday,
November 19, 2009
Housing Stats and a Little Turkey Trot…Happy Thanksgiving!
Some good news was released this week
from Fannie and Freddie: maximum loan limits will remain unchanged for 2010. The
Federal Housing Finance Agency announced that the maximum conforming loan limits
for mortgages originated in 2010 will remain unchanged from their 2009 numbers.
The maximum loan limits for counties across the United States can be found
here
(116 pages).
The news in the media over the last two weeks has largely been about the
potential benefits of the new expanded and extended home buyer tax credit which
opens the doors for existing homeowners to take advantage of a $6,500 tax
credit. There have certainly been quite a few articles regarding the tax credit
over the last two weeks. I did come across an interesting article on Reuters.com
which stated, “Up to 400,000 people bought a home for the first time due to the
credit, boosting first-time buyers to a record 47 percent of sales over the past
year, the National Association of Realtors has said. With the help of the
credit, existing home sales will rise 2 percent this year and 13.6 in 2010, the
group estimates.”
To say the least, 2009 was a very challenging year in real estate. The good news
is that after a very rough 2008 and early 2009, we started to see a positive
turn in the housing market as the year wore on, thanks in part to the first-time
home buyer stimulus and indications that the economy was starting to improve. So
now the big question of the day is, what will 2010 bring?
With the improvement we are seeing on Wall Street and the economic improvements
we are seeing on a global scale, things seem to be moving in the right
direction, which makes prospective home buyers feel more confident about their
future and the home they may choose to buy. So much of our business is affected
by consumer confidence.
Also on a positive note, the default notices are actually declining in Colorado.
But I would caution that we probably aren’t out of the woods as it relates to
foreclosures. With unemployment figures still frighteningly high, there are
still quite a few homeowners out there who are struggling with their payments.
And now there is a great deal of evidence that it isn’t just in the entry level
arena; it is also hitting the mid-level and luxury market, too.
The big question is when is the “shadow” inventory of already foreclosed homes
going to be released, now that the government has lifted the moratoriums on
foreclosures. Once we start to move through those properties, we should begin to
see a better, more solid grounding for the real estate market.
For real estate, this feels like more of a long “L” shaped recovery than a “U”
shape.
The fact is, we live in one of the most desirable regions in the world.
Certainly we’ve taken our fair share of hits over the last three years, but our
region’s desirability, economic vitality, culture, weather and overall market
conditions make it a sought-after place to live. We generally have a much
healthier economy. This, I believe will help drive our long, slow, modest
recovery.
I am encouraged by the progress we are making in the real estate market. As we
track sales activity, we are seeing more encouraging signs. Based on what we’re
seeing, we’re estimating that we can expect sales to moderate to a more
sustainable pace and we will probably see a modest rise in housing prices. Will
it be the double digit appreciation we saw in the earlier part of the decade?
Probably not. But this new normal is much more sustainable and a much healthier
foundation to build upon. It makes me excited about the future and gives us all
hope for a relatively modest and productive 2010.
Saturday, November 7, 2009
The Tax Credit Gets an Extension and an Expansion!
Existing Homeowners: Now’s Your Chance!
I am extremely pleased to share with
you an exciting new tax credit, designed for first-time home buyers and existing
homeowners.
The new bill calls for an incentive for existing homeowners who have owned their
current homes at least five years, making them eligible for tax credits of up to
$6,500 when they purchase a new home. First time homebuyers – or anyone who
hasn’t owned a home in the last three years – would still get up to $8,000. To
qualify, buyers in both groups have to sign a purchase agreement by April 30,
2010 and close by June 30.
The credit is available for the purchase of principal homes costing $800,000 or
less, meaning vacation homes are ineligible. The credit would be phased out for
individuals with annual incomes above $125,000 and for joint filers with incomes
above $225,000.
The credit would be extended an additional year, until June 30, 2011, for
members of the military serving outside the United States for at least 90 days.
As an industry, we are certainly pleased about this new tax credit. The key to
returning stability to the economy lies within the housing market, and this is a
meaningful credit that will create a strong foundation for future growth and
make a measurable difference over the next seven months in our economy.
Furthermore, tax credits like this only work by creating the sense of urgency to
take advantage of them. This is said to be the last extension of the home buyer
tax credit and I urge people – whether you’re a first time home buyer who has
always dreamed of having a home of your own or someone who has been gridlocked
in the challenges of our move-up market – to take advantage of this opportunity.
Now is the time! If you’d like to learn more, please contact me today.
Friday, October 30, 2009
It’s On The Table!
There’s no question. The government’s first-time homebuyer
tax credit has spurred a significant amount of sales this year and its positive
impact on the hard-hit housing market warrants an extension. Latest estimates
show that some 400,000 additional sales occurred this year due to the first time
home buyer tax credit, which is about 8% of all sales this year.
The latest news in the saga, The Senate has reached a compromise on extending
and expanding the $8,000 tax credit for first-time home buyers. While its
passage remains uncertain, the agreement would extend the existing credit for
first-time homebuyers, worth up to $8,000, while offering a new credit of up to
$6,500 for some existing homeowners. The reduced credit would be available to
all homeowners who have been in their current residence for a consecutive
five-year period in the past eight years. Lawmakers in Washington also raised
the qualifying income limits to $125,000 for single taxpayers and $250,000 for
joint taxpayers, from the current $75,000 and $150,000. Under the Senate
compromise, buyers must have sales agreements in hand by April 30, but they will
have until June 30 to go to settlement, said the sources. The measure still
faces votes in the full Senate and the House.
The U.S. Senate won’t vote until next week at the earliest. As soon as they do
we intend to create a piece that will allow you to communicate the news to your
clients.
Reports show that Senate action has been delayed by a Republican demand that a
vote be allowed on an amendment to end the Treasury Department’s Troubled Asset
Relief Program at the end of this year. But lawmakers say they want to prevent
home sales from slipping as the economy struggles to recover. And as I mentioned
in a previous edition of Weekly Market Watch, that is just what may happen if
lawmakers choose to let the tax credit expire.
On the flip side, the Democrats, along with the Obama administration are backing
it. “The success of the American economy is closely tied to the success of the
housing market; by helping to stabilize the housing market, the homebuyer tax
credit has helped to shore up the economy as it begins to recover,” said Baucus,
a Montana Democrat. “This would enable an even greater number of potential
homebuyers to take the credit.”
Thus far it seems to be doing its job. This week, Business Week reported “The
broad improvement in the housing indicators in recent months leaves no doubt
that the long-awaited housing recovery is finally under way.” The article went
on to report: “Policy alone cannot explain the 24% gain in existing home sales
since January, nor the 22% increase in new-home purchases, the 40% rise in
single-family housing starts, and the recent upturn in home prices.
The primary driver is historically high affordability. Fixed 30-year mortgage
rates are at 5%, a multi-decade low, and prices have plunged a total of 30%
since May 2006, based on the Standard & Poor's Case-Shiller Home Price Index. By
that price gauge, homes are well undervalued relative to both rents and aftertax
income.”
Thursday, October 22, 2009
“U.S. Economic Recovery on Track”
While we await the results of the possible expiration,
extension or expansion of the $8,000 first time home buyer tax credit, one thing
is for sure, the economy is moving forward in full force—which is driving
consumer confidence. Earlier this week, Reuters.com ran a very interesting story
on the U.S. economic recovery and the result was very encouraging. Among the
story’s highlights:
* “The U.S. economy is firmly poised for a recovery from its deep recession but
growth may be moderate and the job market will not revive immediately, senior
White House aide Lawrence Summers predicted on Wednesday.”
* “On the economy, Summers said the $787 billion stimulus package and inventory
rebuilding by businesses were among the “dominant drivers” lifting the economy.”
* “It will be some time before unemployment starts to decline. Once it declines
it will take a long time to return to normal levels, given how elevated it
is…The jobless rate is now at a 26-year high of 9.8 percent.”
* “Most private economists think the recession, which began in December 2007,
ended in the third quarter. But there is much disagreement about the path to
recovery.”
* “Some see above-average growth continuing through next year, arguing that deep
recessions are typically followed by powerful recoveries, helped along by
pent-up demand as consumers and companies resume spending.”
Obviously this is welcome news for the economy which ultimately benefits the
local housing market. What I can tell you is that I am encouraged by the
progress we are making in the real estate market. We’re beginning to see more
days of progress than days of back stepping. We’re watching sales activity and
consumer sentiment and we are expecting over the coming months a moderate to a
more sustainable pace and we will probably see a modest rise in housing prices
in the coming year. Will it be the double digit appreciation we saw in the
earlier part of the decade? Probably not. But this new normal (as we’re calling
it) is much more sustainable and a much healthier path to build upon. It makes
me excited about the future and gives us all hope for a relatively modest and
productive 2010.
Thursday,
October 15, 2009
Recent Housing Upturn Sparked By Buyer Leverage
The latest S&P/Case-Shiller home price index reveals home
price for 10 major cities rose 3.6 percent between April and July. So does this
recent up tick in the housing market mean we are on the cusp of a housing boom?
Probably not, in all likelihood, the recent upturn in the housing market has
been sparked by several competing factors:
· The impending expiration of the $8,000 first-time home buyer tax credit
· The recent up tick in the stock market
· Increased consumer confidence
· Continued low interest rates
Essentially, buyers are playing a leverage game. They’re watching the economic
indicators and trying to determine the best time (for them) to buy. It seems
many are now pulling the trigger which is causing sales figures and prices to go
up.
Will it last? It’s tough to say. Right now we’re in a slightly unique position
because some of the stimulus packages that the government instituted are working
which may be causing a false front for the overall economy. The stock market is
up. Consumer confidence is on the rise. The housing market is up. All of those
are pointing to some current benefits in the market.
But, the fundamentals themselves haven’t changed. Foreclosures remain a major
issue for our economy. And unemployment remains a major challenge. Until those
two areas of the economy fully recovery, we may see continued economic
volatility.
What I can say is I think the worst of the housing market’s problems are
probably behind us. But the road ahead isn’t completely clear. One major factor
that stands in our way is the impending expiration of the first time home buyer
tax credit. This credit has helped to drive much of our recovery. But right now
the debate on Capitol Hill continues and everyone is waiting to learn whether
the credit will be extended, expanded or will it simply expire. Many on the
opposing side believe it is too costly to finance. But NAR had this to say:
“Each home sale pumps an additional $63,000 into the economy through related
goods and services, so the benefits of extending and expanding the tax credit
far outweigh the costs.”
If the opposing side gets their way and the credit simply expires, NAR had this
to say: “All we can say for certain is sales will decline when the tax credit
expires because we are not yet on a self-sustaining recovery path. It also
raises a risk of a double-dip recession. Extending and expanding the tax credit
is the best tool in our arsenal to encourage financially qualified buyers to
stimulate the economy and help reduce the budget deficit.”
So there you have it. We’re in a state of flux as we await the results of the
credit. As that debate continues, buyers seem to be leveraging today’s market
advantages which is creating a welcome relief for our local market. Let’s just
hope the leveraging opportunities continue.
Thursday, October 1, 2009
S&P Reports On The State of the Housing
Market
One of the founders of what has really become the industry’s
(and media’s) bible for real estate statistics and forecasts, S&P Case Shiller,
recently participated in a Q&A about the state of the housing market. Robert
Shiller, a Yale University economist, discussed the housing market and the
implications of lower interest rates. I found it quite conservative yet
insightful and in my opinion, on target with what is going on in today’s market.
That is why for this edition of Weekly Market Watch, I am going to provide you
with an excerpt from his interview:
Is the slump in U.S. home prices bottoming out?
Shiller: The situation has definitely changed. With our numbers — the S&P/Case
Shiller home price index — going up sharply. It looks like a major turnaround.
We’ve been watching that for three months now, and we have some concern that it
could be an aberration and temporary. But, at this point, it seems to be evident
in just about every city in the U.S. That suggests it’s real. But it probably
isn’t the beginning of a major boom, just because the economy is in such bad
shape. There’s also a chance that it will reverse. It’s still only three months
old, so it’s very hard to be sure at this point. The most likely scenario is
that it won’t continue at this high rate of increase, but that it will neither
go down a lot, nor up a lot.
So the index will move sideways for a while?
Shiller: Yes, for a while, meaning five years.
What are the main factors driving U.S. house prices? What could push them up, or
cause another slump?
Shiller: The main factor is the world economic crisis and the efforts of
governments around the world to stimulate the economy. Parts of those efforts
have been directed at the housing market. In the U.S., there is an 8,000 dollar
first-time home buyer’s tax credit which expires at the end of November. That’s
a reason for concern, as it comes to an end. Also, the Federal Reserve has a
plan to buy $1.25 trillion worth of mortgage-backed securities to support the
housing market. They are most of the way through the program and anticipate
phasing it out at some time in 2010 - that’s another thing that will go away.
We’ve yet to see how the housing market will continue. Part of the problem is
that people are buying now rather than later. When later comes, there could be a
downturn in the market.
Is there an oversupply of houses in the U.S.?
Shiller: That’s been a problem. The inventory of unsold houses has been high,
but has come down a bit. On top of that, there will be more foreclosures, more
homes are going to be dumped on the market as people default. Now, that may show
down as home prices will start going up again. But I suspect that this isn’t
going to happen. Also, banks have more REO, or real estate owned, that they’re
holding on to for the time being. But eventually those REOs are going to be
dumped on the market. So that’s why it doesn’t look particularly encouraging
from a supply consideration.
Turning to interest rates, which are at exceptionally low levels: Is there a
risk that this eventually will cause irrational exuberance?
Shiller: There is always a risk of that. Those things are hard to predict.
However it seems like the present time is least conducive to bubbles of any
time. We’re in what some people call “pretend-and-extend” economy, which means
that banks that have commercial loans are often extending those loans and
pretending that the property is worth something. That’s because they don’t face
reality. This kind of economy isn’t really suited to a beginning of a real
bubble. Now, everything could change… It’s surprising how strong the
residential, single-family home market looks right now. It makes me think that
it’s hard to predict animal spirits.
Monday, August 31,
2009
So Much for a Sleepy Summer
Generally speaking the Colorado real estate
market has seen a bit of a bounce this summer with sales increasing in all
categories—from the entry level homes and condos to the high-end market.
National figures showed June with an 11% increase in home sales. But, realizing
that a majority of the spring home inventory has been introduced, we may start
to see a little slowdown in August/September as old inventory is taken off the
market and a smaller surge of inventory arrives.
In other words, there is still much recovery that needs to be taking
place. Sellers still need to get a bit more realistic about price and buyers
need to recognize a good bargain when they see it.
In general, most homes are on the market longer with discerning buyers waiting
for the optimal home at the optimal price. A well-priced, well-presented home
can still fetch multiple offers, but it’s got to look appealing to the savvy
buyers who are doing their homework. There is no sense in overpricing a listing
– a buyer won’t even give a home the time of day if they sense the seller is
being unrealistic. Yet at the same time, there seems to be no better time to
snatch up bargains in Colorado at all price points. We’re seeing five to 10
percent reductions in properties that are sitting on the market and in many
cases the final offers are coming in below those reductions. That’s not to say
buyers should throw out ridiculous numbers. Some sellers who don’t have to sell
are holding firm, but time is running out for others. So, while it may take
longer to get the buyer and seller to agree to terms, deals are happening and
with open minds on both sides, we might start to see more positive movement for
all.
For cash buyers or those with large (over 25%) down payments, now is a great
time to pick up bargains in luxury homes. Sellers are still not giving away
property but there are great deals available.
This week the National
Association of Realtors released its monthly existing home sales report
(http://www.realtor.org/press_room/news_releases/2009/08/strong_uptrend?LID=RONav0021)
noting “For the first
time in five years, existing-home sales have increased for four months in a row,
according to the National Association of Realtors®.” The report went on to
note, “Existing home sales – including single-family, town homes, condominiums
and co-ops – rose 7.2 percent to a seasonally adjusted rate of 5.24 million
units in July from a level of 4.89 million in June, and are 5.0 percent above
the 4.99 million-unit pace in July 2008. The last time sales rose for four
consecutive months was in June 2004, and the last time sales were higher than a
year earlier was November 2005.”
Lawrence Yun, NAR chief economist, said he was encouraged. “The housing market
has decisively turned for the better. A combination of first-time buyers taking
advantage of the housing stimulus tax credit and greatly improved affordability
conditions are contributing to higher sales,” he said.
Ultimately these are all very positive signs for our market and are a strong
sign that we are moving in the right direction towards a housing recovery.
Having said that, it’s important to keep things in perspective and not celebrate
too soon. We all need to be realistic with our pricing, buyers and sellers.
A few other interesting articles of note for the week:
•
Home Prices On An Upswing In The Second Quarter Of 2009 According To The
S&P/Case-Shiller Home Price Indices;
Case-Shiller
•
New Home Sales Blast Past Expectations;
CNNMoney.com
•
The Housing Market: Has It Turned the Corner?;
TIME Magazine
•
Mortgage Applications Increase In Latest MBA Weekly Survey;
Mortgage Bankers Association
•
Home Market Shows Signs of Life as Declines Slow;
Bloomberg
Housing Markets Most Likely to Rebound,
Denver #1
http://today.msnbc.msn.com/id/26184891/vp/30825142#30825142
Friday,
August 21, 2009
Good News On Wall Street
Doesn’t (Necessarily) Mean Higher Housing Prices on Main Street
Academically speaking, there is a belief that there is a direct correlation
between the housing market and the stock market. But from an analytical
standpoint, although the stock market and the housing market correlate well,
there is a variable time lag.
The
time lag between housing underperformance and stock market performance can vary
widely. The average is 18 months.
What
we’re seeing, in some instances, is that some of the upper-tier clients are
saying no to potential deals as they think if they wait another four to six
months (thanks to the stock market’s recent gains) they may get more for their
home. And while I understand the reasoning, I would caution sellers on this
strategy. First, what we know is that in a “normal” market (of which this market
is anything but), the average lag time between the two is 18 months (not four to
six months). It’s also important to point out that we probably aren’t out of the
woods as it
relates to the volatility in the stock market. Many analysts are
suggesting that our recovery will be “W” shaped rather than “V” so we may be
looking at more changes ahead.
So while I understand the
logic, I would caution sellers on this strategy and would ask them to focus less
on the stock market and more on the level of supply and demand in their market
and in their neighborhoods. In most markets, the upper-tier price point remains
relatively soft so sellers should consider most deals that are presented to
them. That’s not to say buyers should be throwing out unrealistic offers. The
real story here is that across the board we’re starting to see increases in
interest and buyer activity so
sellers may want to consider taking advantage of that interest…before it’s too
late.
For
those who are focused on the stock market, my best advice to you is to look at
it more as an indicator for the economy as a whole. With the DOW closing
Thursday at just over 9,300, it may not be making housing prices go up, but it
may mean that the recession is subsiding which is good news for us all.
Thursday,
August 13, 2009
They’re Saying The Worst is Behind Us…But Is It Too Soon to Celebrate?
NYtime.com website “Almost exactly two years after it
embarked on what was the biggest financial rescue in American history, the
Federal Reserve said on Wednesday that the recession is ending and that it would
take a step back toward normal policy.”
http://www.nytimes.com/2009/08/13/business/economy/13fed.html?_r=2&partner=rss&emc=rss&src=igw
.
The article goes on to note “Though the central bank stopped well short of
declaring victory, policy makers issue their most upbeat assessment in more than
a year by saying that the downturn appears to have hit bottom and that consumer
spending, financial markets and inventory building by corporations all continued
to stabilize.”
Having said that, here is what we tend to be seeing about the market:
•It does appear that the worst of the recession may be behind us.
•In all likelihood, the Fed is going to keep rates relatively low well into next
year by continuing to purchase mortgage backed securities and keep the Federal
Funds Rate close to zero. It is currently at .25%.
•In terms of conforming loan limits, as of right now, the higher conforming loan
limits will end at the end of this year. There is some legislation that is
pending to renew the higher loan amount through until November 2010 but as of
right now, that is pending. The same holds true for the first-time home buyer
tax credit.
Knowing this, what lies ahead? Well I would say it’s positive to know that the
worst may be behind us, but in all likelihood there are still challenges ahead.
There is still much recovery that needs to take place, so neither sellers nor
buyers should be getting too excited with the news. Sellers still need to get a
bit more realistic about price and buyers need to recognize a bargain when they
see it.
Thursday,
August 11, 2009
One Good Week of News Leads to Another
Following last week’s breaking housing news which revealed that based on the
Standard & Poor’s/Case-Schiller 20-city index, home prices in May posted their
first monthly increase since the summer of 2006.
The news followed reports showing sales of newly built and existing homes rose
in June for the third consecutive month. New home construction, though still
weak, is the best it has been since the fall.
Well this week the good news continued. The Mortgage Bankers Association (MBA)
released its Weekly Mortgage Applications Survey for the week ending July 31,
2009 showcasing an increase in mortgage loan application volume of 4.4 percent
from the week earlier. On an adjusted basis, the Index increased 4.1 percent
compared with the previous week and 18 percent compared with the same week one
year earlier.
The Refinance Index increased 7.2 percent from the previous week. The Index has
climbed about 35 percent above its recent low at the end of June. The seasonally
adjusted Purchase Index increased 0.9 percent from one week earlier.
Also interesting to note is this week’s release of the National Association of
Realtors’ Pending Home Sales Index in which it revealed an increase of 3.6%
during the month. That was 6.7% higher than June 2008. It was the fifth straight
month of increases, the first time that has happened since July 2003. The jump
was much higher than expected with a consensus of industry experts put together
by Briefing.com forecasting an increase of just 0.7%.
NAR’s Chief Economist Lawrence Yun had this to say, “Historically low mortgage
interest rates, affordable home prices and large selection are encouraging
buyers who’ve been on the sidelines.” It seems all of these incentives, much
like the Cash for Clunkers program, is finally pushing people off of the fence."
Thursday,
August 1, 2009
It was a positive week for our industry. It seemed everywhere you looked, the
media was reporting on some sort of positive indicator relating to the real
estate market rebound. It seems this week, the answer to the question is much
clearer.
For starters, Good Morning America ran a very good interview on Tuesday about
the state of the housing market. Liz Ann Sanders, the Chief Investment
Strategist for Charles Schwab was interviewed. Essentially what she said was
that we are in the process of bottoming out and “you have to go through less bad
on your way to good.” As I’ve said in my weekly updates, we’re seeing pockets of
significant strength and the housing market is really showing signs of recovery.
Our industry was the first to be hit by the market downturn and if all continues
on this path, we will be the first out. The turnaround won’t be happening
overnight. We probably won’t see housing numbers start to appreciate anytime
soon. But what we can relish in is Sanders’ conservative viewpoint that “we have
to see less bad for a while before we start to see some real positive gains.”
What we have right now is the bottoming out of our market. Speculators and
investors are competing with first time home buyers. Those individuals are going
to continue to gobble up the inventory—both REOs and regular, now much more
affordable starter homes. As we see this inventory deteriorate (again, over
time), we will continue to see that trickle into our mid-level and upper-end
price ranges.
Also interesting to note this week was the Standard & Poor’s/Case-Schiller
20-city index was released and in it, home prices in May posted their first
monthly increase since the summer of 2006. Prices rose from April in 13 of the
metro areas tracked, notably Cleveland, Dallas, Boston and the Bay Area.
The news followed reports showing sales of newly built and existing homes rose
in June for the third consecutive month. New home construction, though still
weak, is the best it’s been since the fall.
Although the index is rising nationally and locally, I would caution that this
doesn’t necessarily apply to homes across the board. For the most part, the
local gains are reflected more in the low-end side of the market, though we are
showing signs of improvement in the mid and upper end.
The 20-city home price index rose 0.5 percent from April to a reading of 139.8,
but it was still 17.1 percent below the reading of 168.6 in May a year ago. It
was the fourth consecutive month that the index indicated prices have turned the
corner and are heading back toward positive territory.
Thursday,
July 23, 2009
Existing Home Sales Up For Third Straight Month
The Question of the Day: Have We Bottomed Out?
Some are calling it the sign that we have hit bottom and are on our way back up.
Others are calling it a blip on the screen. Whatever your take, NAR released
Thursday its existing home sales report which showed three key, positive
indicators regarding the housing sector:
• For the third consecutive month, existing home sales rose
• Inventory is easing
• Home prices declined less sharply in June
The report noted, “Existing home sales…increased 3.6 percent to a seasonally
adjusted annual rate of 4.89 million units in June from a downwardly revised
pace of 4.72 million in May, but are 0.2 percent
lower than the 4.9 million-unit level in June 2008.
The report also revealed, “Total housing inventory at the end of June fell 0.7
percent to 3.82 million existing homes available for sale, which represents a
9.4 month supply at the current sales pace, down from a 9.8 month supply in May.
Raw inventory totals are 14.9 percent below a year ago.”
The Wall Street Journal reported Thursday a look at 28 major real estate markets
and where they are headed. The results
http://online.wsj.com/public/resources/documents/retro-HAGERTY.html were
interesting for Denver:
• A 19.6% decline in housing inventory (from a year ago)
• We are currently at a 6.1 month supply
• We’ve seen an 8.3% drop in price since the peak
Also interesting to note this week is the fact that Denver was named the No. 1
city where Americans are relocating, according to Forbes.com
http://www.forbes.com/2009/03/30/americans-moving-cities-lifestyle-real-estate-relocating.html?partner=email
Among the highlights of the story:
• Population increased by 2.17% in 2008; it increased 2.09% in 2007
• Denver was the 10th fastest growing metro area in the United States
• Denver is the most popular city in America; people like it for its skiing,
culture and vibrant nightlife as well as its business opportunities
• As of January 2009, the metro area’s unemployment rate was 6.5%; that’s high
but still two percentage points below the national average of 8.5% for the same
month
What all of this leads us to believe is despite some of the challenges we
continue to face nationally and globally, the domestic housing market continues
to demonstrate signs of recovery. The temporary first-helping people make a
decision and is contributing to the overall stimulus impact.
Are we out of the woods yet? It’s tough to say but the signs are encouraging and
three months of continued increases in home sales are a positive sign that we
may be on the road to recovery.
Thursday,
July 16, 2009
Realtor.com Survey Tells A Lot About Today’s Housing Market
Earlier this week, Realtor.com released a survey discussing what is
motivating buyers in today’s market. It was an interesting read and I thought
I’d share the highlights:
•“Price declines and low interest rates are motivating millions of home buyers
to shop for bargains in the most affordable housing market in 28 years, yet at
the same time only one in ten of today’s home owners say they have delayed
selling their home due to those same market conditions.”
•“Affordability is clearly driving more than two thirds (65.2%) of potential
buyers back into today’s housing market. Nearly one of five prospective buyers
(19.6%) say foreclosure bargains in their communities would motivate them to
purchase a home, the most important reason they’re interested in buying in the
near future.”
•“An additional 15.5 percent said they’re motivated to buy soon because they
think prices are as low as they will go and another 15.5 percent said they were
motivated to buy before interest rates rise. For 14.6 percent of first time home
buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in
the future.”
•“The survey also found most Americans are not aware of how affordable homes are
becoming in today's fast-changing housing market. More than three-quarters
(76.4%) of consumers think a median income family can afford only 50 percent or
fewer of the homes for sale in their area. However, in reality, a family earning
the national median income of $53,182 can afford nearly 75 percent of the
current homes for sale on Realtor.com.”
•“In the past year, the Housing Affordability Index maintained by the National
Association of Realtors has increased 29 percent overall and 19 percent for
first-time homebuyers, and is higher now than at any time in the 28 year history
of the index.”
"Value is clearly motivating potential home buyers, and today's new level of
affordability is still an under-appreciated reality that needs to be explored,"
said REALTOR.com President, Errol Samuelson. "The variety and quality of homes
currently within reach of the average American family is much greater than most
people realize. Making credit available to responsible borrowers and building
consumer confidence in the economy are now key factors in restoring vitality to
the nation's housing market."
In other interesting news this week, for the second consecutive month, Denver
fared the best among 20 U.S. cities reporting drops in home prices, according to
Standard & Poor’s/Case home-price index for 20 major cities dropped 18.1 percent
in April compared with April 2008.
Denver reported a 4.9 percent decline, better than Dallas and Boston, which were
down 5 percent and 7.7 percent, respectively.
"This was the least painful decline in the last six or seven months," said
economist Jeff Thredgold of Vectra Bank Colorado. "There is still some
additional weakness to come, but most of the pain is behind us."
Also interesting to note, as the Denver Business Journal reported, “Home prices
in Denver increased for the second consecutive month and show the lowest
year-over-year decline of the 20 cities included in the closely watched
S&P/Case-Schiller index.”
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 up tick 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.”
Monday,
June 12, 2009
Reinvigorating the Housing Market
This week there were
some exciting change of events going on with the government regarding a positive
development for the real estate industry. Specifically, the Business Roundtable
(an association of chief executive officers of leading U.S. corporations)—issued
a set of recommendations for the White House and Congress that are aimed at jump
starting the housing market in order to stimulate a broader economic recovery.
The Business Roundtable’s recommendations are as follows:
• Keep mortgage interest rates at historically low levels (below 5 percent) for
at least one year;
• Expand the current First-Time Homebuyer Tax Credit incentive from the lesser
of 10 percent of the purchase price of the home or $8,000 to a higher limit of
either 10 percent or $15,000 for all homebuyers, remove the income restrictions
and include all primary residence purchases for one full year;
• Conduct a thorough review of current foreclosure mitigation and
loan-modification programs in light of rising loan-modification re-default
rates;
• Make permanent the current temporary conforming loan limits; and
• Continue to review and strengthen government efforts already underway to
review and refine mortgage lending practices.
Targeted, demand-side solutions—such as the ones Business Roundtable is
recommending—will provide a critical next step for a housing recovery that will
help create jobs and boost the economy as a whole. To obtain a copy of the
Business Roundtable press release and its Housing Working Group’s detailed
recommendations, click here
http://businessroundtable.org/initiatives/leadership/housing_working_group .
To read an article that appeared in today’s online edition of The Wall Street
Journal containing an interview about the Business Roundtable’s recommendations
and why they are crucial to jumpstarting the housing market, click here
http://online.wsj.com/article/SB124460195604101021.html .
Monday,
June 8, 2009
Activity In the Entry Level and Mid-Level Markets Continues to Rise…For the
Entry Level Buyer, Are Bidding Wars Back?
Now that school is almost out, we’re finding many families are starting to look
at homes in anticipation of getting settled prior to next school year. Showing
activity, in many markets, has increased considerably.
Sellers are now getting their homes on the market and, in general, seem to be
quite knowledgeable regarding staging and pricing. The homes in the entry-level
market, for the most part, are moving well if they are in good condition and
fairly and competitively priced. Several Agents whose clients’ listings are in
the entry level market are reporting that they have had buyers lose out on homes
in bidding wars. The competition for well priced homes in good condition is
heating up and we are seeing multiple offer situations in most of our first time
home buyer markets.
Though we have seen sporadic increases in the upper end market, it is still
relatively slow on showings and closings but we do anticipate that that sector
will loosen somewhat if the economic news continues to show some stabilization
and an upswing.
Friday,
May 29, 2009
Memorial Day is Over…Soon-to-be-Summer Selling Season Off to a Good Start
With Memorial Day behind us and the busy summer selling season about
to begin, some interesting trends are landing in our laps.
First, NAR this week announced that existing home sales rose in April with
strong buyer activity, in, as expected, the lower price ranges. Nationally,
existing home sales increased 2.9% to a seasonally adjusted annual rate of 4.68
million units in April from a downwardly revised pace of 4.55 million units in
March, but were 3.5 percent below that 4.85 million-unit level in April 2008.
Most of the sales are taking place in lower price ranges but in a positive
trend, we are seeing increased activity in the mid-price ranges. This is all a
domino effect. A turnaround begins with the lower price range homes and once
that sector of the market is stabilized, we begin to see changes in the mid and
upper price ranges. The upper end, though we have seen increased activity, still
is slow but we fully anticipate that this will change over time, too.
Two local articles of interest this week:
• Denver Business Journal: S&P: Denver existing home prices outperform other
cities
http://www.bizjournals.com/denver/stories/2009/05/25/daily15.html
• Denver Post: Metro Home Slide Not Off Click
http://www.denverpost.com/search/ci_12455302
Thursday, May 21, 2009
NAR Announces Housing Affordability Highest
in 18 Years
This is one of
the best times to purchase a home in decades. Well this week the National
Association of Realtors underscored that fact with the release that nationwide
housing affordability jumped 10 percentage points during the first quarter of
2009 to its highest level since the series began 18 years ago, according to the
National Association of Home Builders/Wells Fargo Housing Opportunity Index
(HOI). The HOI showed that 72.5% of all new and existing homes sold in the
first quarter of 2009 were affordable to families earning the national median
income of $64,000, up from 62.4% during the previous quarter and up from 53.8%
during the first quarter of 2008.
For complete details on the report, click here:
http://www.nahb.org/page.aspx/category/sectionID=135
Tuesday, May 19, 2009 Denver tops on 'Today' show list of
cities poised for real-estate rebound
Denver Business Journal - by Mark Harden
Denver was named America's No. 1 city on the verge of recovery from the
real-estate slump in a segment Tuesday on NBC's "Today" show.
Real estate expert Barbara Corcoran, a regular guest on the show, said Denver
more than any other U.S. city is "clearly on a rebound."
"It's really the perfect real estate success story," she said. "It had one of
the highest foreclosure rates in the nation for years running, and now they've
cut that foreclosure rate in half and they've turned the corner."
Denver, Corcoran said, has "a vibrant downtown, it has a high employment base,
it has educated people, it has youth, [and] it has one of the biggest park
systems in the country.
"Everything about Denver is pointing up, up up," she added. "Prices are moving
up just now for the first time after seven years."
Rounding out Corcoran's list of cities poised for a real-estate rebound:
2. Raleigh, N.C.
3. Austin, Texas
4. Seattle
5. San Francisco
Corcoran said she included cities on her list on the basis of eight factors:
Job growth potential;
A growing population;
Good weather;
Lots of first-time buyers;
No overbuilding;
vital downtown;
A well educated population; and
Foreclosures earlier than other cities.
Stress Test Reveals There's More Work to be
Done May
8,
2009
Stress Test Reveals There’s More Work to Be Done By the Banks But
The Local Real Estate Market Continues to Thrive!
This week the results of the long-awaited Stress Test on the banks were
released. What the government hoped to accomplish through this Stress Test was
to determine how much more capital the banking sector would need to withstand
the recession—much of which was caused by residential mortgages and other
consumer loans such as credit cards. The result was that 10 of the nation’s 19
largest banks will need to raise a total of $74.6 billion in capital. The Stress
Test revealed that banks like Goldman Sachs and J.P. Morgan seemed to be better
positioned than Citigroup and Bank of America.
At this point, according to Kiplinger, “The stronger banks will actively do what
they can to return any money borrowed from the government to get out from under
restrictions on dividends and executive compensation. Their ability to sell
common stock to the public is far better than their weaker counterparts, who may
have to privately sell stock to investors or raise capital with so-called
mandatory convertible preferred shares.”
According to industry analysts, it seems that until the banks get back on their
feet, credit will continue to be tight. That leaves the Federal Reserve
responsible for filling in the gaps with its own lending programs aimed at
jump-starting lending.
On a brighter note, however, the real estate sector of our economy continues to
show some positive signs—a good symbol that the programs that the government has
put in place are helping. USA Today reported earlier this week that “More homes
for sale are attracting multiple offers as buyers pursue lower-price homes and
banks low-ball asking prices to attract competing bids on foreclosures.” It’s
exactly what we’ve seen locally.
Here are some links to some interesting, positive news stories from the week:
• USA Today: More homes get multiple offers; downturn may be nearing end (http://www.usatoday.com/money/economy/housing/2009-05-05-foreclosure-home-sales_N.htm?loc=interstitialskip)
• Business Week: Want to Sell Your Home? Lower Your Price
http://www.businessweek.com/lifestyle/content/may2009/bw2009055_075566.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis)
• RISMedia: Relocation.com Survey Shows Consumers Moving Further Due to Economy
(http://rismedia.com/2009-05-05/relocationcom-survey-shows-consumers-moving-further-due-to-economy/)
– This is a good reminder to consumers on why they should choose an Agent who is
affiliated with a large, global real estate company that has the breadth and
influence to reach the largest pool of buyers.
• NYTimes: Where Home Prices Crashed Early, Signs of a Recovery (http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html?_r=2&hp)
• Realty Times: Real Estate Outlook: Sales Rising in Some Areas (http://realtytimes.com/rtpages/20090505_realestateoutlook.htm)
Housing
Sales Rebound May 5,
2009
Pending homes sales nationwide rose an unexpected 3.2% in
March. Apparently the low rates and tax credit for first time buyers are
creating traction. In addition, construction spending rose .3%.
Although this was mainly due to government projects it was the first increase in
6 months. Lastly, Fed Chairman Bernanke suggested in Congressional
testimony today, that he expects the economy to turn positive late this year.
However he cautioned growth would remain sluggish for quite some time.
Is the End Near?
April 30,
2009
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
www.Economy.com, even ventured (jokingly) a date when home prices
would stop falling—December 15, 2009.”
==>>Prices
cut on 1 in 5 homes April 24, 2009 Denver Post
April 23,
2009
The National Association of Realtors said Thursday that home sales fell
3% in March from February, to an annual rate of 4.57 million, from a downwardly
revised pace of 4.71 million units in February. Sales had been expected to fall
to an annual pace of 4.7 million units, according to Thomson Reuters.
http://www.usatoday.com/money/economy/housing/2009-04-23-existing-home-sales_N.htm?csp=usat.me
_______________________________________________________________________
First Time Home Buyers are Finally Fueling the Come Back!
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.
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.
==>>Denver
Resists Price Swings April 5, 2009 Denver Post
April 10,
2009
We awoke Thursday morning to some very positive
economic news—Wells Fargo reported a better-than-expected first quarter profit
of $3 billion surging the company’s stock by 32% and boosting shares of many
other big banks as investors bet that Wells Fargo’s peers may also post results
that exceed Wall Street’s estimates. The hope by all involved is that the
banking sector is stabilizing. Much of Wells Fargo’s recent success is in part
related to the recent increases in mortgage loan applications which could be a
strong sign that consumer confidence is on the rise.
Also revealed this week is the fact that new jobless claims fell more than
expected. The Labor Department said Thursday that the tally of initial jobless
claims fell to a seasonally adjusted 654,000 from a revised 674,000 the previous
week. Analysts expected claims to drop to 660,000
This week there were so many positive headlines that, rather than provide you
with my ongoing synopsis, I thought I’d give it to you straight from the horse’s
mouth. Yes, even the media is now on board with the positive headlines which
tells me that the market is definitely changing.
New jobless claims, trade gap fall; retailers see signs of hope;
http://www.usatoday.com/money/economy/2009-04-09-jobless-trade_N.htm
Big rally on Wall Street;
http://money.cnn.com/2009/04/09/markets/markets_newyork/index.htm?postversion=2009040918
The case for buying a home right now;
http://online.wsj.com/article/SB123913901841798375.html
With affordability up, home buyers are returning to the market;
http://www.nahb.org/news_details.aspx?sectionID=0&newsID=9000
Outlook on economy is brightening;
http://www.nytimes.com/2009/04/07/us/politics/07poll.html?_r=1&scp=23&sq=economy&st=nyt
Real Estate Outlook: Promising Numbers;
http://realtytimes.com/rtpages/20090407_realestateoutlook.htm
Denver: 10 Cities Where Americans Are Relocating;
http://www.forbes.com/2009/03/30/americans-moving-cities-lifestyle-real-estate-relocating_slide_2.html?thisspeed=25000
March 30,
2009
This week, according to Reuters.com, U.S.
mortgage applications jumped as record low interest rates spurred a surge in
demand for home refinancing loans. The Mortgage Bankers Association said its
seasonally adjusted index of mortgage applications, which includes both purchase
and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March
20. Refinancing accounted for 78.5 percent of all applications.
Furthermore, interest rates on mortgages fell after the Federal Reserve last
week said it would buy Treasury securities for the first time in more than four
decades as well as more than double its planned purchases of mortgage-related
securities.
www.Reuters.com
reported that “Borrowing costs on 30-year
fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26
percentage point from the previous week, reaching a record low….Interest rates
were well below year-ago levels of 5.74 percent.”
Meanwhile, according to Realty Times, housing starts took a surprise jump of 22
percent in February over January's depressed levels. Most of the increase was
attributable to apartments and condominiums, but single family starts were up by
one percentage point, and new home permits were up by 11 percent, after months
of sharp declines.
Existing home sales are also seeing some good trends. NAR reported this week
that sales activity for single family, town homes, condominiums and co-ops rose
5.1 percent to a seasonally adjusted annual rate of 4.72 million units in
February from a pace of 4.49 million units in January.
March 20,
2009
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.
March 17,
2009
With real estate’s traditionally
busy Spring selling season right around the corner, what do we expect March-June
to do for our market this year? Well as much as I’d love to say that we
anticipate a sudden, overwhelming surge in sales and that all of our challenges
are behind us, I won’t. What I can say is that we are seeing some bright spots
thanks to heightened consumer confidence, following the recent legislation
passed by the Obama administration. January and much of February had many buyers
sitting on the fence as they awaited the results of the Economic Stimulus
Package. The lowering of interest rates, induction and improvement of the home
buyer tax credit, reduction in preventable foreclosures and reinstatement of the
higher loan limits now have some buyers getting off the fence.
For buyers who are out there and
are considering buying right now, if you plan to stay in your home for a long
period of time, you probably can’t go wrong purchasing today. Though we
anticipate moderate home sales in the near term, buyers are ultimately expected
to respond to much improved affordability conditions as well as the $8,000
first-time home buyer tax credit and the market will pick up. It’s just a matter
of time. And when it does, that pick up will translate into more competition,
less inventory and possibly higher home prices, resulting in less purchasing
power for you. Consider my advice: waiting may cost you.
What I’ll leave you
with this week is a reminder that, for buyers, opportunity is knocking this
Spring. Buyers need to be aware of today’s advantages—attractive interest
rates, increased affordability, sizeable inventory, increased loan limits,
$8,000 first time home buyer tax credit and motivated sellers. The stars
couldn’t be more perfectly aligned.
For sellers, pricing is
key. Homes that are priced well (really well) and show well, are selling. Home
that aren’t, sit. Consider this as you prepare your home for market and please,
take my and your Agent’s advice, and don’t test the market. Price your home
well from the beginning to generate the largest pool of potential buyers.
March 3,
2009
First-Time Homebuyer Tax Credit
As you may have heard, significant improvements in the temporary
First-Time Homebuyer Tax Credit were signed into law on February 17, 2009 as
part of the
American Recovery and Reinvestment Act of 2009 to provide a housing
stimulus for first-time home purchases that occur between January 1 and December
1, 2009.
This is even better news for first-time homebuyers than the tax credit announced
in April 2008 because not only has the tax credit maximum increased from $7,500
to $8,000—but more significantly—it does not need to be repaid unless the
individual re-sells the home within three years.
There are several notable points about this
federal income tax credit and they are:
-
Credit maximum was increased from $7,500
to $8,000. The credit is calculated as 10% of the purchase price. Example:
If the purchase price is $70,000, the credit is $7,000.
-
Removed the repayment requirement,
provided the homebuyer does not resell the home for three years.
-
Eligibility remains for first-time
homebuyers only. In this case, a first-time homebuyer is defined as an
individual who has not owned a primary home at any time during the three
years prior to purchase, but who may have done so prior to that time.
Although certain income limits do apply, the amount of the credit is the
same for all taxpayers, married or single.
-
To be eligible for the full tax credit,
the homebuyer can have an annual adjusted gross income of no more than
$75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted
gross income above that level and up to $95,000 ($170,000 on a joint return)
is eligible for a reduced tax credit.
-
The tax credit can be claimed on one’s
individual or joint tax return for the purchase of any single-family home
between January 1, 2009 and December 1, 2009. It can be claimed on a 2008
tax return (to be filed by April 15, 2009), an amended 2008 tax return, or a
2009 tax return. Individuals should consult a professional tax advisor for
exact tax calculations and timing.
February
28, 2009
Let’s look at the numbers for the
Denver market as reported by Metrolist for the first month of 2009.
==>>Click here for Denver/Metro
Real Estate Report
Total properties closed in January were down 17.3% over last year. Average sales
prices continue to decline with a 16.3% decrease in January year-over-year. The
million dollar sales continue to see tough times with units closed down more
than 51% for January. But, we did see a 19.4% reduction in inventory for the
month of January. This brings us to more than seven straight months of 20%
decreases, which remains to be a very positive trend. Mortgage rates at
historical lows, coupled with record low home prices and the signing of the
recent stimulus bill, may position the state of Colorado for real estate
recovery in 2009.
February
20, 2009
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/News200902190
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 servers and
mortgage investors to modify loans to affordable monthly payments.
I know many are wondering if this new program will help. Official guidelines of
the plan won’t be unveiled until March 4. 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
==>>Bloomberg Reports
U.S. Pending Home Resales Rise as Prices, Rates
Drop
Bloomberg reports, "More Americans signed contracts to buy previously owned
homes in December for the first time in four months, signaling slumping prices
may be boosting demand."
February
6, 2009
The coming week will
likely be an interesting one in Washington, D.C. as lawmakers make the final
decisions on the Economic Stimulus Package. It will be exciting to see the
details unfold and the plan take shape as lawmakers work to quickly restore our
ailing economy.Locally, we’re seeing some
interesting trends. As we continue to work through our bank owned properties,
it is a welcome sight to finally see banks responding to short sale offers.
Couple that with the fact that with interest rates so low, buyers—especially
first time home buyers and some investors—are finally beginning to feel the need
to come off the fence and take action. The hardest hit markets are new
construction and the upper end. Both are nearly at a stand still though as
prices begin to stabilize and we finally weed through the bank owned properties
(later this year), we should begin to see a domino effect that ultimately
benefits all price ranges."