You are currently browsing the monthly archive for February 2010.

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%

What does all of this tell us?  There is definitely a growing amount of evidence that the housing market has stabilized.  Just look at Denver-Aurora with an 11.2% gain in median home price year over year.  The question is how quickly can the market completely recover and will we bump along at the bottom for a couple of months?

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.  It is anticipated 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.

February is already shaping up to be a better month.  Buyers are eager to get in on a home thanks to the tax credit and sellers are enjoying a much more active marketplace than we’ve seen in previous years.  It’s a welcome coming together of the two that we’re all happy to see it.

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

  • Boulder/Longmont—Boulder reported a sharp increase in new listings (30%) is the highlight of the Boulder County market during the last two weeks.  Sales and showings have been steady with a 1% decrease in sales (we’ll call it even) and a 3% increase in showings.  Some Agents report listing times of less than a week on listings with something special to offer such as open space or those that are in tip top condition.  Listings over $1,000,000 are still much slower than the overall market.  Longmont reported showings are increasing steadily.  Buyers are recognizing value when they see it. We’re having heart to heart talks with listing agents.  Sellers are realizing that their homes need to be staged, either by themselves or by hiring a professional. Non-distressed homes must shine and sparkle.  Buyers are better understanding that short sales can take an incredibly long time to close & that the need to move can offset a perceived price.  The average price of our showings is again climbing in to the $350,000 price range.
  • Evergreen/Conifer—Conifer reported showing activity continues to increase with 77 showings for YTD – on track to exceed January activity by 15%.  The listing activity is steady with five new listings for the first two weeks of Feb.  Sales activity is off from the prior two weeks although numerous offers have been submitted on behalf of buyers during the past two weeks.  Evergreen reported six new listings in the last two weeks.  Six listings went under contract including one short sale listed @ $1,900,000.  Four buyers were local and two were from out of state, two were all cash buyers.  Received bank approval for two short sale listings which will now close within 30 days.  Three buyers placed under contract including one short sale.  There were a total of 199 showings so far in February which is 80% of the total for January indicating continued strengthening of activity into the spring months.
  • Denver Central – Showings are up year over year on our existing inventory.  Unemployment continues to be lower here than the rest of the country which is helping the Denver market.  We’ve had our 4th month in a row with the average sales price increasing in the Denver Metro area.  In January we had a bit of a lull with 1st time home buyers but have seen a significant increase in activity during the first two weeks of February.  The April 30th under contract deadline for the tax credit is fast approaching & buyers are realizing that with low inventory they need to start the process now.  The inventory shortages in the lower end market has created multiple offer situations for most homes in that market.  It might take a couple of offers before buyers find the right property.  Over 50% of the home sales in the Denver metro area continue to be under $250,000.  If you are looking to sell a home that is priced under $300,000 this is a great time to sell.
  • Denver West— Both the Super Bowl weekend and the President’s Day weekend were a little slower for our agents.  The various areas with properties under $150,000 are extremely busy.  Our agents are struggling trying to get buyers for these properties under contract.  It’s very frustrating for both agents and buyers.  Soon there won’t be any inventory at that price point.
  • Devonshire— With February here and the deadline for the tax incentive for 1st time buyers quickly approaching, we’re seeing a very nice upswing in real estate activity.  Even our Sunday showings have seen a dramatic change.  Typically Sunday has been a quiet day for showings in this office.  We’re also seeing more contracts being written.  Sellers seem to realize that ANY offer is worth countering as the written offer is just the very beginning of the process.  We’re definitely short of inventory so it’s the perfect time to get homes on the market.  If there is some hesitancy on timing to list a home, then the sellers should spend this time getting their homes in the best condition possible.  The upper end market is finally showing some signs of movement slowly but surely, so we’re cautiously optimistic for that market sector.
  • Douglas County— Highlands Ranch, Castle Pines North and the Littleton area are seeing significant activity.  Agents are very busy with sellers and buyers right now.  Our open house activity and floor have been very successful this past two weeks.  We’ve seen an increase in our activity with our showings as well as our mortgage rep being very busy at this time with loan approvals.  We’re expecting a huge push in March by both sellers and buyers trying to take advantage of the tax breaks as well as interest rates which are still very good.  The $200,000 price range is still strong and the $350,000 to $450,000 range is showing improvement.
  • El Paso County— Colorado Springs reports activity in Colorado Springs is on an even or upward swing, but nothing drastic.  We are still having a good number of military relocations occurring which tends to help keep activity going.  Many first-time home buyers are still trying to take advantage of the tax credit and meet the required deadlines for being under contract and closed.
  • Larimer County—Our Fort Collins/Loveland offices report there is a flurry of activity in the market right now!  We have seen our showings increase 25% in the last two weeks and 50% in the last 30 days.  In addition, our inventory has also grown as we’ve put 42 new properties on the market in the last two weeks.  This is great news for buyers looking for new homes to view.  Showings for homes priced above the $400,000 range has nearly doubled from the previous two weeks.  Hopefully lenders will make jumbo loans more readily available & at interest rates acceptable to high end home buyers to help get this segment of the market moving.
  • North Metro— January was an incredible month in the North Metro office for listings.  The agents listed 60 homes in January which is up from 47 in December as well as up from January of 09.  The listing price ranges from $90,000 up to $1,500,000!  Activity on the listings has increased as well.  Homes priced under $200,000 are receiving multiple reasonable offers & are going under contract within the first week of being on the market.  Homes priced at $125,000 or less are under contract, on average, within two days.  Now is the time to get your home on the market before the tax credit ends & before the possibility of higher interest rates.
  • Parker— After leveling off for a week, the activity spiked a bit for our agents.  We ‘ve seen considerable activity in Parker and in the surrounding market.  Sellers are keeping a realistic view of home prices and buyers are being more realistic about the offers that they are making.  We’re excited about the coming months.
  • Southeast Metro—The SE Metro office reports pent up demand along with the opportunity for the tax credit seem to be the driving forces in what appears to be a record setting February at our office!  Showings continue to increase as we approach 600 per week.  Our agents are seeing some of their listings hit the market on Friday and be under contract by Monday.  Open house traffic continues to be strong as many buyers out there are unrepresented & looking for a Real Estate professional.  We’ve had several open houses with 15 to 25 people thru on a single day.  There continues to be a shortage of million plus properties in the desirable areas of Greenwood Village & Cherry Hills.  We have high end buyers that are ready to make a move but can’t find the home to fit their needs.  No need to wait for Spring, sellers get your homes on the market today!
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What buyers and sellers need to do now so they don’t miss out.

With only three months until the new $8,000 first-time homebuyer and the $6,500 existing home buyer federal tax credits are set to expire, time is running out on an opportunity that buyers and sellers may not see again. The tax credit, which was originally created in mid 2008, then expanded in January 2009 and extended again this past November, was only designed to be a short-term incentive to drive more buyers into the housing market. That’s why many people in Congress are saying that, come April 30, 2010 when the credit expires, “That is it!”

So the clock is ticking. The average real estate transaction, from offer to closing, takes approximately 90 days and that is just about where we are now. To meet the federal deadlines, a buyer must have a binding sales contract in place by April 30, and have the home purchase completed by June 30. To achieve those time frames, buyers need to act almost immediately. Those deadlines also mean that this is also a prime opportunity for sellers. As the April 30 deadline gets ever closer, we are bound to see an influx of home-seekers who are hoping to find a house and make an offer in time to receive the tax credit. So for sellers who have been considering moving up in the market, downsizing, or relocating, now is an opportune time to put their house on the market.

We’re at a unique time in real estate. The tax credit deadline is helping to create the “perfect storm” in the market, due to four key elements – I.I.I.P:

  • Inventory: Although there are an overwhelming number of markets where inventory is down, and even with a decline in inventory year over year, there are still plenty of homes on the market for buyers to choose from.
  • Interest Rates: Mortgage rates remain at near historic lows. This means higher purchasing power for buyers.
  • Incentives: The extension and expansion of the homebuyer tax credit is providing benefits to buyers who may have otherwise not been interested in getting into the market.
  • Prices: Affordability remains at an all time record level nationally and in many of our local markets as well.

While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn’t have to be. For those who are in the early phase of the home buying process, there are a few key things that you can do to speed up the process:

  • Find A Qualified Real Estate Agent. If you do not already have one, work with a real estate agent who will be able to help identify mortgage lenders, home inspectors, lawyers and others who will play a role in helping to get the buying process completed by the April 30 deadline.
  • Know Before You Go. Free online tools and mobile applications for smart phones are available to help you quickly and conveniently learn about neighborhoods and view homes on the market. Consult with your own tax advisor as to your ability to qualify for the tax credit based upon income levels, length of residency/homeownership and housing prices. Arming yourself with as much knowledge as possible in the beginning is bound to save time in the long-run.
  • Get Pre-Approved for a Loan. “Pre-approval” means that a lender has checked your credit and other credentials and is prepared to making a loan. Not only is this valuable to sellers, and may give you an advantage over other offers they receive, but it could speed up the loan process and allow you to complete the necessary paperwork before the tax credit deadline.

The tax credit has done a lot for the real estate industry since its inception. According to the National Association of Realtors, 47% of all homes sold last year were purchased by first-time home buyers. Paul Bishop, NAR vice president of research, has said that first-time buyers “are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade and stimulate related goods and services.”

For additional information and provisions on the homebuyer federal tax credit, visit http://www.federalhousingtaxcredit.com. For additional real estate information visit http://www.coloradohomes.com.

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.

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

  • Boulder/Longmont—Longmont reports showings are holding steady at an increased level.  More buyers are looking.  Short sales are a large part of the offers written.  This is still a lengthy and frustrating process for both the buyer and the seller.  25% of the short sale contracts written either fail or are lost because buyers are unable to wait any longer for  lender approval.  This is a perfect time to add to an investment portfolio in real estate.
  • Evergreen/Conifer—Evergreen reported we had four new listings in the last two weeks for a total of thirteen.  Three listings went under contract.  There were a total of 250 showings during the month.  Two buyers were put under contract in the last two weeks.  Overall, activity has increased significantly in price ranges up to $1,000,000.  Conifer reported showing activity has increased significantly compared to December, totaling 129 showings for the month.  Listing activity is increasing with five new listings.
  • Denver Central – Overall sold units were down from 2008 to 2009 but overall inventory was down at a greater percentage than resales.  The drop in inventory in 2009 is a very good sign for the Denver market in 2010. Showings are up year over year on the existing inventory.  Unemployment continues to be lower than the rest of the country which is helping the Denver market.  We’ve had our 4th month in a row with the average sale price increasing in the Denver Metro area.  With the extension of the tax credit to 2010 there has been an increase in 1st time home buyers looking for a property.  Unfortunately, with the low inventory they need to start the process now to be under contract by the April 30th deadline.  The inventory shortages in the lower end market has created multiple offer situations for most homes in that market.  It might take a couple of offers before buyers find the correct property.
  • Denver West— One of our Agents had an open house on Saturday the 30th at a $750,000 listing – over 20 groups came through in three hours!  Another Agent put all eight of her listings under contract in the last few weeks.  Our under contracts are double what they were for the first two weeks of January.
  • Devonshire— With February here and the deadline for the tax incentive for 1st time buyers quickly approaching, we’re seeing a very nice upswing in real estate activity.  Even our Sunday showings have seen a dramatic change.  Typically Sunday has been a quiet day for showings in this office.  We’re also seeing more contracts being written.  Sellers seem to realize that ANY offer is worth countering as the written offer is just the very beginning of the process.  We’re definitely short of inventory so it’s the perfect time to get homes on the market.  If there is some hesitancy on timing to list a home, then the sellers should spend this time getting their homes in the best condition possible.  The upper end market is finally showing some signs of movement slowly but surely, so we’re cautiously optimistic for that market sector.
  • Douglas County— Our Southwest Metro office reports our floor calls have been great.  We’ve generated between five and seven appointments for listings and a couple of buyers.  Open houses have been very successful the last two weeks.  We’re seeing tremendous activity as well as our agents picking up potential buyers and listings.  Agents are very busy with listing and buyer appointments.  We’re seeing an increase in activity in the office and Agents are quite busy.  We’re seeing movement in the $350,000 to $450,000 market as well as lower.  We’re very excited about the activity that we are seeing in our market.
  • El Paso County— Colorado Springs reports in the Colorado Springs area, single-family home sales totaled 8,745 in 2009, a 4.9% increase over 2008.  This is the first annual increase since 2005.  Existing home sales last year totaled 8,188 and 8.3% increase over 2008 according to the Pikes Peak Association of Realtors.  In December, home sales totaled 623 nearly a 26% jump from the same month in 2008. Existing home sales, which account for about 90% of purchases totaled 566 in December, a 22.8% increase from the same time a year earlier.  Sales reflect only transactions handled by association members and most took place in El Paso and Teller counties.
  • Larimer County— We’re seeing a large jump in showings the last two weeks, up over 25%.  Homes are steadily coming on the market and agents have reported that the upper end has seen a few more showings over the same time last year.  These are promising signs for the new year.  New listings this week are nearly identical to last week and I would expect the inventory to continue to climb in the next 60 days with the bulk of the sales activity still below $300,000.  The perfect storm continues…low prices, low interest rates and tax incentives.
  • North Metro— No information reported.
  • Parker— Listings, showings and all activity are up in Parker and the surrounding areas.  The buyers seem to be showing up after the long Winter slumber. We have had a big jump in showings just in the last week, showing that there are still huge opportunities for homeowners.  Now is a great time for people on the fence to sell their homes because of the low rates, government incentives and reasonable inventory.
  • Southeast Metro—The SE Metro office is seeing an increase in our showing activity to over 550 showings last week.  In January we placed 123 new homes on the market.  As quickly as we’re listing them, we see them selling!  Several agents have had 3 or 4 listings placed under contract within two weeks on the market!  Buyers are excited about the extended tax credit opportunity and are anxious about finding their dream home before the interest rates tick up.  Luxury homes are also experiencing a steady increase in traffic.

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