We’re all about to embark on a well-deserved, long weekend  of leisure — hopefully filled with lots of sun – so we are going to make this week’s update rather short.  The main item we wanted to share with you was this week’s Time magazine article entitled “Is the Housing Market on the Rebound?”  Here’s an excerpt:

“Spring is typically the season when people shop for houses. Many families like to complete their home purchase by the end of the summer so as to not uproot their children during the school year. And let’s face it: houses just look more enticing when flowers are out. But the real estate bust and economic downturn have made the past few housing hunting seasons rather slow. Some buyers have waited on the sidelines hoping prices had further to drop.

This year looks to be different. Already, falling interest rates, an improving economy and a last bit of economic stimulus are helping the housing market stage a revival. In April alone, sales of existing homes jumped 23% from a year ago, according to the trade organization National Association of Realtors. Sales of new homes rose even faster, up 48% from a year ago. What’s more, a growing number of economists believe the three-year plunge in housing prices is at an end.

“Units, volume and sales price are up on all fronts,” says real estate broker Todd Hetherington, who is based in Alexandria, Va. “Houses that are priced well are getting multiple offers in the first week.”

For now, though, housing prices, like everything else, remain rocky. According to the S&P/Case-Shiller nationwide index, home prices fell 3.2% in the first quarter of 2010, down from the already low levels where they stood at the end of 2009. And home prices may stay down for a little longer. The continued recent slide in the stock market is hurting consumer confidence and likely to make some people pause before buying a house. Foreclosures aren’t helping the housing market either. The government’s home-loan-modification programs have helped keep a relatively small amount of home owners out of foreclosure. But more repossessed homes are now starting to land on the market, driving up the number of houses for sale and holding down prices. In addition, some economists are concerned that the expiration of an $8,000 tax credit for homebuyers, which essentially ended in April, will hurt home sales. Indeed, the Mortgage Bankers Association said last week mortgage applications for new home purchases fell to the lowest level since 1997. Lastly, mortgage credit remains tight, making it hard for some prospective home buyers to qualify for a loan.

“We think the tax credit has dragged a lot of house sales forward, and we think we are going to pay for it,” says Jay Brinkmann, the chief economist for the Mortgage Bankers Association. He expects home sales to drop 5% in the fall of 2010.

Nonetheless, a growing number of economists believe this spring could end up being the start of a sustained rebound in the housing market. The biggest driver of that rebound will likely be interest rates. Though rates were expected to rise this summer, the continuing problems in Europe are driving down rates in the U.S., which is still seen as a safe haven for investors. The result is that mortgage rates have fallen to their lowest point in a year and are expected to continue to drop through the summer. In general, for every percentage-point decline in mortgage rates, houses effectively become 10% cheaper.”

The last paragraph speaks for itself.  We are definitely seeing some strong signs of rebound in the market and the remaining Spring weeks and Summer months should be quite telling.  We’re fortunate in that interest rates remain low and thanks to that, buyers can simply afford more house and that fact is helping drive much of our market.

This week we also introduced our Denver Metro Area luxury home sales report which showcased the sales of million dollar homes rose 70% from March and 18% from one year ago.  In fact, a total of 58 homes sold for more than $1 million in April.  Click here to review the luxury home report.

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

  • Boulder/Longmont— Boulder County reports listings remain flat at 342 when compared to the previous two weeks.  Our showings decreased 20%.  The current two week period experienced 136 fewer showings, which indicates that the total sales for May will fall short to the sales recorded in April 2010.
  • Colorado Springs— Though Colorado Springs has seen a slight drop in buyer activity, it is certainly not the “Doomsday” drop some had warned of with the expiration of the tax-credit.  Loan interest rates have dropped and our returning military members have an extension on the government tax-credit, with certain qualifications and restrictions.
  • Evergreen/Conifer— Evergreen reported we had a total of 27 new listings so far in May compared to 25 new listings for April.  Eleven listings went under contract during the month . There have been a  total of 309 showings and previews so far in May, reflecting the beginning of the typical seasonal decline through mid-June as anticipated.  Conifer reported we had four new listings for the month of May compared to nine listings during April.  Four listings went under contract during May with two buyers put under contract so far during May.  A total of 83 showings and previews for the month to date reflects a slight decline from the prior months due to normal seasonal decline from Mother’s Day to Father’s Day.
  • Denver Central – May sales have been steady.  Inventory still remains low but we’re seeing an increase of sellers putting their home on the market.  We continue to see home appreciation in the Denver metro area.  We did have a drop in showings and under contracts the first half of May but things seem to be picking back up.  We continue to watch under contracts closely because the April 30th tax deadline has passed.  It will be interesting to see what effect that has on the market.  It’s important to be working with a professional that can educate & give you the proper advice to make the correct real estate decisions.  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.  We’re seeing an improvement in the higher-end market.  This is definitely a great market to move up to a higher priced home.
  • Denver West— Our sales are relatively active with many of our listings going under contract.  New listings on the market have reduced significantly.  Our agents state that there is confidence in the market and the clients they are working with have no attachment to the  former tax credit.
  • Devonshire— We’ve seen a slowdown in activity in May.  We believe that the deadline for the tax credit is directly responsible for the change.  Along with the fact that May is historically slower than April & June.  This is probably a function of end-of -school & graduations.  As we go into the holiday weekend, we look forward to the June upswing.  Sellers are now ready to list their homes and the buyers who want to be in for the next school year are getting ready to get out looking.  Interest rates are wonderful right now & we see buyers meeting with our lenders, doing their homework in preparation for buying & moving towards successful and timely closings.  It’s still a good time for sellers to be looking at that home that they have had their eye on as the move-up buyer is in a good position.  However, they need to realize that just as they are expecting to get their new home at a great price, so too is the buyer of their home looking to get that home at a great price as well.  Working with a full-time real estate professional is essential as neither seller or buyer want to leave any money on the table.  Pricing & negotiating skills are essential for the consumer.  Happy Memorial Day!
  • Larimer County— The trees are green, the grass is growing like crazy and the weather has been as volatile as the stock market!!  That being said, our housing market having lost a bit of steam from the expiration of the home buyer tax credit, marches forward.  Showings have leveled off, available listings have crept up, and with the uncertainty in the European economies, global investors are seeking a safe haven in US Treasuries which has helped to keep our mortgage rates at all time lows.  This was most unexpected as we had all prepared for interest rates to climb dramatically following the end of the mortgage backed securities purchase program by the FED.  Savvy buyers will see their opportunity to leverage increased buying power from the low interest rates & snap up new inventory that may have missed out on the tax credit feeding frenzy.  This may also be a great time for some home owners to look at refinancing existing mortgages.  Other good news for our area shows our unemployment numbers are low below 7% & local sales tax revenues are increasing.  It would seem that consumer confidence in Northern Colorado is on the rise which is good for everyone.  The FHFA shows Colorado as the 4th best state in the Union in terms of 12 month home price appreciation.  Even at just a positive 1.5% this further demonstrates the stability of real estate values in our state!
  • North Metro— Activity continues to be good in the North Metro area.  We have put 34 homes on the market through the first 20 days of this month.  This is down slightly from the previous month, however we are seeing an increase in the average sales price to around $273,000.  We currently have 103 under contract which is slightly less than last month.  We expected to see a little bit of slowing with the expiration of the Tax Credit incentive however, the buyers are still out there just taking a little longer to make a decision on the home that they want.  The sense of immediate urgency has subsided somewhat.  Open house traffic has picked-up as well as clients calling in to  our office to list their home or to find a new one.
  • Parker— Listings have slowed down because todays sellers are more educated about market values and understand that they have to bring money to the closing.  That has caused showings to drop slightly.  The decreasing inventory has a very positive effect on values.
  • Southeast Metro— The SE Metro office is busy closing over 100 deals just in the last week of this month!  We’re on track to set a record number of closings for May!  Although showing activity has decreased, the average number of showings before a property goes under contract has decreased.  On average we are seeing 16 showings per property before a contract is received.  Serious buyers are still ready, willing and able to purchase.  Incredibly low interest rates & a slight decrease in inventory has added energy to the market.  Last week, one of our listings above $600,000 experienced a ton of activity and received multiple offers.
  • Southwest Metro – Showings have declined a little these past days and we feel that it has to do with graduations, end of school & Memorial Day weekend approaching.  We’ve seen an increase in listings appointments and a significant number of buyers are out there looking to purchase a home.  Open Houses & Floor Calls have been very good & our agents are obtaining great leads.  We are seeing activity on our listings over $375,000 which is a good sign.  The office is busy with lots of activity in regards to sellers gearing up to list their properties.  We are also seeing more out of state buyers as well as buyers who are ready to move up to a larger home.

Finally, we’d like to say, enjoy your Memorial Day weekend.  The unofficial start of summer is almost upon us.  All across the country, pools will be opened and the smell of cookouts will fill the air.  However, it’s not just another three-day weekend.  Memorial Day is a day intended to commemorate all U.S. men and women who have made the ultimate sacrifice while in the military service, a tradition our country has observed since 1868.

Enjoy your family and your time this weekend and let’s all pay our respects to the men and women who have made our country and freedom possible.

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