As mentioned in recent editions of Weekly Market Watch, a key inflection point in the market has been reached.  The government stimulus has been spurring the market on for more than a year and has since reached its limit.  The numbers released of late, however, still reflect home sales spurred by the end of the tax credit.

Now only time will tell and the next few months should be very interesting.  Essentially the question “how well can the housing market fly on its own?” is about to be answered.  Fortunately, we have record low interest rates on our side.

The latest report from NAR gives a mixed picture.  Existing home sales in June fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units, from 5.66 million in May.  But, they are 9.8 percent higher than the 4.89 million unit pace in June 2009.

On a national level, Lawrence Yun, NAR chief economist, said “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge.  Only when jobs are created at a sufficient place will home sales return to sustainable healthy levels.”

But as people know, real estate is local.  And the latest local figures are showing an interesting trend.  This past week the Coldwell Banker Residential Brokerage Luxury Home Report was released.  Keep in mind, luxury homes have been one of the hardest hit market niches for months.  The latest report, which analyzes data across the MLS, showcased luxury home sales in Denver metro area last month rose to their highest level in nearly two years.  A total of 67 homes sold for more than $1 million in June, up 22 percent from May and 3 percent from a year ago when 55 and 65 properties sold, respectively.  It was the highest level for luxury sales since 89 properties changed hands in August 2008.

Additionally, the median sale price of million-dollar homes in June was $1.34 million, up 4.7 percent from May’s $1.28 million median, but down 2.8 percent from the median a year ago of $1.38 million.  Home sellers received an average of 90 percent of their asking price, down from 93 percent in May but up from 87 percent last year.

What these figures show is that the high-end market in the Denver metro area continues to stabilize and improve.  With interest rates at historic lows and sellers pricing their homes very competitively, buyers have responded.

The bottom line is that sooner or later, housing will come back.  While it will undoubtedly take the housing market some time to return to normalcy, it’s clear that all segments of the market are slowly but steadily improving following last year’s low point.  We saw it in the entry level last year as bargain hunters took advantage of attractive prices on distressed properties.  And now we’re seeing the middle and upper ends of the market bouncing back nicely.

The progress made so far is encouraging – even now – after the government stimulus has run its course.  The market is on the right track, but that’s not to stay there won’t be a pause for a breather here and there.

 

 

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

  • Boulder/Longmont— Boulder reports our inventory levels increased by 11%, while sales activity remained flat.  Showings are down significantly – 20% or 152 showings on a base of 753 showings during the previous two week period.  Agents in the office are active in showing and working with buyer clients. Agents report that they need to work with two or more lenders to get transactions closed.  Over all it is taking Agents longer to get clients to decide on properties.  Buyers still come into the marketplace believing they are going to get a great deal on the house of their choice.
  • Colorado Springs— Showings seem to be picking up again as families return from their vacations.  We see that the listing of higher priced homes has picked up and buyers are now making offers instead of just looking.  With interest rates under 5%, this trend should continue throughout the remainder of the year.
  • Evergreen/Conifer— Sales are still below the normal seasonal levels from prior years.  Three different listings were subject to multiple offers, two in the $200,000 to $300,000 range & one in the low $500,000.  About half of the buyers were local & half were out of area.  Buying activity included cash offers on REO properties to short sales to 2nd homes with price ranges from a low of $135,000 to a high of $900,000.  The majority of our activity remains in the lower price points.
  • Denver Central – No information reported.
  • Devonshire— Once again this week we’re feeling the uncertainty in the public even though interest rates are at historic lows.  With the jobs report not as strong as predicted, consumers seem to be undecided as to moving at this time.  Our showings were slower all last week but it’s interesting to note, they have picked up again this week.  We are delighted to report an increase in offers and showings in our homes listed above $600,000.  We have seen a month over month increase in closed sales in that upper end of the market so we are feeling cautiously optimistic.  The Spring surge is over & we are hoping that it is Summer vacations that are slowing real estate activity.  Let’s hope that August brings another flurry of real estate successes.
  • Loveland— No information reported.
  • North Metro— Even though it’s been quite hot, open house traffic is picking up as are our calls into the office for assistance with buying or selling.  We have seen a decrease in the number of new listings half way through July so far as compared to last year at this time.  Some sellers are still holding out, hoping to see values increase before putting their home on the market.  The number of buyer contracts has increased.  Agents are finding that there continues to be numerous short sale properties on the market.  Many of their listing appointments turn out to be short sales.  That’s ok!  Our agents are well versed & trained in handling the short sale process and are there to help if you are in this situation.
  • Parker— Our showings are up about 20% the last two weeks, but still down from last month.  The low interest rates, under 5% are sparking buyers to get out and look.  We expect our under contracts to increase in the next couple of weeks.
  • Southwest Metro – Showings have started to increase although they are still down from earlier this year. We’re seeing increased activity as regards to our inventory.  Agents are still very busy with buyers however buyers are taking their time to make a decision regarding writing an offer.  We’re seeing activity slow down in the 1st time homebuyer market, due in part to the end of the tax credit.  Interest rates are great & buyers want to look at as much inventory as possible before making a decision. The number of  potential short sale listings are on the increase.  Open houses have been great and so have our floor calls.
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