While the nation’s housing market has bounced back from the depths of the recession, the nascent recovery has been slow and sporadic in many parts of the country, including here in Colorado. The question on everyone’s mind is, “When will the market return to normal?”  No one knows for sure when that will happen  (the definition of “normal” is rather subjective  – it seems today’s market is the “new normal”), but there are a number of signs out there that should be watched for – economic indicators that will point to a  more robust recovery in the market.

On a macro-economic level, consumer confidence and unemployment levels are crucial, along with overall economic growth figures such as the nation’s GDP. Buyers won’t take the chance on purchasing a home if they’re out of work, or concerned they may be before long. If they don’t have confidence that things will be getting better, they’re not likely to move forward with a major purchase.

Additionally, because real estate is such a local business, our local market indicators will also give us some clear signals. In addition to seeing overall sales rise in local communities, inventory levels should fall, median prices should edge higher, the average days on market should drop, and the upper end of the market should heat up. Historically, it’s been the high-end market that comes out of a recession first because buyers have the means to take advantage of good values.

So are these signs being seen yet? Nationally, it was a mixed bag this week.  The were a slew of positive economic data points early in the week – rising car sales, upward revisions to growth and productivity and a busy start to the holiday retail season. Private sector payrolls rose by the most in three years in November. And finally, the Conference Board reported Tuesday that the Consumer Confidence Index jumped to 54.1 in November, up from a level of 49.9 a month earlier. Although the index remains well below its prerecession levels (which were above 100), the boost provides an encouraging sign for the economy.

But the two steps forward with the positive economic data, came with one step backwards on Friday when the nation’s jobs report was released. November’s job growth came in far lower than expected and the unemployment rate rose to 9.8%. U.S. employers added 39,000 jobs to their payrolls in November, the Labor Department reported. That marks a major slowdown from October, when the economy added an upwardly revised 172,000 jobs. The number also fell short of the 150,000 jobs economists were generally expecting.  However, most economists are concluding by week’s end that the mixed bag of employment data was overall a bit more positive than negative.

The broader Colorado housing market, however, is still working to move back to normalcy. Sales in October were off sharply from year ago levels. Analysts believe much of the drop had to do with the fact that 2010 home sales were “front-loaded” earlier in the year as buyers rushed to take advantage of the tax credit before it expired. But certainly tighter credit and concerns over jobs played a role.

So what does this mean toward year-end? Our local housing market recovery – like those in many regions – has been slow and choppy at times. Yet there are enough positive signs overall to believe better days are ahead in the new year. For those looking to buy a home, the stars are in perfect alignment. Interest rates are at historic lows in the low-4% level in 30-year fixed-rate loans. Home prices are very attractive. And housing affordability is at the highest point in years. Buyers need to examine their own “personal economy” and decide if they’re in a position to invest in a home. If they are, there may never be a better time.

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

Colorado Springs— Our showings have continued to decline which is not surprising considering the time of year (holiday season).  While sales volume remains lackluster, record low mortgage rates have helped stop the decline of home prices in most areas.  Listings are about normal for this time of year with short sales being about 35% of the inventory.

Denver Central— The Denver Central office is holding its own.  Steady on closings for the last three months and steady on our under contracts.  Sellers are starting to take their homes off the market for the holidays.

Devonshire— Well, it’s the holiday season and it’s still quite busy at Devonshire.  With interest rates still at amazing levels, and the weather certainly cooperating, our showing activity remains very strong.  Surprisingly, our open houses were busy this weekend also.  With homes decorated for the holidays, feeling cheery and festive, buyers feel that the homes are cared for and seem to be less reticent about putting in offers.  Sellers, on the other hand seem to be a little more flexible on looking seriously at offers that are somewhat less than they had hope for.  All consumers are concerned about what could happen to interest rates in 2011.  Also of concern are the flat housing projections.  These two factors seem to be creating the perfect storm where all parties are more motivated than they’ve been for some time.  Let’s hope that 2011 continues to show growth in the real estate sectors.  All indicators show steady progress to a more stable market.

Evergreen— Seven new listings went on the market in November although listing inventory has begun to decline as many unsuccessful sellers are withdrawing their homes from the market & will go back on the market in spring 2011 in hopes of improving market conditions.  Showing activity is declining due to seasonal variations, however good weather this fall has kept buyers out looking longer. Seven listings went under contract in November including two homes in the $900,000 price range.  Consistent with prior years, the number of showings typically decreases in the 4th quarter.  The quality of showings improves as buyers still in the market are serious and motivated.

Larimer County— Tis the season!  The seasonal slow-down is in full swing as everyone prepares for the end of year holidays.  Interest rates have crept up to above 4 1/2 % for a 30 year fixed and inventory levels in our market are up year over year.  The average sales price continues to creep up as finance savvy buyers in the upper-end have picked through much of the below-market priced luxury homes, using the very attractive jumbo interest rates to their advantage.  Aggressive sellers should not dismay as buyers in the market right now are usually highly motivated to get moved in prior to the start of school following Christmas break. Jobs in Northern Colorado are still flat but our unemployment rate remains well below the national rate.  Ours, 6.4% in Larimer county compared to 9.8% nationally.  With the recent up tick in jobs created & a tick downward in first time unemployment claims – there is some cautious optimism about the job market getting better in the first part of 2011.

Longmont— Inventory is high for this time of the selling season.  Sellers are realizing that motivated buyers are indeed ready to purchase.  Builders are cautiously starting to build “spec” homes.  New homes are available in very reasonable price ranges in & around the Longmont area.  Interest rates are bouncing around….Time to meet with a Coldwell Banker lender.  Short sales are still an issue to contend with for some sellers.  This is a great time to contact an agent for a current market analysis..for remodeling, refinancing or selling!

North Metro— The North Metro office had a great month in November as compared to October.  There is an increased number of sales in the office by 30%.  The open house activity has increased as well as the number of floor calls coming in.  The agents put 54 new listings on the market with prices ranging from $109,000 to $850,000.  There is an increase in activity in the upper end market.  In December the office has put 24 new homes on the market so far.  It’s a great time to take our buyers out to look for their new home, with the houses all decorated for the holidays.

Parker— Because of the approaching holidays, a good number of sellers are waiting to put their house on the market.  There is still a steady number of showings and contracts are steady.  Therefore the listing inventory is declining.  This is an opportunity for Sellers that have planned to wait.  The buyers that are looking right now are very motivated.

Southeast Metro at DTC— There has been a surge of activity in the SE Metro market right after the Thanksgiving holiday!  The office is still averaging over 400 showings per week.  Open house traffic has also increased in the energy areas of the city.  One of our open houses had over 20 visitors on a single Saturday afternoon.  Many homes show very well during the holiday season & several of our listings are now under contract & scheduled to close in December and early January.  Interest rates remain at record lows & buyers are taking advantage of current rates and average home prices.

Southwest Metro— Showings continue to increase and first time buyers are coming out to look.  These buyers are ready to go out and see what is available while interest rates are still good.  Open house activity was very good as well as the leads generated.  There is activity in properties ranging from $270,000 and above.  There is an increase in buyers not just first time but those wanting to move up, ready to take the leap & start the process.  Most of our agents feel that December is becoming a busy month and look forward to next year.

Denver West— There are seasonal adjustments taking place.  Fewer listings coming on the market, fewer showings, fewer under contracts. Buyers do know that it is a “buyers market” & they want to see an excessive number of homes before making a decision. In addition, oftentimes they are making ridiculous, low offers which often offend the sellers.  It appears that sellers are studying the market analysis and making good decisions with regards the initial sales price of their home.

Conifer— There were five new listings for the month of November although inventory is declining as unsuccessful sellers are withdrawing their homes from the market.  Three listings went under contract in November.  Showing activity held up well in November primarily due to good weather although the quantity of showings is expected to decrease moving into the holiday season.

Loveland— Showing activity bounced up 50% since the last report.  The price range of listings shown also took a nice price increase. There is an influx of cash buyers for the upper end properties.  Investors are eager to get into the Loveland market.  They seem to be looking for distressed homes that are candidates for fix & flips.  These investors are also working with cash most of the time.  Loveland is a beautiful city this time of the year…..come and visit us.

Please note this is our final edition of Weekly Market Watch for 2010.

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