You are currently browsing the monthly archive for January 2011.

Two key reports were released this week that indicate dramatic positive increases on the housing front.  First, NAR released its December existing home sales report which revealed that existing home sales rose sharply in December with sales increasing for the fifth time in the past six months.

The organization reported, “Existing home sales, which are completed transactions that include single-family townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.7 million in November but remain 2.9 percent below the 5.44 million pace in December 2009.”

NAR Chief Economist Lawrence Yun had this to say about the upward trend, “December was a good finish to 2010, when sales fluctuated more than normal.  The pattern over the past six months is clearly showing a recovery,” he said.  “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level.  The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

Also revealed this week was Coldwell Banker Residential Brokerage’s must anticipated Denver Luxury Home Report which revealed that luxury home sales in the Denver Metro Area jumped sharply in December compared to a year ago as the luxury end of the market gained momentum heading into the new year.  A total of 51 homes sold for more than $1 million in the Denver Metro Area in December, up 54.5% percent from the 33 that changed hands in December 2009.  Sales were also up nearly 16 percent from November.

The median sale price of million-dollar homes edged higher in December from November, reaching 1.25 million, up from $1.23 million the previous month. However, the median was down 7.4 percent from last year’s level of $1.35 million.  The figures were derived from Multiple Listing Service data of all homes sold for more than $1 million last month in the Denver Metro Area.

An assessment of the market right now?  There definitely has been a lot more optimism in the market lately.  High-end buyers are starting to feel more confident about the economic recovery, both in the U.S. and here in the Denver area.  If you’ll recall the December Reality Check message, it was predicted that the upper-end market would probably be the first area of the market to recover because it has softened since the middle of last year.  Early signs are showing that those buyers feel more confident that the economy is improving nationally as well as in the Denver Metro area and as the employment figures improve and thus, these are the buyers who are going to make a move.  As that happens, then the rest of the real estate industry will be pulled forward.  These are the early signs that the luxury market is on the rebound and may be the first price niche to recover from the housing downturn of the last several years.

Now, to take a look at this week in real estate:

Colorado Springs:  The number of listings have been slowly increasing the past few weeks with only about 15% being short sales (needing bank/owner approval for sale to be completed).  Showings have been up as agents get back to work after the holiday season and that has increased sales.  With interest rates still at an all time low, the Coloardo Springs market is looking very good for future business.

Denver Central: It seems as though Agents have begun to receive more calls from their sphere over the last two weeks wanting to buy or sell.  It also seems that buyers are starting to get off the fence apparently responding to the rise in interest rates.

Devonshire: Welcome to 2011!  It is exciting to see 2010 fade into memories and to have a new year ahead.  It appears that buyers feel the same, as showings are up and buyers seem to feel this new energy.  Mortgage rates remain steady & the economic forecast is beginning to feel more optimistic.  Jobs are still a concern and once the public feel that jobs are opening up, the real estate market will take an upward swing.  Sellers, on the other hand, are getting their homes ready to get on the market.  Why wait until everyone else gets their home listed & face all that competition!  They are better served to put their homes on the market as soon as possible & avoid the increased competition.  It’s great to feel new energy & optimism for the return of a stable real estate market.

Evergreen: One new listing went on the market so far in January.  Listing inventory has stabilized as both new sellers as well as past sellers are beginning to put homes on the market.  Three listings went under contract and three buyers have been put under contract so far this month.  Showing activity is improving as new buyers are coming into the market following the holidays with 103 showings so far this month compared to a total of 167 for all of last month.

Larimer County:  Happiest of New Years from Northern Colorado!!  December ended with quite a bang and it wasn’t just New Years fireworks that were popping!  Following the Christmas dip in activity, showings came roaring back & there was a flurry of closings prior to year-end putting the office ahead of December 2009.  The 12-month statistics are showing some positive trends in terms of stabilizing sales trends.  When you filter out some of the noise from the bumps created by the home buyer tax incentives – January is proving to demonstrate promise.  Inventory levels have continued to drop & sales have remained stable.  The trend in sales looks more like typical historic 4th quarter results which demonstrates a flattening out of what has been downward movement over the last several years.  In spite of the chilly weather & snowy days, showings continue to increase each week as Buyers continue to take advantage of truly terrific interest rates that are still hovering just above 4.5% for a 30 year fixed arte mortgage!

Longmont: Wow, what IS happening to the real estate market?  Some days it seems like one step forward & two steps backward.  Our predictions are for a stable 2011.  Home prices will remain at or near the current range & mortgage interest rates will do the same.  Investors have money to spend & they are looking for “screaming” deals.  Dealing with the event of the shadow inventory coming on the market will keep local real estate market values fluctuating for the near future.  Cautiously optimistic.

Parker: The high activity of the first couple of weeks is now reflected in a decrease of inventory.  Showing activity and contracts written are still increasing!  If the weather cooperates, this trend should continue throughout the spring.  The office is very active and has added four strong agents to our sales force.

Southwest Metro: Our showings have steadily increased since the 2nd of January.  Our agents are seeing an increase in 1st time buyers ready to actually find & write an offer on a home.  It seems that buyers are finally realizing that it is the time to buy before rates begin to move up.  Floor calls have been great with agents receiving 4 leads this last week.  Open house activity has increased & agents are feeling good about the way the new year is starting.  There is lots of activity on weekends in the office.  Agents are busy meeting with buyers & sellers.  Sellers seem to be ready to test the market & list their homes.  Buyers are wanting to buy.  Investors are looking to purchase at this time.

Denver West: Activity continues to be strong in the Denver West office.  The mild weather has helped since it’s relatively easy to show homes without the usual snow storms.  Buyers are still looking “for the good deal.”  Sellers have become more realistic when considering pricing.  Showings are up for the month from the same month last year by nearly 150.

Conifer: One new listing so far for the month of January.  Inventory has stabilized as both new and past sellers are putting homes back on the market.  No listings have gone under contract in January although five buyers have been put under contract so far this month.  Showing activity has improved with 52 showings so far this month compared to 58 for all of December.

Loveland: Showing activity is creeping up in Loveland.  The market’s average sales price is also inching up.  There is an increase in activity for mid-range and upper range properties.  Financing is still a big concern to the overall transaction.  The largest percentage of deals fall due to the Buyer’s financing.  A close watch is being kept on the shadow inventory very closely here in Loveland.  It can impact a small neighborhood/subdivision swiftly.  Loveland is a delightful place to call home and it is beginning to get some national recognition as such.

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With the holidays behind and a brand new year underway, Realtors, home sellers and buyers are all wondering what 2011 will bring to the Colorado housing market. After a choppy 2010 that saw strong activity early in the year and a softening in the second half, Realtors are encouraged that recent improvement in the economy could bode well for the housing market.

The real estate market is so closely aligned with the fate of the overall economy, the stock market and consumer confidence. In general, all three of those economic indicators have been recovering in recent weeks. And this week in particular gave housing market professionals reason for encouragement.

In his first appearance before the new Congress, Fed Chairman Ben Bernanke gave a more upbeat assessment of the economy that he has in the past. “We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold,” the central bank chief told lawmakers.

Bernanke and another senior Fed official, New York Fed President William Dudley, said today that leading indicators for the labor market are pointing to a likely pickup in the pace of employment gains over the course of the year.

At the same time, the financial markets have rallied in recent months.  The S&P 500 and the NASDAQ have risen 10% and 12%, respectively, over the past three months. The local Denver area companies continue to report strong sales and profits over the past year. All of this undoubtedly is having a positive impact on consumer confidence.

Finally, this past year’s holiday season provided some welcome news for retailers. U.S. retailers posted the strongest revenue growth since 2006. A Thomson-Reuters index of 28 leading retailers showed sales rose 3.1% at stores open less than a year.

But in all likelihood, the road to recovery will continue to be slow and occasionally bumpy. Don’t be surprised to see extremely upbeat economic numbers one month and a small setback the next.

For example, the Labor Department reported that the nation’s economy added 103,000 jobs in December and the unemployment rate dropped to 9.4% last month, its lowest level in 19 months. But the job growth fell short of expectations based on a strengthening economy. And the drop in unemployment was partially due to people dropping out of the labor force.

Nonetheless, despite two steps forward and one back, the overall economy appears to be trending upward. Cautious optimism is the feel of the day and the same will be true for the housing market in 2011.

Below is a market-by-market report from local offices:

  • Boulder – All categories are down due to the timing of the Christmas Holidays.  Historically, this two week period sees a drastic reduction in all categories.  Both Agents and the public seem to focus on the holidays and their families.
  • Colorado Springs – Showings have continued to be slow, partly because of the holidays.  Quite a few Realtors were off on vacation.  Sales have followed suit by also being very slow with some buyers waiting to see if interest rates continue to go lower.  Listings have held steady with about 30% being short sales, needing lender approval before the property can be sold.
  • Denver Central – Nothing to talk about really.  Quite a few people that took a number of days off for the Holidays.  It was pretty slow around the office.  Everything here is looking forward to a better 2011!!
  • Evergreen – Only two new listings went on the market in December.  Listing inventory has continued to decline as many unsuccessful sellers have withdrawn their homes from the market.  These homes will go back on the market in spring 2011 in hopes of doing better with improving market conditions.  Showing activity is declining due to seasonal variations although good weather this fall kept buyers out looking with 167 showings during the month.  Five listings went under contract in December along with five buyers that were put under contract.
  • Longmont – The winter holidays are usually a quiet time for the Longmont market.  Not 2010!  In fact, the entire fourth quarter of 2010 was busier than usual.  What a nice way to end 2010 with lots of buying and selling activity.  Predictions are that the investors will continue to be active.  Interest rates will hold steady for the year and confidence in the real estate market is cautiously optimistic!
  • North Metro – In November & December there was a large increase in the number of homes going under contract. In December there was a 25% increase from the month of October. The average selling price in the office is $267,000.  Listing inventory is slowly increasing as well.  The holidays did not seem to stop the buyers as they were out to open houses & meeting with agents to look at homes.  There is reason to be optimistic that the activity will continue throughout January.  The North Metro office is excited to have ended 2010 with the Market Share in Westminster, Broomfield, Thornton, Brighton & Erie.
  • Parker – After the expected slowdown the last two weeks, a good number of transactions were still closed.  There is a spike of activity in these first few days of the year.  Sellers are putting their homes on the market right away and there are more buyer requests than there have been in months.  If the weather cooperates the office will have one of the largest property tours in the last three years.  That is the 2nd week of January!  Looking forward to a great year!
  • Southwest Metro – The last two weeks of the year showings were of course down.  There were however, great opportunities with buyers wanting to buy before year end.  Investors were out looking and ready to purchase.  Listings were down as most sellers wanted to wait until 2011 to list their homes.  Floor calls were great during the month and so were open houses.  There are buyers wanting to take advantage of the low interest rates as no one knows how long they will stay at this great rate.  Several agents are gearing up for a good first quarter as they have listing appointments the first of the year and buyers ready and will to not only look but write.  The general opinion is that things are starting to turn in the right direction.
  • Denver West – The Denver West Agents are very, very optimistic about the real estate market in the year 2011!  The office finished strong in 2010 which was a good indicator of the upcoming year.  Everyone is very busy and selling homes.
  • Conifer – One new listing for the month of December.  Inventory is declining as unsuccessful sellers have withdrawn their homes from the market.  Two listings went under contract during December.  Showing activity declined to 58 in December which is about 60% of the normal level during summer months.
  • Loveland – Traditionally, the time period just before Christmas through New Years is a very quiet time for residential real estate.  Not so this season!  Showings continued during that period.  Well qualified buyers were looking for and making offers on homes.  It has been a good start to what is being predicted as a “better” year in real estate.

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