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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