Heading into the heart of this year’s spring season, a national perspective of the housing market is helpful in pointing out a few reasons for optimism in the months ahead.
Bruce Zipf, president and CEO of NRT, Coldwell Banker’s national parent company, said this week that despite trailing last year’s pace, overall business results have managed to exceed expectations, thanks in large part to a surprisingly resilient high-end market.
NRT’s agents across the country closed 32 homes over $10 million in March, up from 10 last year and just six in March 2009. The total number of homes sold over $2 million is up 12%. There was particular strength in the luxury segment of the market in the Northeast, Florida and in California.
Normally, the strength of the housing market is judged by looking at current sales volume against the same time last year to gain a sense of how things are improving. But data cannot be properly compared from this March and April due to the artificial stimulus effects of last year’s Home Buyer Tax Credit. In May, these effects should lessen and give the first true glimpse of the market’s strength.
Nonetheless, there will undoubtedly be continued improvement in the market as the heart of the spring buying season approaches, especially right here in Colorado. Many local offices report seeing growing momentum from buyers looking to take advantage of mortgage rates while they’re still low, as well as prices that remain affordable.
In a number of local markets, there continue to be more qualified buyers than listings. This situation is resulting in multiple offers for many attractive homes, often bidding up the sale price over the asking price. Buyers are coming in with a lot of cash or all cash to win out the competition. How things have changed since the depths of the recession!
This is not to say that every market around Colorado is experiencing the same strong buyer demand. Certainly a number of communities and even neighborhoods within those communities have more balanced markets, and some homes continue to sit while others sell briskly. But in general, well-presented, well-priced homes are selling much better today than they did a couple of years ago.
Another reason for optimism is that mortgage rates are likely to remain affordable for some time to come. A lot of market-watchers were concerned that the Fed could ratchet up interest rates soon in response to inflation fears and the end of the government’s bond-buying program. But Fed Chairman Ben Bernanke largely put those fears to rest in his first-ever press conference last week.
Although Bernanke signaled the end of its $600 billion bond-buying program, as expected, he made it very clear that he isn’t inclined to raise interest rates for a long time unless the inflation outlook worsens.  More than anyone, the Fed chairman is very aware that the economy continues to face headwinds in the form of high unemployment levels and a tepid housing market in many parts of the country. While things are certainly getting better, Bernanke isn’t likely to do anything to douse the nascent recovery.
So looking to May and the summer season before long, there are many reasons to be encouraged that the housing recovery will continue to gain traction – especially here in Colorado.
Below is a market-by-market report from local offices:
  • Boulder—Listings are down over the two week period & there are comments from agents that there is not enough selection in the upper end of the price range.  The number of contracts remained steady over the two week period while the number of showings increased by 15% over the past two weeks.  All three indicators add up to indicate continued cyclical growth moving into the busiest months of the year.
  • Colorado Springs—Showings were up 25% even with the holiday as a lot of showings were set for Saturday.  Listing inventory has remained the same because many buyers do not want to purchase a short sale (mortgage holder must approve the contract & that can take from 5 to 10 weeks).  Because of that sales were down 20% from past weeks. This coming week is jam-packed with economic reports that can have a big impact on the markets & home loan rates which still remain at an all time low.
  • Southeast Metro—Well, here at the end of April real estate activity is in full swing.  There has been consistent increases in showings on all office listings, even those in the higher price points.  Buyers are finding that if they find a property that meets their criteria, they had better get an offer in or they have a very good chance of losing that home to another buyer as listing inventory has dropped somewhat.  In the upper end of the market, there have been consumers making buying decisions.  Days on the market has dropped slightly.  Sellers are encouraged in all price points  to get their homes ready by doing the cosmetic fixups that will make their homes stand out from the others on the market – fresh mulch and flowers for great curb appeal as well as updates of paint colors, decluttering and staging the interior of their homes.  Interest rates are still very appealing so now is the time for both sellers and buyers.  Looking forward to a much improved real estate season this spring and summer.
  • Denver Central—The downtown, Denver Central, office has been pretty steady for the last couple of months.  However, these last two weeks under contracts have almost doubled.  A lot of buyers are getting off the fence right now.  Listings are beginning to drop off some. Agents have a good positive attitude about the market.
  • Larimer County—Activity is still brisk with office showing data increasing week over week.  There are numerous reports of multiple offers on well-priced homes & while the sales pace has slowed somewhat, it appears to be more Easter/Passover/Graduation related than anything on the economic front.  The business news for Northern Colorado remains on the positive side as local companies have shown positive quarterly earnings & slow but steady signs of growth.  Housing inventory levels remain at 10 year lows which will certainly help minimize the downward pressure on prices – but serious Sellers must be aggressive & take a hard look at the market to ensure that when their home goes on the market, it is priced to get the attention of the Buyers that are ready to buy right now.  Interest rates are relatively steady but creeping upward which can begin to limit a Buyer’s purchasing power.  The best bet is to contact a Coldwell Banker Home Loan mortgage advisor & get locked in on a great rate right now!
  • Longmont—Activity is happening in the Longmont market!  Showings are up to usual Spring levels.  The agents holding Open Houses are seeing good traffic.  Educated buyers realize this is the time to purchase.  Short sales and foreclosures are still a part of this market and they are impacting some neighborhoods in a large way.  Financing for the marginal buyer continues to be a challenge, however the well qualified purchaser has some great financing options.  First time buyers are finding great values here in Longmont.
  • Parker—The last couple of weeks have been very active again.  Listing inventory is decreasing and agents are writing more contracts every week.  Forecasts tell us that the interest rates are expected to go up by a full percent by the end of the year which makes now the time to buy and to invest!  Also, if the inventory continues to decrease, prices will be more stable and begin to go back up!
  • Devonshire—Market activity seems to be improving based on the number of showings and contracts written.
  • Southwest Metro—There is great activity in the office.  Buyers & sellers are ready to make their move.  Interest rates at this time are still very good and buyers are realizing that they need to get moving before rates begin to creep up.  The majority of sellers are pricing their homes to sell in this market.  Showings have been steady and open houses have been great.  Three clients walked in looking to buy & floor agents have been successful in converting these to actual deals.  Looking forward to a good Spring season.
  • Denver West—Properties that have been on the market for sale for a year are now receiving offers. Although the price has been adjusted down, it is clear that more buyers are in the market place.  Even though there is substantial inventory, oftentimes there is not “good” inventory.  Many homes in the 30+ age bracket desperately need new kitchens and bathrooms in order to help them to sell.  Typically, buyers want to move into a home that is “move in ready” or they want a real bargain if they need to do the updating.
  • Loveland—The Loveland news that ACE (the NASA spinoff) is still huge news for Northern Colorado, Loveland in particular.  There is more new home builder activity.  The price of these homes is mostly at the entry level for housing.  The builders are delivering a great product for the price!  Showing activity is inching up slowly but it is going in the right direction.  The general mood is that Loveland is poised to make a great recovery by the end of 2011.  If you are a buyer looking for a bargain, now is the time to be shopping!