Have you heard about how is the Market doing?

Denver Real Estate Trends: 4Q 2014

In 2013, we saw strong growth in sales price and volume. Tight inventory in 2014 and will not get better (from buyer’s point of view) until later in 2015 (probably much later).

Average Price:  Prices jumped +8.5% in 2012.  9% in 2013. This was driven by the lack of inventory on the low and middle range of the market.  In 2014 prices rose 9%.  Small homes will continue, for at least one more year, to outpace most other size categories, in our view.

Inventory:  Inventory levels continue to stay low, especially for smaller homes.  This will continue to drive price increases on the low end.  With prices above pre-recession highs, essentially all sellers can afford to list and sell their homes.  Almost no one is “underwater” in Denver.  Inventories should increase in 2015.

Denver still remains a strong sellers market at all price points for at least another year.

 Inventory levels are still historically low. 

Overall, the Denver home market had 1 month of inventory (MOI) on 1/1/2015; a big decline since 2010.  There is less than 1 MOI on homes under 2,310 SF( that’s a very strong seller’s market)  48% of inventory is under contract. Small homes are generally selling at asking price or above, not at a discount.

Historically DSF (home) sales volume relative to population has been stable, with the exception of a surge of transactions in 2003 and 2004.  2013’s performance was still 25% off the peak in 2004!

Information and data provide by Your Castle real Estate.  We believe that access to the best and most timely information can dramatically shape our decisions and no one does more research on the local housing than Your Castle.  Today's consumer needs a trusted resource that can separate signal from noise and help them navigate the complex process that real estate has become.  With our extensive knowledge in every aspect of the field, and fueled by consumer research and insights, we are the go-to source for information and education.

Your Castle Real Estate:  Local Knowledge. Total Commitment.

For more information contact Lorena Arnold at Your Castle Real Estate, LLC at Lorena@yourcastle.org or call 303-981-6539. If you want information specific to your neighborhood, please let me know. www.Lorena.Yourcastle.org

February 2013 Denver Real Estate Quick Stats

February 2013  Quick Stats

Denver Metro Single Family Housing Stats:

Active Listings: 8,834

* Down 30% from Jan. '12

Under Contracts: 3,535

* Up 24% from Jan. '12

Solds: 2,343

* Up 17% from Jan. '12

Average Price: $301,827

* Up 11% from Jan. '12

Average Days on Market: 80

* Down 22% from Jan. '12

Denver Metro Condo Housing Stats:

Active Listings: 1,260

* Down 40% from Jan. '12

Under Contracts: 896

* Up 38% from Jan. '12

Solds: 610

* Up 28% from Jan. '12

Average Price: $170,769

* Up 17% from Jan. '12

Average Days on Market: 70

* Down 35% from Jan. '12

Real Estate News – The Blistering Hot Seller's Market

What a difference a year makes! Just 12 months ago our real estate market had started its recovery but was moving forward at a snail’s pace. Inventory was down from its peak but no one was certain whether the recovery would fully take hold or the market would remain flat for a long period of time.

Fast forward to today and everything has changed. We are entering our 11^th straight month of record-low inventory (homes for sale) and the market is surging upward in a fashion we haven’t seen in metro Denver for many years.

I’m frequently asked where the market is headed and when we will get back to some kind of equilibrium. The truth is it’s extremely difficult to predict the future but here’s what I do know. Right now we are experiencing the strongest seller’s market since at least the high points of the 1990’s, and perhaps of all time. The reason is simple: we have much more demand for homes (buyers) than we have supply of homes (sellers). What’s fascinating to watch is the dynamic build on itself. It looks something like this:

1. Buyers make offers on homes and continue to lose out to higher offers.
2. Buyers get increasingly frustrated and begin to get more aggressive with their offers.
3. The momentum builds on itself until we see what is occurring today, with multiple offers on a property the norm rather than the exception.
4. The multiple offer dynamic almost always bids prices higher than the original asking price.
5. The buyers that lost the bid learn from the experience and become more aggressive on their next offer.
6. Then back to Step 1, until the buyer bids high enough on a property to finally get an offer accepted.

 The result of course is the tremendously strong seller’s market we are experiencing today. And this seller’s market is going to last for a while, at least until we get back to some kind of balance in the market. I don’t see that happening for at least a year, perhaps several years.

In the meantime, if you’ve thought about selling your home, now might be a great time to find out what the market is like in your neighborhood and see what your home is worth. It’s almost certainly worth more than it was just a few years ago. Drop me a line and I’ll put together a professional Competitive Market Analysis on your home so you have the data to make the right decision..

Buyers – How to Be a Great Buyer in the Market

The theme of this Newsletter is the remarkable seller’s market we’re currently experiencing. So where does that leave you, the buyer? Actually, it leaves you in a pretty good position if you understand what you need to do as a buyer. If you react to the market appropriately and follow a few simple rules you’ll be able to buy the house of your dreams at the low interest rates that still exist today. And the great news is that since the seller’s market is driving prices higher, once you buy your home you stand a great chance of building equity with home appreciation.

Here’s how to be a great buyer in today’s environment:

1. Understand the real estate market. I can help you understand where the market is and how you should respond to it. It is critical that you understand the data in order to make appropriate offers.
2. Write clean offers. There are infinite nuances in the Colorado Contract to Buy. The better you understand what to put into a contract and what to leave out the more likely you are to get your offer accepted.
3. Get a great prequalification letter from your lender. When a seller gets a number of offers, one of the differentiators will be who looks most qualified to purchase the property. Working with a reputable lender and having a rock solid prequal letter will help your chances a lot.

 These are just a few of the ways I work with my buyers to help them get their offers accepted. Give me a call and I’ll be happy to teach you more about how to be a great buyer. 

Sellers – Time to Trade Up?

Homeowners today understand what a strong seller’s market it is and are taking advantage of the market. But when they sell their home they need to move somewhere else and their logical question is ‘won’t I then experience the market in reverse as a buyer?’. The answer is usually yes, but there’s one big caveat most sellers don’t take into consideration – today’s extremely low interest rates. As a rule, a .25% decrease in the interest rate increases buying power by about $10,000. This means a 1% decrease in the interest rate increases buying power by $40,000 and a 2% decrease increases buying power by $80,000! Many of my sellers bought their homes years ago when rates were much higher. If they have an existing 5.5% interest rate on the home they’re selling, that means they could sell their home and buy another home that costs $60,000 more and have about the same monthly payment! As incredible as this sounds it’s true and we have clients doing exactly this. Feel free to give me a call so I can walk through this with you and see how you can take advantage of the low interest rates. 

Investors – High Quality Residences Have Great Returns!

A lot of investors think that investing in rental properties only works in low-end neighborhoods with beat-up houses and scary tenants. Nothing could be further from the truth! Your Castle has done a great deal of research lately and found that buying and holding properties in quality locations like The Spire can yield tremendous returns down the road. Using very realistic numbers, a two bedroom condo in The Spire has a CAP Rate of 6.1%. An investor in a combined marginal tax bracket of 40% can yield an average annual return of 16%. Try making that in your savings account! As long as interest rates stay absurdly low (which cannot last forever), high quality buildings will generate enough rent to cover most/all of their direct costs. You can get twice the return at a quality location like The Spire or other similar high-end residence than you can with the stock market. Your Castle is going to begin a series of classes to describe the opportunities and walk through the numbers so let me know if you’d like to learn more

Title Spotlight - What to Do when you can't attend the Closing: Proper Use of Powers of Attorney and Resolutions to Appoint a Signer

Mortgages – Rates Are Ticking Up

If you have been watching the news lately I’m sure you have seen that the stock market is hitting record highs. The problem is this tends to push mortgage interest rates higher. The rate for a 30-year fixed-rate loan has increased each week for seven of the last eight weeks.  Gone are the days of the 3.5% fixed-rate, but 3.875% is still available and that is still VERY low!  However if the stock market and the economy continue to improve we may see rates go back above 4%. 

As we discussed earlier, for the average homeowner an increase of .25% in interest rate can equate to a loss of as much as $10,000 in buying power.  For example if you qualified for a $200K loan at a rate of 3.75% and then your rate increases to 4.0% you may now only qualify for a $190K loan. 

What does this mean for you?  It is still a great time to buy but we may see increased rates in the future. And increased rates mean decreased buying power so you may not be able to buy as much house in the future as you can get today. .

  

For more information contact Lorena Tankersley at Your Castle Real Estate,LLC atLorena@yourcastle.org or call 303-981-6539. If you want information specific to your neighborhood, please let me know. www.Lorena.Yourcastle.org

August 2012 Denver Real Estate

August Quick Stats

Denver Metro Single Family Housing Stats:

Active Listings: 9,060

* Down 33% from Aug. ‘11

Under Contracts: 4,191

* Up 18% from Aug. ‘11

Solds: 3,730

* Up 17% from Aug. ‘11

Average Price: $311,893

* Up 10% from Aug. ‘11

Average Days on Market: 63

* Down 34% from Aug. ‘11

Denver Metro Condo Housing Stats:

Active Listings: 1,766

* Down 45% from Aug. ‘11

Under Contracts: 1,005

* Up 2% from Aug. ‘11

Solds: 955

* Up 20% from Aug. ‘11

Average Price: $183,359

* Up 9% from Aug. ‘11

Average Days on Market: 69

* Down 38% from Aug. ‘11
 

Real Estate News – Detailed Stats on Denver Neighborhoods

This month let’s take a closer look at some important submarkets around town. Each table gives us a snapshot of what is happening in different neighborhoods of greater Denver.

 

Denver Northeast

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$234,189	$266,143	+13.6%
Days on Market	93	53	-43%
# of Active Listings	583	332	-43.1%
# of Closed Sales - YTD	1,450	1,577	+8.8%

Denver Northwest

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$286,670	$328,344	+14.5%
Days on Market	60	43	-28.3%
# of Active Listings	382	233	-39%
# of Closed Sales - YTD	757	900	+18.9%

Denver Southeast

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$435,073	$447,635	+2.9%
Days on Market	96	56	-41.7%
# of Active Listings	1,127	704	-37.5%
# of Closed Sales - YTD	1,683	2,129	+26.5%

Denver Southwest

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$136,573	$179,822	+31.7%
Days on Market	92	59	-35.9%
# of Active Listings	417	226	-45.8%
# of Closed Sales - YTD	945	1,015	+7.4%

Aurora North

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$107,694	$121,889	+13.2%
Days on Market	72	41	-43.1%
# of Active Listings	201	72	-64.2%
# of Closed Sales - YTD	538	481	-10.6%

Aurora South

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$183,523	$213,356	+16.3%
Days on Market	94	54	-42.6%
# of Active Listings	671	396	-41%
# of Closed Sales - YTD	1,882	1,981	+5.3%

Broomfield

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$343,462	$340,470	-0.9%
Days on Market	88	70	-20.5%
# of Active Listings	282	172	-39%
# of Closed Sales - YTD	444	538	+21.2%

Highlands Ranch, Lone Tree

Category	Aug, ‘11	Aug, ‘12	Change
Average Price	$358,316	$369,417	+3.1%
Days on Market	88	50	-43.2%
# of Active Listings	529	314	-40.6%
# of Closed Sales - YTD	1,136	1,376	+21.1%

Buyers – The National Scene Mirrors Denver

We talk a lot in this Newsletter about the local housing market but it is important to understand that our market does not exist in a vacuum; it is part of a state, regional, and national market as well. The turnaround we are experiencing is not a local phenomenon, it is occurring in the majority of real estate markets around the country.

What we are seeing is the turnaround portion of a predictable, 7-10 year market cycle with national roots. Nearly seven years after the housing bubble burst, most indexes of house prices around the country are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines. Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. The fraction of homes that are vacant is at its lowest level since 2006.

Even builders are getting back into the game. Nationally, builders began work on 26% more single-family homes in May 2012 than May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth.

Sellers – Multiple Offers are Back!

I read an article in the Wall Street Journal titled: Stunned Home Buyers Find the Bidding Wars are Back.  I find the media are 6-12 months behind what I’m actually seeing on the street, reporting on trends well after they’ve appeared in the marketplace. But this time I had to give them credit because this is exactly what I’m seeing in my business. Since late winter/early spring my sellers have been shocked not only by the number of offers they’re getting but by the quality of the offers as well. Gone are the days when buyers submitted lowball offers to test the market. These types of buyers quickly learn to make a serious offer or they get flushed out of the market. I had a listing recently that had 5 offers on it within 4 days, and three were above asking price. A year or two ago this would’ve been unheard of, but today it is all but the norm.

The Journal may as well have been talking about our market, right here in our backyard, because that is exactly what is happening. And it’s no mystery why. The number of homes on the market is down by a third from this time last year. Even with that incredible lack of inventory, homes under contract are up by 18%. The average price of a home has increased by 10% in the past year and the average days on market (the time it takes to sell a home) has dropped by 34%. Add it all up and we’re in the middle of a screaming hot sellers market!

Want to know what your home is worth? Give me a call and I’ll create a professionally prepared Competitive Market Analysis for your home and let you know.

Investors – Cashflow is King

In case you didn’t know, the market for buy and hold investors has NEVER been better. An odd combination of economic circumstances has converged to make this one of the best buy and hold markets Denver has ever seen. Here are four reasons why:

1. The Home Affordability Index for homes in metro Denver is still at its highest level in record.
2. Interest rates are at 50-year lows.
3. The rental vacancy rate is 1.5% (the lowest in Denver history).
4. Rents rose more last year than any year in a decade, and are still rising.

My clients have been asking my how long this set of circumstances can continue before the market readjusts itself, as it always does. That’s a very difficult question to answer because nobody knows what the future holds. My best guess is that home prices will continue to climb, but this will be offset largely by the dramatic rise in rents which we have been experiencing for the past couple of years. Since it’s hard to imagine interest rates or vacancy rates getting much lower I think that slowly over the next few years we’ll see cashflows begin to suffer for investors purchasing buy and hold investments. But investors who bought recently or who are buying now and locking in record low interest rates will take advantage of the continuing rise in rents to increase their cashflow for the foreseeable future. That’s why 30% of the homes purchased in metro Denver are bought by investors taking advantage of the current circumstances. If you’re interested in learning more about this opportunity give me a call and I’d be happy to discuss it with you.

YCRE in the News – Investor Success Summit Saturday, November 3.

 

Mortgages – Still a Great Time to Get a Loan

It’s a great time to get a mortgage! With some of the amazing opportunities available in the real estate market, whether you are a first time buyer or a seasoned investor you should be looking into buying a property with a fantastic mortgage rate. Mortgage rates continue to hover at all-time lows, but many experts in the financial community agree that this is not sustainable and we will eventually see rates increase.

  

 

For more information contact Lorena Tankersley at Your Castle Real Estate,LLC at Lorena@yourcastle.org or call 303-981-6539. If you want information specific to your neighborhood, please let me know. http:/Lorena.Yourcastle.org