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

July 2012 Denver Real Estate

July Quick Stats

Denver Metro Single Family Housing Stats:

Active Listings: 9,087

*  Down 35% from July ‘11

Under Contracts: 4,181
*  Up 23% from July ‘11

Solds: 3,713

*  Up 20% from July ‘11

Average Price: $312,920

*  Up 5% from July ‘11

Average Days on Market: 64

*  Down 35% from July ‘11
 

Denver Metro Condo Housing Stats:

Active Listings: 1,740

*  Down 51% from July ‘11

Under Contracts: 1,055

*  Up 22% from July ‘11

Solds: 905

*  Up 20% from July ‘11

Average Price: $190,269

*  Up 24% from July ‘11

Average Days on Market: 69

*  Down 37% from July ‘11
 

Real Estate News – Historically Low Interest Rates!

As we discussed a few months ago the Home Affordability Index (HAI) is at its highest recording ever in the metro Denver area. Just like it sounds, the HAI is a measure of how affordable homes are in a given location. It’s calculated by comparing the median price of a home in the Metro Denver market to the median worker’s income level, taking into account the current interest rate for a 30-year fixed rate loan. What this means is that the median income earner can buy more house today than ever before. Why? Because home prices, while rising quickly, are still well below their peak prices of 5-6 years ago and interest rates are at never-before-seen historic lows. It’s interest rates that continue to make homes so wonderfully affordable, so let’s dig into this a bit.

 

The typical rate on a 30-year fixed mortgage tumbled below 3.5% for the first time last week, the latest record low in a trend that has fired up homes sales around the country. Freddie Mac's weekly survey of what lenders are offering to qualified borrowers showed the 30-year rate at an average of 3.49%, down from 3.53% the week before. The 15-year fixed loan fell from 2.83% to an almost unbelievable 2.8%! Let’s put this in perspective. In late July 2010 and 2011 the typical 30-year rate in the Freddie Mac survey was just over 4.5%, more than a percentage point higher than now. The 30-year rate was above 6% in 2006 and most of 2007, over 8% back in 2000, and over 10% in 1990. Back in the bad old days of inflation, the rate topped 18% in 1981. Look at how the interest payments affect your monthly Principle and Interest payments:

$200,000 property in 1981 at 18% interest: $3,014

$200,000 property in 1990 at 10% interest: $1,755

$200,000 property in 2000 at 8% interest: $1,467

$200,000 property in 2007 at 6.5% interest: $1,264

$200,000 property in 2011 at4.5% interest: $1,013

$200,000 property in 2012 at 3.5% interest: $898

What’s more, according to a recent CNN Money article the average cost of closing on a mortgage has fallen by 7.4% over the past year. At the end of June, a homebuyer looking to close on a $200,000 mortgage with 20% down paid an average of $300 less than 12 months earlier.

 

No one knows how long these historically low rates can last. But in the meantime my clients are taking advantage of them to buy the homes of their dreams and lock in once-in-a-lifetime interest rates.

 

Buyers – Denver Has Highest Appreciation of Top 30 Cities

 

A few months ago the National Association of Realtors (NAR) ran a study to determine the home equity gain/loss for homes in the 30 largest U.S. cities over the past three years. They ranked the cities from largest average loss in home equity to largest average gain in equity. While there was little surprise that the usual suspects like Las Vegas and Los Angeles have been among the poorest performers, most of my clients have been shocked to see that metro Denver has had the HIGHEST APPRECIATION OF ANY OF THE TOP 30 U.S. CITIES FOR THE PAST THREE YEARS! Those of us who watch the market as closely as I do were not surprised by this, but for those who don’t, it has come as a most welcome surprise. The fact is that Denver is in the middle of a robust, even historical, real estate recovery that is leading the nation.

Of course no one knows what the future holds. Over time prices will go up and prices will go down, that much never changes. But there’s no denying there is much more confidence in the housing market than there has been for years and this confidence has my buyers excited to see what’s out there. Let me know if you’re curious and want to check out some homes, I’d be happy to show you!

Sellers – Number of Home Sales Highest in 5 Years

We have been discussing for months the incredible turnaround in our housing market. If you’re looking to sell your home this should be very welcome news! One of the key metrics of this recovery has been the high number of homes sold in the past few months. The graphic shows home sales per month for the past seven years. Note that the number of homes sold peaked in 2005 and 2006 and has fallen ever since. But recently this trend has reversed itself. Starting in March of this year the number of homes sold began jumping upwards, from April with 3,133 to May with 3,768 to June with 3,981. June’s numbers are almost equal to those of 2007 when the market was just starting to slow down.

For you as a seller what this means is that it might be a great time to sell. The inventory of homes on the market is at all-time lows, prices are up, and home sales are up as well. Call me and I’ll be happy to run a complimentary Comparative Market Analysis on your home to let you know what it might be worth. It’s great information and costs you nothing!

Investors – Low Vacancies Helps Landlords

Over the past few months we’ve talked a lot in this Newsletter about why so many investors are buying rental properties in metro Denver. The graphic shows one of the reasons why. The vacancy rate is a big driver of how well a rental property performs for a number of reasons. First, the lower the vacancy rate the higher the demand for the property. More demand means landlords can be more choosey selecting their tenants, and also can charge higher prices. In fact, rental rates increased by 4.5% in 2011, the highest jump in 10 years.

One of the reasons vacancy rates are so low is that many people cannot qualify for a loan. I don’t expect this to change for the foreseeable future. We’ve had a huge shakeout in the lending industry, and lending guidelines are much stricter than they were a few years ago. Until lending standards ease up I expect vacancy rates to remain low and keep my investor clients happy. If you’ve ever thought of investing in a condo or house as a rental property call me and I can show you what the numbers look like and what options you have.

YCRE in the News – Your Castle is 5th Fastest Growing Company on Front Range!

Your Castle is proud to announce that according to last week’s edition of the Denver Business Journal in 2011 we were the 5^th fastest growing company of any kind (not just real estate) in the $6.1 - $17.4 Million dollar category! We grew 93% in the past year serving customers like you one at a time with the market knowledge and respect you deserve. We are proud of this achievement but prouder still to work with great customers like you!

Mortgages – Tips to Qualify fo a New Loan

The mortgage market is staying hot with interest rates at all time lows.  If you haven’t reviewed your options lately it may be a great time to take a look at your options to refinance, or your options to trade-up to a bigger home with a lower payment (call me and I’ll tell you how I can help with this!).

But before applying for your new mortgage make sure that you are in good shape with the 4 items needed for a new loan:

1. Income – Make sure your income is remaining consistent and your tax returns are reflecting your total annual income.
2. Credit – For the very best rates you want to have a credit score of 740 or greater.  There are loan options for clients all the way down to a 620 score, but as your credit score goes down your rate goes up.  So it is to your benefit to have your credit cleared up and as high of a score as possible.
3. Assets – You will need to have funds in the bank for your down payment and to show you have 2 months of savings.  Make sure you are depositing all earnings and keeping good records of your bank statements.
4. Collateral – The property you are borrowing against (your current home or your new property) needs to be in good shape and not have any “safety or soundness” issues.  Make sure there are no broken windows, plumbing leaks, lead based paint, etc. 

By taking care of these 4 critical areas you can be confident that you will qualify for a new loan and be able to refinance or buy a new home. 

Neighborhood Spotlight – Auraria

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