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

June 2012 Denver Real Estate Quick Stats

­June 2012 Denver Real Estate Quick Stats 

Denver Metro Single Family Housing Stats:

Active Listings: 9,074

*  Down 36% from June ‘11

Under Contracts: 4,330

*  Up 13% from June ‘11

Solds: 3,981

*  Up 21% from June ‘11

Average Price: $324,497

*  Up 11% from June ‘11

Average Days on Market: 71

*  Down 28% from June ‘11

Denver Metro Condo Housing Stats:

Active Listings: 1,851

*  Down 51% from June ‘11

Under Contracts: 1,033

*  Up 11% from June ‘11

Solds: 923

*  Up 18% from June ‘11

Average Price: $181,578

* Up 15% from June ‘11

Average Days on Market: 74

*  Down 41% from June ‘11

Real Estate News - The Market Has Come Roaring Back!

Something incredible just happened and not many people know about it. The metro Denver real estate market has come ROARING back but the mass media has missed the boat and is just beginning to get wind of it. Consider these facts:

• The inventory of homes for sale is down 36% in the past 12 months.

• The number of sold homes is up 21% in the past 12 months.

• The average Days on Market is down 28% in the past 12 months.

• The average price of a home is up 11% in the past 12 months.

An amazing turnaround has occurred in our market so let’s take a look at historical home prices to highlight the fact. The graphic shows metro Denver residential home prices by month for the past seven years. Look specifically at the line for 2012. What you see is a stunning rise in prices starting in February of this year and continuing through today. In February home prices were at the high end of prices over the past four years, but well below the highs of 2006 and 2007. Starting in March homes prices began leaping upward and have not stopped since. Today, prices are just under the all-time highs of 2006 and 2007. This is what a recovery looks like!

YCRE in the News - 5th Office and 375th Agent!!!

Your Castle Real Estate is proud to announce we’ve just added our 375^th real estate agent to our growing team of professionals. And to better serve your needs, we’ve added a fifth office in the Front Range, located at 8120 Sheridan Blvd., Ste. 335, Westminster.

Mortgages

Lately it seems like I have the same mortgage news for you every month: "Rates are at historic lows!" This month I still have that same message: "Rates are at ALL-TIME lows!" but now I really am beginning to wonder "how low can they go?" For qualified buyers I’m seeing FHA loans close with rates of 3.5% fixed for 30 years, Conventional loans are closing with rates as low as 3.75% fixed for 30 years and finally investor loans are closing with rates as low as 4.0% fixed for 30 years. Interest rates this low truly are UNPRECEDENTED and my clients are getting amazing loans on purchases and refinance loans right now.

If you have been thinking about refinancing your home or moving up and buying a bigger home, it may be a great time to do it. Please feel free to give me a call and I’ll do a free property analysis to help estimate the value of your home and then I’ll get you in touch with my mortgage lender to get you hard numbers about your options for anew mortgage.

Denver Home Price Champe Map - July 2012

(Contact me and I will send you a hard copy of this map or specific to your area)

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

May 2012 Denver Real EstateQuick Stats

Denver Metro Single Family Housing Stats:

Active Listings: 8,705

* Down 38% from May. ‘11

Under Contracts: 4,818
* Up 25% from May. ‘11

Solds: 3,768

* Up 24% from May. ‘11

Average Price: $307,896

* Up 10% from May. ‘11

Average Days on Market: 78

* Down 28% from May. ‘11

Denver Metro Condo Housing Stats:

Active Listings: 1,886

*  Down 52% from May. ‘11

Under Contracts: 1,090

* Up 19% from May. ‘11

Solds: 857

*  Up 23% from May. ‘11

Average Price: $179,253

*  Up 12% from May. ‘11

Average Days on Market: 81

*  Down 28% from May. ‘11

Real Estate News – Shadow Inventory: Fact or Fiction?

For many years it has been fashionable among the local real estate intelligentsia to assert that there’s a major “Shadow Inventory” problem lurking in our future; i.e. that there is a huge amount of inventory not yet on the market that will descend upon us at any time and drive home prices down precipitately. While this may be true for many large cities in the US, I believe it isn’t true here.

First, let’s define the term Shadow Inventory. I define it as the number of properties that are either REO (bank-owned) or 90+ days late on their mortgage in a given area that are not yet on the market.

If the inventory is REO, that property could be:

·         Actively on the market, available for purchase today
·         On the market, but under contract
·         Not actively on the market – a part of the Shadow Inventory that has to be sold eventually

If the inventory is consumer-owned, the property could be:
·         Actively on the market, available for purchase (as a short sale or regular sale)
·         Under contract or pending bank approval of short sale terms
·         Not on the market – but likely to get a loan modification
·         Not on the market – but likely to be sold as a regular sale or short sale soon, in an orderly way
·         Not on the market –the owner is in denial, and the home will eventually become a foreclosure. Tis is still part of the Shadow Inventory that may hit the market someday.

I believe the metro Denver area does not have a large Shadow Inventory based on three key data points:

1.      According to the National Association of Realtors (NAR), Denver has had the highest average home appreciation gain of any of the 30 largest cities in the U.S. in the past three years, at $29,900. The average gain (loss, actually) of the largest 30 cities is -$18,400. Just for kicks, the worst performing city is Las Vegas, at -$59,900.

2.      Because Denver’s home prices didn’t appreciate as much during the bubble as other cities, and began the correction before most markets, Denver has already processed the majority of its REO inventory. According to NAR, metro Denver has only 9,740 homes currently owned by banks. Only San Antonio and Kansas City have smaller REO inventories. Miami has the largest REO inventory with 159,000 properties.

3.      Denver has the second fewest number of 90+ days late residential mortgages of the top 30 cities in the country at 29,000, again according to NAR. Chicago has 284,000 and Miami has 124,000 90+ days late mortgages respectively.

Buyers – Shadow Inventory: Fact or Fiction? (cont.)

My contention is that while there certainly is Shadow Inventory in our market, there is no Shadow Inventory PROBLEM. Why? Because we have relatively very little Shadow Inventory in our market, and even on the extremely slim chance that a large portion of that inventory suddenly and magically descended on the market in a short period of time, we currently have such a low level of inventory it would actually help our market, not hurt it! Five years ago when we had 27,000 properties on the market, a huge influx of inventory would indeed have been a problem. Today, with an inventory of only 10,000 properties, a dump of 8,000 more properties on the market would only get us back to 2010 inventory levels. In fact, we need this inventory to sell!

So when you read a national news article that describes the Shadow Inventory menace understand that in some part of the country it is indeed a potential problem, but not here. Our Shadow Inventory problem is pure fiction

Sellers – What’s the Real Estate Landscape for a Home Seller These Days?

What does the real estate landscape look like for seller’s these days? Well, let’s review the facts:

1. Metro Denver home prices are up a whopping 10% in the past year.
2. The inventory of homes on the market is the lowest in 13 years.
3. The number of homes under contract is up 25% over this time last year.
4. The average Days on Market for a home is down 28% in the past year.

Add it all up and you get the best seller’s market in a decade. So then, how are sellers reacting to this market? Exactly the same way you would. They are hiking prices, testing the limits of the market, and pushing the envelope. Call me if you want to discuss what your home is worth in this new seller’s market!

Investors - – The Best Investor Market in Years

The decisive uptick in our local real estate market has moved many investors off the fence and into the game. Both buy-and-hold and fix-and-flip investors are finding terrific opportunities to take advantage of this fast changing real estate market.

Long term, buy and hold investors are enjoying a market with very low vacancy rates, historically low interest rates and very high home affordability (home prices, taking into account interest rates). Taken all together we have a market that highly favors buy-and-hold landlords. Most of our clients who buy a single family home as a rental are on track to have the house paid off in 12-14 years. As amazing as that sounds it is very achievable in this market if you know what to buy, where to buy, and how to buy.

Fix and flippers are experiencing demand for their remodeled properties that they haven’t seen for many years. There is a major lack of fixed-up, quality homes on the market, so nice properties in nice neighborhoods are leading the surge in pricing. Because so much of their competing inventory is bank-owned or shortsale properties, their properties shine by comparison. The issue, as always, is finding the right property. I have a tool called the Your Castle Hotsheet that analyzes every new property on the market and tells me, among many other things, how much below market value the property is. Call me so I can show you how it helps me find great deals for my buyers.

YCRE in the News –YCRE is the 2^nd Largest Independent on the Front Range!

Your Castle is proud to announce that according to the 2012 edition of the Denver Business Journal Book of Lists we are now the second largest independent (locally owned, non-franchise) real estate company on the Front Range, and the ninth largest real estate company overall! What started eight years ago as a few real estate investors banding together to find better deals for themselves has grown into a full-service real estate agency dedicated to using technology and our local knowledge to help you find the best deals on the market and sell your home for the highest price possible. Thank you for your support – we couldn’t have done it without you!

Mortgages

Mortgage rates are remaining at historic lows.  We've seen rates below 4% for primary residences and 4.75% or less for investment properties.  We've also seen many homeowner's take advantage of 15 year loans which can have rates as low as 3.25% or less and allow you to pay off your loan in half the time.  If you've been waiting for mortgage rates to decrease before you buy a new property or refinance your current home, now might be a good time to review your options.  

Neighborhood Spotlight – Whittier

The Whittier neighborhood was named after the poet and abolitionist Greenleaf Whittier (seriously). Sitting between 23^rd Ave, Martin Luther King Blvd., York and Downing, Whittier was first populated as a Capitol Hill suburb more than a century ago. Most of the homes were built in the 20^th century and lie behind wonderful old tree-lined streets making this neighborhood an inviting place to call home. Because it’s so close to downtown, Whittier has terrific access to many of Denver’s treasures like the Denver Zoo, City Park, the Denver Museum of Nature and Science, and so much more. It’s city living without the city hassles and has been a prominent Denver neighborhood for over 100 years.

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

April 2012 Denver Real Estate Quick Stats

Denver Metro Single Family Housing Stats:

Active Listings: 8,353

* Down 40% from Apr. '11

Under Contracts: 4,622
* Up 19% from Apr. ‘11                                   

Solds: 3,133
* Up 15% from Apr. ‘11

Average Price: $298,712

* Up 10% from Apr. ‘11

Average Days on Market: 90

* Down 17% from Apr. ‘11

Denver Metro Condo Housing Stats:

Active Listings: 1,901

* Down 52% from Apr. ‘11

Under Contracts: 1,059

* Up 22% from Apr. ‘11

Solds: 758
* Up 9% from Apr. ‘11

Average Price: $178,231
* Up 12% from Apr. ‘11

Average Days on Market: 91

* Down 26% from Apr. ‘11

Absorption Rate is used to determine how many months it will take to existing inventory of homes to sell.  If it takes 0-5 months to sell, it is a Seller’s Market, 5-6 months is a Balanced Market, 6+ months is a Buyer’s Market.

The Absorption rate for Denver Metro area over current 3 months was 2.7 whereas, in prior months it was 5. which indicates that we are now in a Seller’s Market for the upcoming season.

 Real Estate News – Our Sizzling Sellers’ Market

Holy moly! The metro Denver real estate market is in a frenzy with the strongest sellers’ market in more than a decade. As our inventory of homes for sale has plummeted and the economy plods along towards recovery we find ourselves with a huge imbalance in supply and demand: too many buyers and not enough sellers. The numbers speak for themselves:

• The inventory of houses for sale is down 40% over this time last year
• Inventory dropped another .7% from last month’s already super low level
• The inventory of condos for sale is down 52% over this time last year
• The price of the average home is up a whopping 11% over this time last year
• Prices leapt 5.2% in just the past month
• The number of properties under contract is up 19% over this time last year
• 55% of homes on the market are currently under contract – a level not seen since the 1990s

This is one of those be-careful-what-you-wish-for scenarios. A few years ago we were bemoaning the fact that we had a flood of inventory that we couldn’t sell. Sellers were frustrated because their properties would languish on the market. Buyers were extremely picky because there was so much inventory and so little urgency to buy – everybody figured the inventory would stay high for a long time and prices would keep trending downward.

Well, the tables have turned and now it’s GO time. When I take a listing anywhere under $400,000 I look at the sold comps to give me an idea of what properties in the area sold for in the past 6 months. Next, I look at the active listings in the area, which more accurately describe the market at this moment in time. But to get to a final price I then sometimes add $10,000 or $15,000 MORE to the asking price than the comps would justify just because it’s such a blistering market! Why not? There are more buyers than we know what to do with and my last several listings have all had multiple offers above asking price. The market is actively testing the ceiling on prices and so far we haven’t hit it. Demand continues to outpace supply and prices are lurching upward as a result.

The moral of the story is this is a once in a decade market with sellers testing the upper limits of prices and buyers are willing to pay. Call me if you’re considering a move so I can explain in more detail what’s happening right in your neighborhood.

Buyers –Inventory is Plunging

Buyers today are facing a new reality in the marketplace. For the past several years there has been a surplus of inventory making it a buyers’ market. Buyers could afford to be very finicky since there seemed to be an endless supply of properties coming on the market. No more. As you see in the graph, our inventory is at its lowest point since 1995. And since our population is 25% higher than it was in ’95, it turns out we have the LOWEST INVENTORY PER CAPITA EVER in our market. This means that now more than ever buyers need to be well prepared and work with a capable real estate agent to find the property that’s right for them.

Sellers – Home Prices are Shooting Up!

Take a look at the graph below. What it shows is the result of the stunning sellers’ market we’re experiencing. With demand far outpacing supply it should be no surprise that home prices are rising quickly. The average home price in April the past four years was about $266,000, ranging from $251,000 to $275,000. The average home price for April 2012 was $299,000! So if you’ve been hesitant to put your property on the market now may be the time. Feel free to give me a call to discuss your situation and I can create a detailed Comparative Market Analysis on your home and let you know what your home is worth in today’s market.

Investors – It’s a Great Time to Sell a Fix & Flip

Sellers are not the only ones taking advantage of today’s low inventory and rising prices. Savvy investors are getting in on the game as well. Gone are the days when a fix and flip might sit on the market for months unnoticed. Today’s remodeled properties are selling especially quickly because while the inventory of all homes is very low, the inventory of quality, remodeled homes is much lower still. Fully 35% of the inventory in metro Denver is distressed, meaning bank owned or shortsale properties. Distressed property is almost never in move-in ready condition. So, investors with nicely rehabbed properties are selling quickly and for the best premium as buyers flock to their properties. At Your Castle, 35% of our closings are for investors so we have a great deal of in-house tools and expertise to help you along. If you’re interested in investing in real estate call me and we can discuss the many different strategies and styles of real estate investing.

 

 

YCRE in the News –Your Castle in 5280 Magazine

Your Castle takes great pride in being a thought leader on the subject of metro Denver real estate. As such, our agents, managing brokers, and owners are often quoted in the press on the state of the local real estate market. 5280 Magazine’s May 2012 edition had an in-depth analysis that we were glad to contribute to. It’s a great article and worth reading. Here’s an excerpt: “Although the worst of the foreclosure crisis is probably over, banks are still sitting on countless repossessed homes nationwide. It’s frustrating buyers, sellers, and brokers alike, especially in a relatively strong market such as Denver. ‘Right now we have about 10,000 properties on the market; four years ago we had about 27,000,” says Charles Roberts, a co-owner and managing broker with Your Castle Real Estate. ‘Our inventory is down 39 percent from last year for single-family homes, and more than 50 percent for condos. It’s a dramatic change, and it’s driving everything right now.’”

To read the full article go to: http://www.5280.com/magazine/2012/05/denver-real-estate-2012.

 

 

Mortgages – Record Home Affordability

Mortgage rates are continuing to stay at the lowest points in history and it remains a great time to buy.  In this recent news story http://realtytimes.com/rtpages/20120423_realestateoutlook.htm we learned that home affordability is at an all-time high. The home affordability index indicates that right now you can buy MORE house for LESS money than any time in Denver history. The combination of low interest rates plus low home prices are making this a great time to buy and a great time to take advantage of a new mortgage. 

 

 

Neighborhood Spotlight – The Byers Neighborhood

Located between Broadway, Downing, Alameda, and Speer, the Byers neighborhood was named for William N. Byers, the founder of Denver’s first newspaper, the Rocky Mountain News. Byers offers city living in a neighborhood of small apartment complexes and single family homes. It’s within walking distance of beautiful Washington Park and also just a few minutes car ride to downtown Denver and Cherry Creek shopping and cultural events. Residents love being close to the famous independent Mayan theatre and an ever growing assortment of second-hand bookstores, art galleries, shops, boutiques, funky bars and high-end cuisine.

 

 

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

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