Denver Colorado Real Estate

Economy Embarking on Period of Expansion, According to Fannie Mae’s Economic & Mortgage Market Analysis Group

From RISMEDIA:

RISMEDIA, February 28, 2011—Continued improvements in economic activity driven by strong growth in consumer spending are moving the economy beyond the recovery phase and into a period of expansion, according to the February 2011 Economic Outlook released by Fannie Mae’s Economics & Mortgage Market Analysis Group. For 2011, economic growth is projected to accelerate to 3.7%, up from 2.8% economic growth in 2010.

Housing has yet to see robust movement and continues to lag the rest of the economy, according to the group. On the upside, the excess supply of housing appears to have peaked. In addition, the rental vacancy rate fell, indicating the excess supply of housing is being worked off slowly—a trend necessary for housing to return to stability. The downward trend in the rental vacancy rate is consistent with the downward trend in the homeownership rate, which implies a rising share of households have chosen renting over owning. The homeownership rate fell to 66.5% in the fourth quarter of 2010, down from a peak of 69.2% in late 2004.

“We have confidence that the economy is on stronger legs with a sustainable growth path. Our projected annual growth rate for 2011 is nearly a full percent higher than the annual growth rate for 2010, which is a significant event,” said Fannie Mae Chief Economist Doug Duncan. “Economic cross currents such as the lack of sustained strong job growth, state and local fiscal issues and geo-political uncertainty in the Middle East present downside risks. Nevertheless, the positives outweigh the negatives.”

Like I have said before, we do seem to be pointed in the right direction, but we are not setting any records for getting there.  Will this positive news for the economy spill over into the real estate market?  I have to imagine that it ultimately will, but I do not see it as of yet.  The nice thing is that if the economy does continue to improve as they are saying, I truly believe that it will have to positively impact the real estate market, but I just don't know the timeframe.  The big questions are: are we at the bottom, or is there more to go?, and can you pick the bottom?  Real estate is a longer term investment and pays out in more than just appreciation - tax deductions and pride of ownership are just a couple - so the bigger question is where the real estate market will be in 5 years and not in the next few months?  Pesonally, I believe that it will be higher, but time will tell.

For more information, visit www.fanniemae.com.

30-Year Rates Back Below 5%

From NAR (National Association of Realtors):

Mortgage rates were on the decline this week, a welcome sign for potential home buyers or those looking to refinance.

The 30-year fixed rate mortgage averaged 4.95 percent this week, down from 5 percent the week prior, according to Freddie Mac’s weekly mortgage market survey. Last year at this time, 30-year rates averaged 5.05 percent.

The 15-year, fixed-rate mortgage also dropped for the week, averaging 4.22 percent, down from last week’s 4.27 percent. The 5-year adjustable-rate mortgage dropped slightly to 3.8 percent, compared to 3.87 percent the previous week.

“Low mortgage rates and home prices are sustaining affordability in the housing market,” says Frank Nothaft, Freddie Mac’s chief economist. The National Association of REALTORS® reported earlier this week that existing home sales rose for the third consecutive month in January and were at the strongest pace in eight months.

Source: “30-Year Fixed-Rate Mortgage Eases Just Below 5 Percent,” Freddie Mac (Feb. 24, 2011)

The Week in Review (Ending February 25, 2011)

From Fidelity National Title:

The Week in Review

MONDAY, February 21st
PRESIDENTS DAY
All Markets Closed

TUESDAY, February 22nd
The S&P/Case-Shiller 20-city home price index fell 0.4% in December from November and is down 2.4% from its year-ago level in December 2009. As recently as May 2010, home prices were 4.7% above their year ago level. In December, housing prices were up in 2 of the 20 metro areas on a yearly basis. Detroit had the largest decline at 8.2% while Washington DC posted the largest gain at 4.1%. Renewed price weakness reflects the large number of distressed properties that a moving through the market. Home prices remain at risk for further declines this year as the number of foreclosures continues to rise.

The consumer confidence index rose to 70.4% in February from a level of 64.8% in January. Consumers are definitely feeling better about economic conditions. The index level has broken to the high side of its 45% to 60% range that it has been in the last two years. However, confidence levels while improved remain subdued. Details in the data show consumers remain reticent about current conditions but fairly optimistic about the future. As the economy strengthens and creates more jobs, consumer confidence will follow.

WEDNESDAY, February 23rd
The MBA mortgage applications index jumped 13.2% to 476.0% for the week ending February 18. The purchase index was up 5.1% on the week as the refinance index increased 17.8%. Even with the gains, total applications remain 13.4% below their year ago level. Mortgage activity in the last week may have responded to a dip in rates. Contract rates for the 30-year fixed rate mortgage fell 12 basis points to 5.00%.

Existing home sales increased for the third straight month in January rising 2.7% to an annual pace of 5.36 million. This follows increases of 12.5% in December and 5.9% in November. With January’s gain, this was the highest level of existing home sales since May 2010. Existing home sales are now up 5.3% from one year ago. First-time buyers accounted for 29% of all purchases down from 33% in December; investors accounted for 23% of purchases up from 20% in December and all-cash sales rose to 32% last month from 29% in December. NAR economists correlate distressed sales with high all-cash and investor sales. Investors are snapping up undervalued properties, paying cash for immediate returns and appreciation down the road.

Notice how investors are accounting for a lot of the inventory movement.  While many of them are cash buyers, many are also taking advantage of the low non-owner occupied interest rates.  Investors are often times contrarian in thinking and do things when others don't.  This means that investors, while getting good returns on their rentals and taking advantage of the strong rental market, get that prices will not drop forever.  Real Estate is a long term investment and the market may still go down, but ultimately, real estate prices will recover.  They understand that picking bottoms are nearly impossible, but also don't want to have to pay higher prices when markets rebound.  Think 5-10 years down the road when the market has recovered - they will be sitting pretty with solid returns on rents and also probably a decent amount of equity appreciation.

THURSDAY, February 24th
Jobless claims decreased by 22k to 405k for the week ending February 19. This followed a 28k surge in the prior week that may have been weather related. For all of 2010, initial claims for unemployment averaged 457k a week; so far this year jobless claims have fallen to an average 416k a week. This indicates that the pace of layoffs has slowed but hiring has yet to begin in earnest. The labor market is improving albeit at a very slow pace.

New home sales dropped 12.6% in January to an annual pace of 284,000, one of its lowest levels in the last 48 years of record keeping. January’s decline almost wipes out December’s 15.7% gain. The volatility in the last two months is related in part to the expiration of the California new home sales tax credit at the end of last year. It will likely be later this year when we start to see any significant improvement in the new home market.

FRIDAY, February 25th
Fourth quarter GDP was downwardly revised to a 2.8% rate of growth from the advanced estimate of 3.2%. Over the past year the economy has grown at a 2.7% rate, the first annual increase since 2007. Even though fourth quarter growth came in below expectations it does not significantly alter the outlook for stronger growth in 2011 with a subsequent increase in new jobs.

Bad/ Good.  Some bad/ Some good.  I am feeling a theme start to develop here in 2011.  We are making some strides towards recovery, but by no means are we on our way.  Looking for some solidity in forecasts/ numbers and hopeful that we can see that in the near future.

* Charming 2-Story in Alton Park * Open, Bright, Airy Floorplan *

* Charming 2-Story in Alton Park * - $238,900.00 Bedrooms: 3 Bathrooms: 3 Parking Spaces: 2 Year Built: 1997 Subdivision: Alton Park Lot Size: 3,049 Garage Size: 2 Car School District: Cherry Creek Square Footage: 1633 Agent Name: Sean Patrick Reilly Broker: RE/MAX Southeast MLS #: 957168 Basement Square Footage: 800 Price: $238,900.00 1274 S Alton Court Denver, CO 80247 View Map View More Photos Virtual Walk Through Search the IDX MLS for Free Free Home Valuation Free Home Buyer Webinar Dates Vital Information Regarding Buying a New Build Metro Denver Real Estate News Testimonials Range/Oven Full Refrigerator Dishwasher Sink Disposal Fireplace Hardwood Floors Security System Kitchen Island Vaulted Ceilings Basement Fenced Yard * $238,900 * Charming 2-Story in Alton Park * Open, Bright & Airy Floorplan * Cherry Creek School District * 1,633 Finished Square Feet (Main Floor & Upstairs); 800 Unfinished in Basement * 3 Bedroom, 3 Bathroom (Full, Full, Half) Home * Basement - Large, Open, Unfinished, 3 Egress Windows, Rough-in Plumbing for Future Bathroom, Laundry Facilities * Living Room - Volume Ceilings, Open, Bright * Kitchen - Hardwood Floors, Raised Panel Cabinets, Smooth-top Stove, Built-in Microwave, Dishwasher, Double Sink * Family Room - Hardwood Floors, TV Nook, Gas Fireplace * 2 Good Size Secondary Bedrooms Upstairs, Good Closets, Good Windows * Master Bedroom - Vaulted, Walk-in Closet, Master Bathroom w/ 2 Sinks, Plant Shelves * Backyard has Spacious Private Newer Deck, New Paver Patio, Fenced, Sprinklered * Air Conditioning * Pool Community * Updated Light Fixtures Thru-out * Also, Custom Paint Colors Thru-out * Custom Closets * New Door Handles * New Paint * Custom Window Coverings * Quiet Street * Sean Patrick Reilly RE/MAX Southeast Double Major - Real Estate & Construction Management – University of Denver 303.520.8700 Sean Patrick Reilly sean@seansellsdenver.com 303-520-8700 Powered by vFlyer.com Equal Housing Opportunity VFLYER ID: 4107241

All information in this site is deemed reliable but is not guaranteed and is subject to change

Free Home Buying Webinar Today (Friday 02/25/11 @ 3:00 PM MST)

Metro Denver Home Buyer Webinar Start Date and Time: Fri, Feb 25, 2011 03:00 PM - 04:00 PM MST Webinar Location: www.joingotomeeting.com Webinar ID: 446-131-414 View More Photos Upcoming Webinar Times / Dates Join Friday's Webinar Join Sunday's Webinar Sit back and relax from the comfort of your own home as I describe in detail the Home Buying Process - all you need is a computer and speakers. From "Thinking about Buying a Home" all the way to "The Closing Table", I will walk you through all the steps necessary to purchase your own home. Have a question during the webinar? Just ask it and I will address it in real time.* Learn about different types of financing products and how to get the most out of them Learn how to set up your own IDX MLS site to help you find available properties Learn about the new 2011 Colorado Real Estate Contracts Learn Step by Step of how a Colorado Real Estate Contract works Learn about what will be expected of you (due diligence) during the buying process Learn how to save money by becoming savvy about buying a home And much more..... To Attend: Go To www.joingotomeeting.com around the time Webinar is scheduled to start Next Webinar is: Friday, February 25, 2011 from 3-4pm (MST) Enter Webinar ID - 446-131-414 Also, Webinar: Sunday, February 27, 2011 form 2-3pm (MST) Enter Webinar ID - 543-655-878 Fill out information and you are good to go Webinar is free and will last about 1 hour. There is no obligation whatsoever by attending. Any questions, please give me a call @ 303.520.8700. * I am not able to offer advice regarding real estate transactions that you presently may be in as that is a breach of agency law in Colorado. I will use hypothetical situations as the basis of my webinar. Sean Patrick Reilly sean@seansellsdenver.com 303-520-8700 Powered by vFlyer.com VFLYER ID: 4068899

All information in this site is deemed reliable but is not guaranteed and is subject to change

Colorado foreclosure average price: $186,046

From John Rebchook with INDT:

The average price of a foreclosed home sale in Colorado last year was $186,046, according to a RealtyTrac report released on Thursday.That is about 8 percent higher than the national average sales price of $172,030, according to the Irvine, Calif.-based company that tracks and sells foreclosure data. In Colorado, foreclosures in 2010 accounted for 24.7 percent of all sales, compared with just under 26 percent for the nation. Total Colorado foreclosure sales in 2010 were down 25.4 percent from 2009, compared with a 31.1 percent drop for nation.

Other statistics on how Colorado compared against the nation:

    * The average foreclosure discount compared with a market-rate sale was 28.25 percent in Colorado, compared with 20.1 percent for the nation.
    * The average REO(Real Estate Owned) discount in Colorado, compared with a non-foreclosure sale, was 32.1 percent, compared with 36.3 percent for the nation.
    * The average pre-foreclosure discount in Colorado was 20.47 percent, compared with 15.06 percent for the nation.

Read the entire article here.

Residents migrate to Colorado's cities

From USA Today:

More residents are moving to urban centers across Colorado, especially in the Denver-Boulder area, while the number of Hispanics in the state soared, according to 2010 Census data released Wednesday.

Cities such as Denver, Thornton and Fort Collins saw robust population increases last decade, while the growth of rural areas was far slower, according to the statistics.

See the data from a County or City Perspective.

View and interactive map showing State census numbers.

View the entire article here.

Denver is just a great city, but it's also a misunderstood city.  Many out of towners that I talk to believe Denver is still a cow town and that we are snowed in all winter long.  While we do get snow here, it is nothing compared to parts of the east coast.  It'll snow one day and usually will be melted within a week or less.  I've worn shorts often during winter months as the sun will warm things up nicely here.  And one of the biggest things that I love about this state is the fact that we have about 300 days of sunshine per year which just helps to put you in a good mood year round.  I expect the trend of people moving into the state to continue for years to come as people "get" what a great state Colorado is.

Is Gray the Hot New Neutral Color?

By Melissa Dittmann Tracey, REALTOR® Magazine:

So that reddish pink Honeysuckle hue may be stealing all of the glory as far as being the “color of the year,” but more home owners also are seeing gray.

Gray has become the hot new neutral, and a popular choice particularly in kitchens for backsplashes, countertops, flooring, and cabinetry, according to a recent article in Newsday by Kristin Taveira, “The Grays of Our Lives: Moody and Mod, It’s a Hot Color in the Kitchen.”

Read the entire article here.

Stay Warm from the Ground Up: The Basics of Basement Insulation

While it is starting to warm up here in the Metro Denver area, we are probably due for a few more cold spells before we hit spring, so here are some suggestions from Charles Furlough with Pillar to Post inspections on how to keep your home warmer in the winter months...

From RISMEDIA:

RISMEDIA, February 23, 2011—If heat is escaping your home, this is the time of year when you’ll feel it—in most areas of the country anyway—not just physically, but in your wallet. Too many people spend way more than they should on heating a home due to heat escape. Your first instinct, if you’re spinning your wheels trying to heat your home, is that the culprits are things you see every day, from picture windows in the living room to your bathroom skylight. And those very well might be part of the problem. But you may not know that a huge potential source of heat loss is the basement. In fact, basements can account for over one-third of a home’s heat loss.

A major reason for this is incorrect insulation in basements. There are many types of insulation and the best choice for your basement is based on the area where you live and the age of your home: fiberglass, mineral wool blanketing, loose fill (cellulose, fiberglass or vermiculite) and spray foam. One of the most effective types, however, is rigid board insulation (typically either fiberglass boards or foam polystyrene boards). This type is typically the most expensive and tough to fit into irregular spaces, but many find the initial cost and effort well worth it in energy savings.

Even if the basement walls are well insulated, there’s another consideration: the foundation. Older foundations (like rubble, stone and brick) often suffer from moisture problems and should generally be insulated from the outside. Concrete foundations can be insulated from either the inside or outside if they’re structurally sound. Preserved-wood foundations generally must be fully insulated.

Crawl spaces should generally be insulated, as well, but must follow proper ventilation codes and guidelines (1 to 500, vent area to floor area) and the floor must be covered with a polyethylene moisture barrier.

You might be reading this feeling slightly helpless, thinking: How do I know if I’ve got a 1 to 500 ratio and how do I know what kind of insulation, if any, my foundation has? If you’ve recently moved and got a thorough, well-documented home inspection at closing—or if you’re in a new home and can contact the builder—you might already have records of this information. But in the absence of such records—or if you’re in an older home and feel that time and age has lowered your quality of insulation—call in a certified home inspector. Insulation quality isn’t something that you can check yourself, if you’re untrained; especially in older homes, to do so can be dangerous. A certified, professional home inspector can check your insulation and let you know where it’s lacking and how it can be improved or made more energy-efficient.

In addition to efficiency in energy use, safety is a concern too: When upgrading existing insulation to improve efficiency, it’s essential to follow local codes and laws. That’s where a local, certified professional home inspector can help as he or she will know what your area’s laws are. For instance, in many areas it’s necessary to place a fire-resistant gypsum board layer over existing insulation to reduce the emission of harmful gases in the event of a fire. In many cases, a home inspection reveals safety lapses, like the lack of such a safety measure. The result: suggested fixes that make your home not only warmer, but safer too.

Charles Furlough is vice president of Pillar To Post Professional Home Inspections.

For more information, visit www.pillartopost.com.

Home Sales Continue to Rise, Prices Remain under Pressure

From RISMEDIA:

RISMEDIA, February 23, 2011—For the first time in six months, home sales in the 54 U.S. markets surveyed in the RE/MAX National Housing Report are greater than one year ago. The year-to-year sales difference has been improving for three consecutive months. In January 2011 it turned positive with a 0.7% increase in sales from January 2010. The trend has been led by several cities experiencing double digit sales growth. Home prices, which have been relatively stable, were 4.6% lower than in January 2010. The inventory of homes for sale continued a downward trend, and is now 5.6% lower than January last year.

“We’re very pleased that sales this January are higher than last January, and we’re hopeful that this indicates even higher sales this spring,” said RE/MAX CEO Margaret Kelly.” Although inventories have been steadily shrinking for months, an increase in foreclosure activity could reverse this trend and produce additional pressure on prices.”

Transactions – Year-Over-Year Change
Closed Transactions fell 28.5% from December, which is not annualized and nearly equivalent to the historical December to January change. The year-to-year change in transactions has been improving for three months: -30%, -25% and -5%, and in January finally turned positive with a 0.7% increase over January 2010. Twenty-seven markets, including some that were hardest hit by the housing crisis, experienced exceptional year-to-year growth in home sales: Miami, FL +29.5, Tampa, FL +21.8%, Richmond, VA +20.5, New Orleans, LA +16.9%, and Phoenix, AZ +16.5%.

Median Sales Price – Year-Over-Year Change
Month-to-month home prices in the report’s 54 metro areas have remained even for three months with only fractional changes. However, in January prices dropped 6.6% from December and 4.6% from January 2010, which represents the largest year-to-year drop since May 2010. Still, 17 metro areas experienced a year-to-year increase in sales prices. Some key markets with rising prices include: Jackson, MS +20.9%, Indianapolis, IN +9.4, Pittsburgh, PA +9.1%, Tulsa, OK +5.9% and Washington, DC +3.3%.

Days on Market – Average of 54 Metro Areas
In January, the 54 metro areas averaged 99 Days on Market, up three days from December and eight days longer than January 2010. The RE/MAX National Housing Report shows that Days on Market has remained over 90 for four months in a row. Days on Market is the average number of days from listing to signed contract.

Months Supply of Inventory – Average of 54 Metro Areas
According to the RE/MAX National Housing Report, overall inventory was down 3.6% from last month and down 5.6% from January 2010. The Months Supply of Inventory in January was 10.1, which has remained above nine for six months and above 10 for the last three months. The Months Supply indicates how many months would be required to clear all the homes on the market at the current rate of sales. A balanced market of buyers and sellers is said to be a six-month supply.

For more information, visit www.remax.com.

Decent news in my opinion.  It is good to see inventory being bought, but prices will need to follow at some point.  The train has certainly not left the station as of yet, but continued absorption of inventory should only bode well for future home buyers.  As my mantra has been and will continue to be - baby steps.  Time will tell if this trend continues.