Denver Colorado Real Estate

The Week in Review (Ending April 29, 2011)

From Fidelity National Title:

The Week In Review

MONDAY, April 25th
New home sales rebounded in March, gaining 11.1% to an annual pace of 300k, better than expectations for a smaller gain to a rate of 275k. The bounce last month moved new home sales above their record low level in February but does not significantly alter protracted weakness in the sector. Sales remain 21.9% below their year ago level and are off 78.4% from their record high of July 2005. New home prices are also struggling to find a bottom as the median prices for a new home fell 4.9% over the past year to $213,800. Despite lean inventories and high affordability new home sales continue to bounce along the bottom. The new home market will begin to recover once the competition from lower priced distressed properties is eliminated.

TUESDAY, April 26th
The S&P/Case-Shiller 20 city home price index fell 0.2% in February from January and was down 3.3% from a year ago. Only 1 of the 20 metro areas tracked posted a year-on-year increase. Phoenix had the largest decline at 8.5% while Washington DC had the largest gain at 2.8%. On a yearly basis, home prices have declined for the fifth straight month leaving them just 0.4% above a cyclical nadir in May 2009.

Consumer confidence rose in April, scoring 65.4% up mildly from a 63.8% reading in March. Consumers are still worried about their prospects in the current economy though opinions about job creation and hiring improved. Confidence levels remain mired in recessionary territory but will come back as labor and housing markets and the overall economy recovers.

WEDNESDAY, April 27th
The MBA mortgage applications index fell 5.6% to 441.2% for the week ending April 22. The purchase index dropped 13.6% as the refinance index fell 0.6%. Mortgage application activity remains weak. Once home prices bottom, which may be difficult to predict given foreclosure problems, housing demand will return.

As widely expected the Fed held rates at current levels, stated its intentions of completing the QE2 asset purchase program and generally viewed economic conditions as moderately stronger and stable. The key fed funds target rate will be maintained near zero for an extended period of time; the Committee will complete its purchases of $600 billion in longer-term Treasuries by the end of June; while acknowledging improvement in labor markets and the economic recovery, the Fed still signaled concerns about the high unemployment rate and higher energy prices though viewed the effects of higher inflation as mainly transitory.

THURSDAY, April 28th
The economy grew at a 1.8% rate in the first quarter according to the advance estimate for GDP, modestly lower than expectations for a 2.0% increase. This was the seventh straight quarter that the economy expanded following contraction in five of the previous six quarters. Inventory investment, consumer and business spending were strong contributors to growth while net exports, residential investment and government purchases subtracted from growth. The GDP price index, an economy-wide measure of inflation rose 1.9% less than expectations for a 2.3% gain. Economic growth was slow and below estimates last quarter but is expected to pick-up in the remaining quarters of this year.

Jobless claims rose 25k to 429k for the week ending April 23. The volatility last week may be holiday related however it is the third week claims have been above the 400k mark which may indicate stalled improvement in labor market conditions. Initial claims figures in future weeks will be needed to confirm this trend.

Pending home sales rose 5.1% in March to 94.1, better than expectations for an increase of 1.5%. Pending home sales remain 11.4% below March of last year but it’s a tough comparison because of the tax credit fueled sales at that time. The pending home sales index is trending higher overall suggesting that existing home sales will continue to gain modestly over the next couple of months.

FRIDAY, April 29th
Personal income rose 0.5% in March as consumer spending increased 0.6%. Income growth has accelerated in the last few months because of the cut in social security withholding. Higher take home pay has resulted in stronger spending which contributed to Q1 economic growth. A closely watched inflation gauge contained in this data series the core PCE price index was up just 0.9% from a year ago, indicating subdued inflation pressures for now.

First thoughts - even the good news seems to come with baggage.  This is good, but not really that good.  I am feeling a bit of a negative tilt over the last few weeks.  Jobless claims seems to be the starting to go the wrong direction again.  They had worked their way down under 400K for a short period of time, but only a short period.  Right now, I am not seeing a lot to get excited about as we inch closer to summer.  Hopefully the ensuing weeks will prove me wrong.

Pending Home Sales Rise Again in March

From Realtor Magazine:

March saw another increase in pending home sales, with contract activity rising unevenly in six of the past nine months, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 5.1 percent to 94.1 in March from a downwardly revised 89.5 in February. The index is 11.4 percent below 106.2 in March 2010; however, activity was at elevated levels in March and April of 2010 to meet the contract deadline for the home buyer tax credit.

The data reflects contracts but not closings, which normally occur with a lag time of one or two months.

Read the entire article here.

Not out of the woods yet and I am not sure that we can even see the light at the end of the tunnel, but all you can hope for is that we are moving forward in the right direction and this seems to indicate that we are.  As I have been saying, time will tell, but at least we are falling forward at this point.

Metro Denver Assessors Reducing Most Valuations

From the Denver Business Journal:

More than 750,000 property owners throughout the seven-county Denver metro area will receive notices of valuation in the mail in the next several days, with most expected to get news that their property values are lower.

The new valuations are based on an 18- to 24-month data-gathering period that captured market prices as they were on June 30, 2010, according to the county assessor’s offices of the seven counties, which issued a joint press release on Wednesday.

Read the entire article here.

Jumbo Mortgages Set to Decline in October

From Realtor Magazine:

More buyers in high-cost areas may be motivated to purchase a home before an Oct. 1 deadline when the government plans to scale back the size of “jumbo” mortgages it guarantees in costly real estate markets.

On Oct. 1, the maximum loan amount that Fannie Mae and Freddie Mac is set to decrease from $729,750 to $625,500. This might make mortgages more expensive or more difficult to get for buyers in high-cost areas, MSNBC.com reports.

Read the entire article here.

How to Reduce Property Taxes by Appeal

From Fox 21 in Colorado Springs:

COLORADO SPRINGS, COLO. -- You may not like paying property taxes, but you might be able to have a say in how much you pay.

If you are a homeowner in El Paso County, you can expect to receive your 2011 home valuation this week.

El Paso County re-values the monetary value of your home every two years, and your property tax is based on that valuation.

But, if you think your house is overvalued compared to the rest of the neighborhood, then you can appeal to pay less.

Money Coach Bill Stanley says, the first thing you need to do is compare the prior year value with the current year value.

"To support your appeal, you must provide information on what is called 'the market approach to value'", says Stanley. "Provide a list of similar properties in your neighborhood that have sold in the previous 18 months."

Read the rest of the article and watch the video here.

Every little bit can help.  While challenging and assessment can be tiresome, if you do have a case, then you can save some money.  Why pay taxes on a property if the value has decreased significantly?

New-Home Sales Rise 11.1 Percent in March

From RISMEDIA:

RISMEDIA, April 26, 2011—(MCT)—Sales of new homes rose 11.1 percent in March, the Commerce Department recently noted, marking a mild improvement from the worst-ever showing as the dampening effect of winter storms and an expiring California tax credit ware off.

The reading of a seasonally adjusted annual rate of 300,000 represented a 21.9 percent nosedive from March 2010 levels. However, the level beat a MarketWatch-compiled economist estimate of 290,000, and February’s low reading of 250,000 was revised up to 270,000.

Analysts had attributed February’s weakness in part to winter storms that depressed figures in the East and the Midwest, as well as the expiration of a California tax credit. The data in March bore out that view.

Sales in the Northeast jumped 66.7 percent, those in the Midwest improved 12.9 percent and those in the West increased 25.9 percent, while sales in the South edged 0.6 percent lower.

Read the entire article here.

Slowly, but surely in the right direction.  What I am hoping to see is some traction that continues to build steam throughout the summer.  New Home sales do a lot for the economy and if they can get relatively healthy, it should help improve other areas. 

The Forgotten Fifth Wall

From Benjamin Moore:

How painting a ceiling can dramatically alter a room's look.

I am personally a fan of painted ceilings as they are the forgotten wall that is usually left "builder white", but with the right paint color, a ceiling can help finish off a room.  The one thing to remember is that you typically want to paint the ceiling with a flat base as semi-gloss or gloss will show drywall tape lines.

Click to read the different ways that you can dress up your ceiling.

The Week in Review (Ending April 22, 2011)

From Fidelity National Title:

The Week in Review

MONDAY, April 18th
The NAHB housing market index dropped a point in April to a level of 16. Builders gave lower scores for both present single family home sales and sales six months from now while foot traffic through model homes increased modestly. Homebuilder sentiment remains mired near its cyclical low of the past two years. Builder confidence in the new housing market will likely remain low until the large supply distressed properties are worked through the market and prices have stabilized. On a positive note, job and income growth are improving which will boost demand and move recovery in the housing market forward.

TUESDAY, April 19th
Housing starts rebounded in March, gaining 7.2% to an annualized pace of 549k better than expectations for a smaller gain and a rate of 525k. Despite this, housing starts remain 13.4% below their year ago level. The way back for new residential construction remains a rocky road with lots of volatility. Single family housing starts jumped 7.7% in March to an annual pace of 422k and are down 21.1% from March of last year. The trend is stable at a low level for in new, single family construction. Multifamily starts were up 5.8% last month to an annual rate of 127k; this follows an extreme decline of 39.4% in February. Building in the multifamily sector has been and remains quite volatile but is trending mildly higher. Housing permit issuance gained 11.2% to an annual rate of 594k suggesting continued mild gains in new construction in coming months. The pick-up in new construction will have support from the ongoing economic recovery and the lean inventory of new homes for sale. Downside risks to the outlook remain mainly in the form of distressed properties being cleared from the market this year.

WEDNESDAY, April 20th
The MBA mortgage applications index increased 5.3%to 467.5% for the week ending April 15. Both purchase and refinance applications rose on the week. 10.0% and 2.7% respectively. This was the first gain in the index in the past 4 weeks which is probably due to a decline in mortgage rates. Contract rates for the 30-year fixed dropped 15 basis points last week to 4.83%. Despite the gain, applications activity remains weak and will not gain significantly until prices bottom out which may be toward the end of this year.

Existing home sales rose 3.7% in March to an annual pace of 5.10 million. The modest rebound last month did not completely reverse the prior month’s 8.9% decline. Nevertheless, home sales are now above the key 5 million mark which establishes a fundamental level of support for housing. Last month, distressed sales accounted for nearly 40% of all sales, all cash transactions accounted for a record 35% of total sales while investors made 22% of purchases. Existing home sales are now 6.3% below their tax-credit fueled level in March of last year. Inventories increased 1.5% in March to 3.549 million which represents an 8.4 month-supply at the current sales pace. Prices continue to be hard-hit with the median price for an existing home down 5.9% over the past year to $159,600. Falling prices and still tight credit remain the major downside risks to housing; however, we may see the mild upward trend in home sales continue this year as job and income growth supports demand and high affordability draws in buyers.

THURSDAY, April 21st
Jobless claims fell 13 k to 403k for the week ending April 16. This is the second week initial claims have been over the 400k mark suggesting that improvement in labor market conditions has slowed which may show up as downtick in April job creation.

The FHFA monthly purchase price only index fell 1.6% from January to February and was down 5.7% from February one year ago. Bear in mind that the FHFA house price index includes homes purchased with conforming loans only which may skew it to the downside. Nevertheless, the drop in home prices in February is broadly consistent with weak home sales and rising foreclosures during the month. Distressed sales will continue to weigh on prices likely through 2011.

FRIDAY, April 22nd
Holiday - Markets Closed.

Still looking/hoping for new home sales to rebound a little more - it's good to see them at least getting permits to build regardeless of the state of the market.  A small uptick in resale homes is also encouraging.  But unemployment claims are still above the 400,000 level and even though they went down some, they are having a tough time cracking and staying under that level.  Slow, but at least some progress.

5 Strategies to Rebuild Your Credit after Foreclosure

From RISMEDIA:

RISMEDIA, April 22, 2011—(MCT)—If you’ve been through a foreclosure, you may wonder if there is hope for you to become a homeowner again. The answer is yes, but it will take a while. “It doesn’t mean you’ll never be a homeowner again,” said Linda Davis-Demas, director of housing at Consumer Credit Counseling Service of Greater Dallas.

But you’ll need to examine what caused you to fall behind on your mortgage and take steps to fix the problem. “You have to look at what were the reasons you didn’t make the payment,” said Davis-Demas. “Was it budgeting? You can modify that type of behavior.”

A foreclosure is a major hit to your credit history and stays on your credit report for seven years.

“Foreclosure is one of the FICO seven deadlies,” said credit expert John Ulzheimer, referring to the dominant FICO credit score. “It’s considered a major derogatory item, regardless of the back story”— whether it’s a job loss, rate reset, underemployment or other reasons.

Read the 5 strategies to rebuild your credit after foreclosure.

Existing-Home Sales Rise in March

From Reator Magazine:

Sales of existing-home sales rose in March, continuing an uneven recovery that began after sales bottomed last July, according to the National Association of Realtors®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit.

Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”

Read the entire article here.

We are heading in the right direction, albeit in a slow fashion which suits me just fine.  I'd rather see the market move ahead in this fashion rather than the spike that we saw the last time.  It feels to me like we are building a more solid base this time, so I would hope that we won't be as succeptibe to the huge swings that we have seen in the past.  I still believe that real estate is a good investment due to the low prices and the low interest rates available.  You need a place to live - why pay someone else's mortgage (ie. landlord) when you could be paying your own?