Denver Colorado Real Estate

April 2011 Denver Metro Area Monthly Real Estate Update

Thanks for visiting my site - please click on the video below to view my April 2011 Monthly Residential Real Estate update for the Denver Metro Area. 

Also, if you would like to receive the update in the mail, please send an e-mail me to seanre@msn.com - include the address where you would like this sent and your name.

To view the video in it's larger size, click the 4 arrows in the bottom of the right hand corner of the video to bring it to full size.  It is easier to read the numbers when it is enlarged.

Cash Buyers Continue to Dominate Market

From Realtor Magazine:

For the fifth-straight month, cash buyers accounted for at least 30 percent of existing-home sales, the National Association of REALTORS® reported this week.

In May, all-cash buyers made up 30 percent of existing home sales, which compares to 25 percent in May 2010 and 12 percent two years ago, according to NAR.

Low prices from foreclosures are tempting cash buyers--who are mostly investors--and prompting them to snag deals. They’re turning many of their housing purchases into rentals and immediately finding quick profits, housing experts say.

Read the entire article here.

I'd have to agree as I work with a few cash buyers here in the Metro Denver Real Estate Market.  Buyers seem to be drawn like moths to a flame to a bunch of well priced bank owned properties.  Many of these buyers are fixing the homes up and then renting them out due to the low vacancy rates out there.  Many are also fixing and flipping these homes and finding success with that route.  Regardless of which route these cash buyers are going, competition is often fierce for these homes that are priced well under market.  I have represented a buyer where are offer was 26th out of a total of 28 received on a home (no lie).  If you have the cash, there are definite deals out there and if you are thinking about building a real estate portfolio, now is definitely a good time to get that started.  Interested in foreclosed homes for sale in the Metro Denver Area, click here to see what is available.

How Long Before You Can Buy After a Foreclosure or Short Sale?

From Realtor Magazine:

A sluggish housing market has caused millions of home owners to lose their home to foreclosure, short sale, or deed in lieu of foreclosure. But once these former home owners get a better handle on their credit, how long do they have to sit on the sidelines until they can secure future financing to buy a home again?

As an article in The New York Times notes “there are plenty of asterisks and conditions” when it comes to how long a borrower must wait after a “significant derogatory event,” like a foreclosure or short sale.

In general, however, The New York Times notes that the longest wait to buy again will come if there is a foreclosure in the former home owner’s past.

Read the entire article here.

I do expect that this will bode heavily in the future as many people that have been foreclosed on, or had to short-sell their home will help to boost the real estate market in the not too distant future.  If you are interested in buying after a foreclosure, one of the best ways to ensure that you will be able to that is to keep you credit perfect after the short-sale or foreclosure.

Is The Virtual Home Getting Closer?

From The Charlotte Observer:

If you could remotely control any electronic gizmo in your house from your laptop or smartphone, what would it be? Would you make sure you locked the door, or perhaps see whether the housekeeper had used her access code at the appointed time?

Maybe you’d lower the thermostat setting for the air conditioner. Or perhaps dim the home lights from your uptown office.

Or…

“A lot of people use (the camera) to watch the dog,” according to Tara Davidson, a salesperson with Lennar Homes. “They really wonder, ‘What is my dog doing when I’m away?’”

She wasn’t kidding, but we’ll get back to the “pet cam” in a moment.

About a month ago, Lennar began including Schlage’s “LiNK” remote home-management system with its houses. It’s not the only builder that offers LiNK – Schlage is working with Shea Homes, too – and other technology companies offer remote-management systems. There’s an Apple-based automation system called Savant.

Read the entire article here.

Pretty interesting - it's just a matter of time, I think, before we can control just about everything at home from anywhere in the world.

You Were Served a Foreclosure Notice Where?

From Realtor Magazine:

For lenders who can’t find a defaulting home owner, they may turn to Facebook or other social networking sites to track them down. That’s what a lender in Australia did. The lender used Facebook to track the defaulting couple down and send them a foreclosure notice via the social networking site, AOL Real Estate reports.

The lender was unable to find a physical address or e-mail for a couple in Australia who defaulted on their six-figure mortgage. So the lender’s lawyer located them on Facebook, verifying the couple’s identities by matching up names, birthdates, and the fact that they “friended” one another.

Australian courts recently upheld the lender’s right to use Facebook to send foreclosure notices. The court ruled that the couple didn’t have any privacy protections on their Facebook accounts and were frequent visitors so it served as a reasonable way to send a notice.

Read the entire article here.

I guess it was bound to happen.  No longer do you need a physical address to find people - it's all on the net.  Not exactly what I would have done, but notice is notice.

Beware of this Scam that Cheats Homeowners out of Mortgage Payments

From Realtor Magazine:

Warn your home owner clients to beware of a scam growing in many parts the country that tries to trick home owners out of a month or two of their mortgage payments.

The Chicago Tribune referred to it as the “handoff rip-off” scheme, in which scammers send letters to borrowers informing them that a new company has assumed the management of their loans and to start making mortgage payments to the new company.

Read the entire article here.

It is always best to check and double check to make sure that any transfer/sale of your mortgage is legitimate.  Also, make sure that when you do call your mortgage company, refer to the phone number on a recent invoice, or obtain their phone number from their web-site.  This type of scam has been around for a long time and the reason it's still here is that it has worked in the past and is still working today.  If you are not certain if a transfer/ sale of your mortgage is legitimate, you can always call the real estate agent that sold you the home.

Graduates Getting Homes as Gifts?

From Realtor Magazine:

In the last year, more parents have been shopping for apartments or condos to give to their children, real estate brokers report. These parents are wanting to take advantage of the dropping real estate prices and low interest rates while also viewing the purchase as an investment, brokers say.

In New York, these lavish real estate gifts — many which serve as graduation presents — are often studios or small one-bedroom apartments.

“The parents see it as a long-term investment and a good place to park their money,” Barry Silverman, an executive vice president of Halstead Property, told The New York Times.

Read the entire article here.

Interesting potential gift, but it could make some sense.  Why not lock in low payments due to low prices and low interest rates to give you graduate a lower locked in housing payment for the long term.   The graduate is going to have to live somewhere, so why not make it a win-win.

Does the Wall Street Journal Think it's Time to Buy a Home?

From The Wall Street Journal:

Back in June 2006, when the housing market peaked, the prospect of a five-year national housing bust seemed unimaginable to most people. And yet here we are, with the latest Standard & Poor's Case-Shiller index showing that prices hit new bear-market lows, falling back to 2002 levels nationally and to 1990s levels in some battered regions.

Despite all the gloom, however, there are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody's Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer's market: There were about 15 million vacant homes in the U.S. last year, according to John Burns Real Estate ConsultingInc.—some 3.1 million more than normal.

Read the enitre article here.

It can certainly be scary our there - what if I buy and the market drops? - I could be out 10's of thousands of dollars!!!!  It is a tough call - it is always a tough to make a decision out of fear and especially out of the fear of losing money.  The big question is - can you call the bottom?  The rich get richer because they identify opportunities where they can make money and right now - buying homes is on the list of many.  Possibly not their primary residence, but they are definitely buying a lot of foreclosed homes and either fixing them to sell or fixing them to rent.  With interest rates as low as they are, it makes it a great time to buy - be it for primary or rental purposes.  Take a look at some mortgage calculators and play around with some numbers - what if the prices dropped a little more, but the interst rates went up - how would that affect your payment?  Take a look here.  My bottom line here is that residential real estate has been a solid investment for many, many years - while it's taken a hit lately, it will come back.  Look at the stock market from a few years back - would you have been a buyer on the way down, or are you a buyer today near it's short term peak?

The Week in Review (Ending June 17, 2011)

From Fidelity National Title:

The Week in Review

MONDAY, June 13th
Consumer and wholesale inflation data this week is expected to reflect The May oil price decline while May housing starts and building permits should bounce back modestly. The current soft patch in the recovery is likely to show up in weak retail sales for May and slower manufacturing activity. Because consumer spending is a large component of the economy, we could continue to see downward pressure on rates.

TUESDAY, June 14th
Retail sales fell 0.2% in May led by a 2.9% plunge in vehicle sales. Excluding vehicles, retail sales rose just 0.3% on the month, the slowest pace since July. Spending was generally weak across most components with the exception of sales for gasoline and building materials. Slower spending correlates strongly with weak job growth last month and the lull in the economic recovery. As job growth and the economy improve we will see a pickup in consumer spending once again.

The producer price index rose 0.2% in May as food prices fell 1.4% and energy prices climbed 1.5%. Excluding food and energy prices, the core PPI rose 0.2% on the month and is now 2.1% higher over the last year. Wholesale inflation is modestly higher in the last six months as higher commodity and energy costs are seeping through to final prices.

WEDNESDAY, June 15th
The MBA mortgage applications index rose 13% to 584.6% for the week ending June 10. The purchase index was up 4.5% on the week as the refinance index gained 16.5%. Rates moved lower with the contract rate on the 30-year fixed down 3 basis points to 4.51%. Lower rates are supporting mortgage application activity but overall the number of applications remains relatively low.

The consumer price index rose 0.2% in May, decelerating from larger energy driven gains in the past few months. Energy prices were down 1.0% in May; excluding food and energy prices from the index led to a 0.3% gain in the core CPI. Core consumer prices are up 1.5% over the past year which is well within the Fed’s target for inflation so no monetary policy changes are imminent.

The NAHB housing market index plunged to a level of 13 in June from a reading of 16 in May. This is among the lowest levels builder sentiment on record. All three components of the index, present single family home sales, sales six months from now and foot traffic through model homes deteriorated from already weak levels. Homebuilders are clearly concerned about the housing market given the recent slowing in the economy. The inventory overhang in existing home sales will need to be cleared and home prices need to stabilize before builders’ confidence in the housing market will return.

THURSDAY, June 16th
Housing starts rose 3.5% in May to an annual rate of 560k. While the bounce back in May starts was welcomed however, the overall level new construction remains weak as ever. Housing starts are now 3.4% below their year ago level. Single family housing starts were up 3.7% last month to an annual pace of 419k while multifamily housing starts gained 2.9% to a rate of 141k. Housing permit issuance which is used as a proxy for future building activity jumped 8.7% in May to an annual rate of 612k, boding well for moderate gains in new construction starts in coming months.

Jobless claims fell 16k to 414k for the week ending June 11. This is the tenth straight week claims have been above the 400k mark suggesting that recent improvement in the labor market has subsided for now.

FRIDAY, June 17th
The index of leading economic indicators jumped 0.8% in May after falling by 0.4% in April. Even with the gain last month the index continues to trend slightly lower suggesting continued expansion in economic conditions over the next six to nine month but probably at a slower pace than seen earlier this year.

So, another week, and another set of dismal numbers.  We are now 1 week removed from the start of summer and there is really nothing that I can say here that is overwhelmingly positive.  The question always begs - who can pick the bottom?  Are we there?  Do we have some more bad news coming?  Or, are we going to dust ourselves off and start climbing again?  I wish I had the answer to this!!!  At present, I can only say that is does not look good, but I do remain optomistic that steps will be made that lead to new job creation in the near future.  If they can accomplish that, the remaining numbers should take care of themselves.

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Sean Patrick Reilly

Cherry Creek Properties

303.520.8700