Denver’s housing market strong
Yesterday I received a telephone call from John Rebchook, the real estate journalist for the Rocky Mountain News. 
John shared with me some very good news contained in a report by PMI. You can read the whole news here; PMI Study: Denver’s Housing Market strong
Hearing the contents of the U.S. Market Risk Index is music to my ears. Finally an outside source who has a vested interest in providing good data is handing us a positive report! Denver continues to out-perform other Metro areas. As far as real estate is concerned we have a future and it is good.
Really.
There is not a day that goes by where I’m not talking and/or working with people who are relocating to the Denver area. So many are in a holding pattern until their homes sell in other areas.
No doubt our market isn’t going to light on fire anytime soon, but there are homes selling. In fact as in my example in the paper, we are finding more and more buyers are competing for the good homes.
Properties that are priced right and nicely cared for sell quickly. In fact I showed one last week to a client who couldn’t (actually wouldn’t) write an offer until his wife could see it. She can’t get here until this week. Well, you guessed it, the property is already under-contract. Congratulations to that seller, they did very well. I’ll just have to go find the Mrs. another home this week.
Yes, the Denver real estate market is selling. Prices may be down in some areas, but in others they aren’t judging the entire market by the overall stats is a HUGE mistake. Buyers and sellers have to look at the micro market in the area they plan to buy or sell. Assuming that statistics are a "one size fits all" rule, is harmful.
Call a pro, let your pro show you the facts, the whole facts. Then make your decision.
Denver-area homes prices fall 3.1% in Nov.
The Rocky Mountain News Reported today on home prices:
Home prices in the Denver area fell by 3.1 percent in November compared with November 2006, ranking it No. 7 out of 20 top markets in the country, according to a national report released Tuesday.
The S&P/Case-Shiller Home Price Indices showed the average one-year change in November for all 20 markets was a 7.7 percent loss, more than twice the Denver-area drop.
From October to November, the Denver- area market fell by 2 percent, compared with a 2.1 percent overall drop in the year-ago period. And from September to October, Denver-area prices fell by 1.7 percent, slightly worse than the 1.4 percent for the 20 cities.
Larry McGee, president of the Berkshire Group, said he found the year-over-year report encouraging and consistent with earlier local reports.
While Metrolist data for the entire year showed about a 2 percent drop in prices from 2006 for the Denver area, the S&P/Case Shiller analysis uses a different methodology.
McGee said most experts agree that “because Denver did not have the big run-up in prices, there is no reason to think we are going to have a big ‘run-down,’ ” like other formerly hot markets across the country.
McGee predicted that “sales are going to be OK this year but not fabulous. And that is not all bad.”
The overall national home market is not pretty.
“We reached another grim milestone in the housing market in November,” said Robert J. Shiller, chief economist at MacroMarkets LLC.
“Not only did the 10-city composite post another record low in its annual growth rate, but 13 of the 20 metro areas, each with data back to 1991, did the same. Eight of these (metro areas), in addition to the two composites, have had more than 12 consecutive months of falling prices. Fourteen of the 20 (areas), in addition to the two composites, recorded their single largest monthly decline on record in November.”
rebchookj@RockyMountainNews.com or 303-954-5207
The Berkshire Group compiled statistics in graph format. Looking at the actual numbers demonstrates the Denver real estate market isn’t in as bad a shape as one might expect!
A few points to ponder:
The Metro Denver resale housing market was better in 2006 and 2007 than perceived.
- The graphs demonstrate the available resale housing inventory, homes sold, and the absorption rate in the Metro Denver real estate market for 2005, 2006, and 2007.
- The absorption rate is the number of weeks it will take to sell the available inventory at the current rate of sales, with no additional inventory coming to the market.
- The absorption rate improves as the sales increase in the warm months from March to October.
- The market for 2006 and 2007 were very similar with regard to sales, while available inventory was less in 2007 than 2006.
- As home builder inventory decreases, the existing inventory sales will incre4ase and Resale inventory will continue to decrease.
- The number of foreclosed properties did not have a noticeable effect on available inventory, total sales, or the absorption rate in 2006 and 2007.
The graphs were developed from information suppplied by Metrolist, Inc, the Metro Denver MLS provider.
What happened in Vegas…got recorded. Oh my!
2007 may go down as the year NAR recognizes the Blogger! In Las Vegas last week, blogging was talked about and bloggers were present. It is becoming abundantly clear, blogging is a way to connect with consumers. If Realtors aren’t blogging they should be.
Dan Green put together a short video starring a group of bloggers (me too!).
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The stars of the show are:
Thanks for including me Dan, it was fun!
Denver real estate in the news
The headline reads, "Home sales afloat - but flat. An economist says Colorado is faring better than much of the U.S., where prices rose up to 102% over the past five years."
True our market is not blazing hot like many people expect, but we are selling houses, more houses than the year before.
Some neighborhoods are doing far better in sales than others. What I see are the areas that have the outstanding schools and a reputation for being a good investment are selling within 99% of the list price.
We have many homes on the market, the competition for sellers is tough. The sellers that do well are the ones that take the time to present their home well, price it to sell and make the home available for showings as needed.
These homeowner can expect to sell much quicker than those sellers still speculating for a higher price and not bothering to properly present their homes.
Google yourself…
Sometime ago I wrote an article on Active Rain, a real estate blogsite about the importance of protecting your good name. Most will agree, our reputation is very important. These days it is so easy for someone to go on the internet and damage a reputation.
Glenn Roberts Jr. of Inman News picked up the blog and discussed it in Part 3: Web trends: Who’s keeping track? (I’d link to the article, but it is a subscription based site).
Roberts discussed how another real estate blogger, Don Fabrizio-Garcia with Prudential Connecticut Realty in Danbury, CT was wrongfully accused of making a comment. Don went through a week of pain before the comment was removed.
Don’s example is one we should all heed. Setting up a RSS feed to track when your name, your company’s name is mentioned on the Internet is a wise thing to do. It is easily done, and Google offers a service that is free. So there is no excuse not to do it!
Anyone who’s going to be in touch with consumers needs to know what is being said about them. Whether it’s in the real estate business or another industry.
Rich Jacobson who writes part of the Soundbite Blog and is with Windermere Real Estate/West Sound Inc. in Silverdale, Washington feels it is important to monitor web content. Doing so can uncover things said about you, but also plagiarism.
Thanks to Glenn Roberts and Inman for making us famous for 15 minutes. I hope you will follow through with the links and set up an RSS feed to protect yourself.
Do it now.
CNN Does Denver
A few weeks ago CNN contacted Larry McGee, our broker at The Berkshire Group about doing a story on Denver real estate. They flew two gentleman out and spent 3 hours interviewing Larry and Angela Fox, on of my associates. During the course of the morning they filmed two of our listings. One property located in Greenwood Village was listed and sold in less than 1/2 a day! (this didn’t get mentioned on the video).
In the end, we were amazed at how much time and effort went into making a clip of not very much content. Oh well, judge for yourself…
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Larry McGee Quoted in Denver Post
Real Estate in the year 2007 has gotten off to an unusual start. Denver residents who seldom see snow unless they drive to the mountains, got more than their fair share in December, January and February.
Margaret Jackson, Staff Writer of the Denver Post did a story on the real estate market, interviewing The Berkshire Group Realtors’ Managing Broker, Larry McGee.
Larry was quoting not only the affect of the weather, but also about homeowners, here’s what was said,
Another factor contributing to the declining market is the number of people taking the equity out of their homes to pay for vacations or expensive toys, said Larry McGee of The Berkshire Group.
"If you use your house like an ATM it may be hard to sell it," McGee said. "Unless prices go up, you’re in trouble. It’s irresponsibility of the public."
Bauer and McGee agree that cold, snowy weather in the first part of February contributed to the drop in sales.
"When you’ve got 60 days of snow on the ground and repetitive snowstorms, it dampens people’s desire to go look at houses," McGee said.
The Bauer quoted is Gary Bauer. To read the entire article (you may have to pay a fee) follow this link, "Home Sales slide in February"
NY Times
The New York Times had a real estate technology section today (Sunday). I was featured in an article entitled, "Forget Gimmicks: Buyers Want Numbers." The author Rebecca Fairley Raney found my website www.kristalsellsdenver.com when she was researching the article. Impressed with the information and maps provided, she called to talk to me. It was fun discussing my "baby" who turns ten years old this year!
I built the site in 1997 at a time when there weren’t too many real estate websites around. My attitude then as it is now, is to provide the consumer with as much information as possible. I enjoy helping my buyers find the right home in a neighborhood that fits their lifestyle. Providing information is the first step in a successful house hunting expedition.
My philosophy is atypical to traditional sales methods. My business is not "sales" but information. When a transferee needs to know where to start looking for a home, they want help, not hindrance. Coming to a brand new area means learning so much at once. Helping people sift through what is important and not is part of the relocation process.
Providing the right information means the difference between being able to make a decision with confidence or wasting time trying to figure the city out on your own.
Here’s to ten years of helping people make INFORMED decisions.
Rain City Guide Interview
Tonight has been an exciting night for me…The Rain City Guide Blog has posted an interview with me on their very popular Seattle based blog. Mosey on over and check it out.
Rain City Guide is a unique blog with a variety of contributors. Each blogger has their own edgy persona and style. I’ve been watching them via my RSS feeder for a long time now. Check out there blog hosted by Dustin Luther.
kk
Record area home prices overstated, agents say.
Source: Rocky Mountain News by John Rebchook
The average and median prices of previously owned homes sold in the Denver area inched to record highs this month, but a number of agents increasingly believe the prices are inflated because of concessions being offered by sellers and demanded by buyers.
For example, if someone sells a house for $106,000 but gives the buyer $6,000 for the down payment, the sale in the MetroList records would be listed at the gross amount of $106,000, not the net amount of $100,000.
Among other records, the median, or middle price, of a home sold rose to $255,000 this month, eclipsing the $252,250 median price in July.
Independent broker Gary Bauer and Steve McGuire of RE/MAX Professionals, along with Coldwell Banker Colorado, released separate reports on Tuesday that track home sales. They adjust the data for the number of weeks in each month. Sales for the remaining days in August will become part of September’s reports, but data will be adjusted so each month is comparable.
Although there is no way of telling how much home prices are being inflated, Bauer said the concessions must be skewing the numbers to some degree.
Buyers are extremely picky and feel no urgency to purchase a home because of the huge supply of unsold houses on the market and still relatively low mortgage rates, Bauer said.
The MetroList data are overstating the overall sale prices by about 1 percent, McGuire estimated. He said only about 10 percent to 15 percent of the homes he sells use concessions, but he said he knows that percentage is much higher for other brokers.
Frank Hernandez of Metro Brokers-Harvest Realty in Thornton said 80 percent to 85 percent of the homes he sells are with incentives. Typically, the incentives amount to 3 percent of the sales price, he said.
Many brokers, lenders and economists say that 100 percent financed deals are causing the number of foreclosures to rise.
That creates a vicious cycle in which market-rate sellers must lower the price of their homes to compete with the foreclosed homes on the market, Hernandez said.
"I think the market is getting worse," said Brian Bartlett with RE/MAX Southeast. "You’ve got all of this goofy financing going on."
He said he recently sold a home in Green Valley Ranch and that 40 similar homes were competing with his seller. The seller paid the down payment and closing costs, and the buyer received $300 at the closing.
The MetroList sale prices must be inflated, said Larry McGee of the Berkshire Group, but he said he has no idea by how much.
"If you pick any number, you’re just shooting from the hip," he said.
Some Realtors aren’t even listing the concessions with MetroList, he said, which makes it even tougher to arrive at an accurate number.
"What MetroList is best for is establishing a trend line of which way the market is heading," rather than a precise accounting of individual housing prices, McGee said. "If you’re an individual seller, what do you care what the average or median price is doing marketwide? You care whether you sold your house for a profit."
Rising gasoline prices and interest rates also could hurt the housing market, said Rob Horton of Metro Brokers Absolute Realty Services. But neighborhoods close to where people work can benefit, Horton said, because more people are telling him they want shorter commutes because of rising gas prices.
Even a person at MetroList, a Realtor-owned group that releases home sales statistics on the last full week of each month, said the allegations may be worth investigating. The woman, who asked not to be identified, said Realtors are required to fill out a sales concession field when recording the sale in the MetroList computer database. But the concessions are not subtracted when calculating the overall sales price, she said.
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