- For the second month in a row, Denver area home sales topped a Billion Dollars, totaling $1,035,703,110, ending just $53 million behind June. The single family average sale price of $298, 654 may already be having some effect on the foreclosure rate, as some homeowners are enjoying the benefits of at least a bit of positive equity.
- While no one is ready to say we have turned a corner and the market is ready to take off, the July sales numbers are probably the basis for the “new normal”, the baseline benchmark for the era of the “uninfluenced market”. July 2011 showed a stronger market than the same month in 2010, and, as you will recall, July 2010 was the first month of post “stimulus” sales, and marked the beginning of a market slide that lasted until May of this year. To say the Denver area market has improved slightly is true, to say this improvement is tenuous is very true.
- To say that 2 months of Denver area real estate closings in excess of a Billion Dollars is making the local real estate industry feel a bit better is an understatement. Consider the amount of real estate commissions, escrow fees, loan origination fees, insurance premiums, HOA reports, etc. that were created with level of sales, and that income landing in the local economy. Not yet a boom. But at least a breath of fresh air.
- Is the improvement sustainable? The big enemies of a robust housing market (or a robust economy) are unemployment and strangling regulation. Interest rates play a part, but we sold many homes in the 1990’s with interest rates in the 7% to 8% range. People will buy if there is income, and a certain assurance that the income will continue. The S & P’s slap in our governments collective face by lowering the credit rating of the United States to AA+ will not greatly affect housing if (BIG IF), our political leaders face up to the fact and admit that there is not enough money to pay for all of the things they have promised us. If they do not, then expect another rating drop, and THEN we will start to see serious issues in housing and everything else.
- Residential resale inventory is 25% less than the same time in 2010. That fact is reflected in the absorption rate of less than 5 months, which means some sub-markets are tipping into sellers markets. Pay particular attention to the Quadrant Band Charts.
A very smart and wise person once told me “The Market is the Market, is the Market”. That means there is ALWAYS a market, and your ability to do well is dependent on your ability to understand the current market, and put forth the effort to benefit from the market.
PS. Looking at building permits, there is a sharp upturn in multifamily permits. That, and a silly low vacancy rate, may provide a market clue.