Wednesday, December 16, 2009

MICHAEL KOZLOWSKI -TEAM KOZ EARNS PRESTIGIOUS DESIGNATION TO HELP HOMEOWNERS IN DANGER OF FORECLOSURE

FOR RELEASE: IMMEDIATE
DATE: 12/16/2009

MICHAEL KOZLOWSKI -TEAM KOZ EARNS PRESTIGIOUS DESIGNATION TO HELP HOMEOWNERS IN DANGER OF FORECLOSURE

Michael Kozlowski – Team Koz of RE/MAX Professionals has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when the area is ravaged by “distressed” homes in the foreclosure process.

Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.

In the Denver Metro area, thousands of homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.

“This CDPE designation has been invaluable as I work with sellers and lenders on complicated short sales,” said Kozlowski. “It is so rewarding to be able to help sellers save their homes from foreclosure.”

Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as Michael Kozlowski with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys the credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.

The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.

“Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.

For more information please contact Michael Kozlowski and Team Koz at RE/MAX Professionals. www.team-koz.com 303-949-2755

Saturday, December 5, 2009

Denver Real Estate Market Update December 2009

So, How’s the Market, December, 2009
All data taken from Metrolist, Inc, on December 5, 2009. Denver, Colorado.

November sold data outperformed, 2008, 2007 and 2006 in number of single family and condo units closed for the month. This is the first time in four years we have seen a Month outperform several years prior for the same period. The $8000 Tax Credit, low interest rates and increased consumer confidence because of low housing prices fueled this years November closings. The November sold data showed 3289 closed units and in 2008 it was 3056 units closed or 233 more units closed this year for a 7.08% increase over last November.

We have had a seasonal slow down from October to November with closings slipping from 3708 units in single family and condo homes in October to 3289 units in November or an 11.3% reduction in closings from October 2009 to November 2009. Normally a reduction of 10% occurs between October and November, so watching this trend of increased sales year over year and normal seasonal downward sales can help us predict the 2010 real estate year in Denver.

Here’s the sold data for November of the previous 5 years.



• December Active Listing Inventory is at 14259 for single family home’s is down from 17176 from one year ago.
• The number of Active listings for Condominiums in December is 4620 and last December there were 5095 units available.
• The current 18879 active single family and condominiums is the lowest December inventory in more than 5 years.



Listing inventory continues to decline as you can see over the last five years. A little abnormality occurred in December of 2009 for homes priced from zero to $250,000. Normally we would see a decrease in inventory, but this price range actually went up from November 2009 to December 2009 from 4963 Single Family units to 5080 single family units. We want to watch this over the next several months to determine if a market shift is occurring in the lower price ranges. 2009 has experienced the largest price increase on average in the lower price ranges and the extension of the $8000 first time home buyer Tax Credit and the addition of the $6500 Tax Credit for existing home owners should continue to cause the lower price ranges to appreciate, but watching the inventory in the upcoming months will tell us more about where we are going.

• There are fewer properties to compete with today and serious buyers are buying now, as the Tax Credit has been extended and expanded to include current homeowners.
• Interest rates are 4.875% for conforming loans today and more than likely will be a little higher in 2010 causing buyers to make a buying decision now versus next year.
• We anticipate a slight rise in interest rates in the first half of 2010.
• We are seeing investors creating loans have more competitive jumbo rates in small doses. Watch as these are in and out of the market quickly.

Under Contract data is still outperforming pervious years for December 2009.

• The number of properties under contract is at 5694 single family and condo units.
• The number of properties under contract today is 298 units higher than 12 months ago.
• Job stability in Denver will allow more buyers after the first of the year to take advantage of the Tax Credits being offered.
• The number of properties under contract in December of 2009 is the highest recorded December in 4 years.



What should sellers do in this market?

• Today’s real estate market for sellers is a choice of your home being a beauty contest or a fire sale. You must be the best looking home or the lowest priced property to attract today’s buyer pool
• Although inventories are decreasing, know your specific price range, as each price range affords a different amount of buyers buying today.
• Consider an Owner Will Carry scenario for upper end price homes with equity. This is a creative tool for those sellers who have the ability to carry the paper for the buyer buying their property and get a return on investment.
• Offer a holiday special price reduction, like “10% off the Price for Christmas to New Years Week”.

What should buyers do in this market?

• With the extended $8000 dollar Tax Credit for First Time Buyers and the NEW $6500 Tax Credit for existing homeowners who will buy a primary residence, get into the system of being prequalified now as there will be an increase in the buyer pool causing competition for homes in January and February.
• Have you considered using your Retirement Account IRA to purchase an investment property in 2010? You can do that with a good upside for returns compared to other investment vehicles.
• Become a prequalified buyer before looking. The guidelines for lending changes daily and you want to be approved before moving forward.

Sunday, November 8, 2009

Denver Real Estate Market Update November 2009

So, How’s the Market, November 2009
All data taken from Metrolist, Inc, on November 6, 2009. Denver, Colorado.

October was the first month to outperform the previous years sold data in 5 YEARS! In October 2009 there were 3708 closed units for single family and condos. Twelve months ago October had 3341 units closed and two years ago in October the number of closing was 3398. We have to go back to 2005 to see an October with more closed transactions. In fact, the increase year over year was a whopping 10.98% increase over last October. There are a couple very good reasons for this positive change. 1. Last October the financial world was in major disarray and 2. The First Time Home Buyers Tax Credit worked in 2008. The chart below will show you the sold data for October of each year.



• November Active Listing Inventory is currently at 15,076 units for single family homes and is down from 18,331 from one year ago.
• The number of Active listings for Condominiums in November is 4,685 compared to last November there were 5,366 units available.
• The current 19,761 active single family and condominiums is the lowest November inventory in more than 5 years.
• The number of sold properties from Sept to October 2009 increased by 4.01%. A normal September vs. October sold data would see approximately 3% reductions.



Listing inventory continues to decline as you can see over the last four years, which helps create opportunities for those on the market. Many predict an increase in single family homes to come on the market in 2010 which will increase competition. Normally, a seasonal increase will occur in March of each year and grow through the spring. Homeowners who are considering selling now should consider these factors:

• There are fewer properties to compete with today and serious buyers are buying now. The Tax Credit has been extended and expanded to include current homeowners, which will create several new waves of buyers throughout the winter months and into the spring when the tax credits end.
• The fourth quarter brings relocation buyers into town, which can create more opportunity for those on the market.
• Interest rates are currently 4.875% for conforming loans today and more than likely will be a little higher in 2010 causing buyers to make a buying decision now versus next year.

Under Contract data is still outperforming previous years for November 2009.

• The number of properties under contract is currently at 6,925 single family and condo units.
• The number of properties under contract today is 1,131 units higher than 12 months ago. Buyers have taken advantage of the $8,000 first time home buyer credit being offered as an incentive and will continue to do so through winter and into spring. The new wave of buyer’s looking to trade up and take advantage of the $6,500 tax credit should create a domino effect in most price ranges.
• The number of properties under contract in November of 2009 is the highest recorded November in 5 years.
• This increase also shows it is taking longer for homes to close due to the advent of short sales, pre-foreclosure transactions, loan modifications and foreclosed properties dealing with absentee owners.


What should sellers do in this market?

• Know the supply and demand numbers for your price range and area. If you have 3 months supply or 3 years supply in your area, that supply vs. demand should make a significant difference in how you price and market the home.
• Your home must be the best conditioned home on the market. Make it sparkle. Buyers are looking for the perfect house.
• Consider an Owner Will Carry scenario for upper end price homes with equity. This is a creative tool for those sellers who have the ability to carry the paper for the buyer buying their property and get a return on investment. Not for all sellers to use, but a tool to get you top dollar in today’s market, if you have the ability.
• Offer a holiday special price reduction if you need to sell quickly. Specials like “10% off the Price for Thanksgiving Weekend” can create some buzz. Many extended family members encourage the purchase of a new home and sometimes help with the down payment for first time buyers.

What should buyers do in this market?

• With the extended $8,000 dollar Tax Credit for First Time Buyers and the NEW $6,500 Tax Credit for existing homeowners who will buy a primary residence, get into the mode of buying now as there will be an increase in the buyer pool causing competition for homes.
• Consider a Multi Generational Model for buying a larger home, meaning combine several generations in one family to buy jointly into the upper price range homes. The discounts on homes above a million are plentiful and combining net incomes and down payments could be a very efficient way to get a great deal on a home that you may not have considered in the past.
• Become prequalified buyer before looking. The guidelines for lending changes daily and you want to be approved before moving forward.

Thursday, October 8, 2009

Denver Real Estate Market Update October 2009

So, How’s the Market, October 2009
All data taken from Metrolist, Inc, on October 5, 2009. Denver, Colorado.

When was the last time Denver real estate had a sold month that outperformed a previous month in the last 4 years? Well it happened in September of 2009. September of 2007 had 3509 homes that closed that month. Many analysts suggest that 9-2007 was the 12th month of the housing downturn in the Denver market that started in mid 2006. September of 2009 had 3565 homes closed or 54 more than September of 2007. Future months will start to show this trend against 2008 sold data, so the turnaround is now happening to Denver real estate that is backed up by the numbers.


· October Active Listing Inventory is at 15,889 for single family homes.
· The number of Active listings for Condominiums in October is 4961.
· The current 20850 active single family and condominiums is the lowest October inventory in more than 5 years.
· The number of sold properties from Aug to Sept 2009 reduced by 1.4%. A normal September vs. August sold data would see 3-5% reductions.
· The current YTD sold figures are off 14.02% from the number of properties sold in 2008.
· October 2009 Active listing inventory is 34.3% lower today than in September of 2006.
· Average Days on the Market of Single Family homes is 94 days.
· Average Days on the Market for Condo’s are 98 days.
· The average sold price in Denver for single family homes is $273,972.
· The average sold price in Denver for condominiums is $167,090.
· The average list to sale price in Denver is 96.8% of current list price. This does not reflect price reductions that may have occurred before the new sale happened.


Listing inventory continues to decline as you can see over the last five years. Many predict an increase in single family homes to come on the market in 2010. Normally a seasonal increase will occur in March of 2010, however, we predict that the residential housing inventories for 2010 will be within 3% up or down of where 2009 inventories are for the following factors:

· People are still not secure in their job positions to make a move which will keep resale listing inventories lower
· Although an increase in foreclosed properties will enter the market in 2010 and 2011, these will be priced aggressively and be spread out over a longer period of time to maximize the REO lenders position.
· There has been insufficient equity increases to allow for normal resale of property to occur, hence fewer sellers not committing to sell in the short term.
· The buyer pool is smaller today keeping existing listings on the market longer, which tends to dissuade other sellers from becoming competitors.

Under Contract data is the surprising figure for October 2009.

· The number of properties under contract is at 7495 single family and condo units. That is a 2.4% increase over September 2009
· The number of properties under contract is 980 units higher than 12 months ago. Buyers have taken advantage of the $8000 first time home buyer credit being offered as an incentive.
· The number of properties under contract in October of 2009 is the highest recorded October in 5 years.
· This increase also shows it is taking longer for homes to close due to the advent or short sales, pre-foreclosure transactions, loan modifications and foreclosed properties dealing with absentee owners.
· In addition, mortgage guidelines have elongated the contract process in both the appraisal system and the funding of a new loan system. Both have new guidelines in the last 90 days making it harder for the process to move quickly.


What should sellers do in this market?

· Is your home an extraordinary home in a terrific price position? If not, revisit your market position and goals as buyers are scrutinizing every home to determine if this is a great deal for them to buy.
· If you, as a seller, were a buyer, what would you pay for your home today? Price does matter to buyers be honest with yourself.
· Consider the “Guarantee of a Buy Back”. This is a creative tool for those sellers who have the ability to guarantee a sale to the buyer buying their property and get a return on investment. Not for all sellers to use, but a tool to get you top dollar in today’s market, if you have the ability.
· Videos are the new rage of marketing homes. Consider this as a marketing option.
· Use a professional stager or a seasoned agent to make your home sparkle. Buyers want move in condition properties.

What should buyers do in this market?

· Understand the Pricing Model before making an offer. The model includes three components, price, terms and time. Which one is the most important to you to close the transaction?
· Have a game plan for how long you want to be in the home you are buying. Knowing the goals makes it easier to buy a home and get a great deal if you are convicted in your plan.
· Include environmental inspections of Radon, CO2, Lead Based Paint, and Electro Magnetic Field inspections where appropriate.

Stay Positive!

Wednesday, September 9, 2009

Denver Real Estate Market Update September 2009

So, How’s the Market, September 2009
All data taken from Metrolist, Inc, on September 7, 2009. Denver, Colorado.

September data for properties under contract are showing a 3% increase from August. There are currently 7322 single family and condominiums that are under contract as of this writing. For September, this is the highest under contract stat in 5 years. What this means is that it is taking longer to close a transaction and that buyers are becoming more comfortable in their decisions to make a home purchase. The $8000 First Time Home Buyer Tax credit has contributed to this level of confidence during the last 60 days, as this credit ends on November 30, 2009. Buyers will need to contract no later than approximately October 31, 2009 to really take advantage of this housing perk.


· September 2009 active listing inventory for Single Family and Condo’s decreased 2.2% from August to September. Two of the last 4 Septembers had increased inventory month over month.
· The current 21229 active single family and condominiums is the lowest September inventory in more than 5 years.
· August sold data of 3616 units is the lowest August in more than 5 years.
· The current YTD sold data for 2009 is 29.4% below 2005, which was the peak of sales performance in Denver.
· Year over Year the sold data is off 15%. This figure will start to change to a positive number as the 4th quarter approaches and into 2010. We have seen the bottom of the sold data figures and October 2009 should reflect a rise as a result of the number of under contract properties currently listed if they close on a normal basis.
· The Denver Metro area is poised to close over 35,418 single family and condo properties for the year 2009 based upon August sales figures.
· Single Family Homes priced from 0-$250,000 have a 3.569 month supply of homes as of September 7, 2009
· Single Family Homes priced from $250,000 to $500,000 have an 8.185 month supply as of September 7, 2009. This price range is starting to shrink slowly.
· Single Family Homes priced from $500,000 to $750,000 have a 19.127 month supply of inventory as of September 7, 2009.
· Single Family Home priced from $750,000 to $1 million have a 30.77 month supply of inventory.
· Single Family Homes priced above $1 million have a 58.269 month supply of inventory as of September 7, 2009.
· Condominiums below $250,000 have a monthly supply of 6.07 months.
· Condos above $250K to $500 have a supply of over 19.064 month of inventory.
· A six month supply of inventory typically creates equilibrium between buyers wanting to buyer and sellers wanting to sell in home sales in the Denver market.

The data continues to show an improving but fragile real estate market in Denver. Job insecurity is holding back a rush of buyers into the marketplace. As the inventory continues to decrease and job stability improves, Denver is poised for real estate to improve in value. We are seeing this happen below $250,000 and the next price point of $250,000 to $500,000 is starting to experience a decrease in inventory. It normally takes 6 months to see each.$250,000 of price catch up to the market.

The telling sign of the marketplace is the buyer that can buy an upper end property. They are able to secure a lot of home at an attractive price. Although each area is a little different in what a buyer can buy a million dollar property for, discounts of 25-30% are not abnormal. Although upper end price inventories are decreasing, there are still plenty of great buys above $750,000. Take a look at the listing inventory vs. the number of sold properties projected for 2009 above $500,000 for the Denver metro area.


What should sellers do in this market?

· Price per square foot is a number buyers use to determine value. Although this may be a flawed number, make sure you know what your price per square foot is compared to your competition.
· Why should a buyer buy your home in today’s marketplace? Know the why to create the proper position for your home.
· Be the best conditioned home on the market. The competition is weak against condition, so to differentiate your home, be the best looking.
· Showings increased in August over July. If your home is not getting enough showings, ask your RE/MAX Professionals broker to help you better position your home where the buyers are showing.
· Stage your home or make your home shine on the inside for successful positioning.
· Add an incentive to your package, like prepaying HOA dues for a period of time to attract the buyers.
· Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

· Become a “cash buyer” meaning have your loan in place to get the best prices.
· Price should be secondary to the terms a buyer can get. Know your options on price and terms and you will be better leveraged and have a more financially secure loan when buying a home.
· Eliminate lots of inclusions into your loan, as lending practices have changed and this could delay your process.
· Ask for a Home Warranty Plan as part of your offer.
· Get a copy of your appraisal before your loan conditions deadline.
· Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors.

Sunday, August 9, 2009

Denver Real Estate Market Update August 2009

So, How’s the Market, Aug 2009

All data taken from Metrolist, Inc, on August 7, 2009. Denver, Colorado.

July sales increased 2.89% over June of 2009, great news! Normally, sales for July are lower than sales for June.


· July 2009 Sold Properties for Single Family and Condo’s Increased 2.89% from June.
· This is a consistent sign that confidence in the real estate is increasing.
· July 2009 sold data of 4091 is 7.71.% lower than July 2008
· July 2006 data shows 4601 single family and condos closed which is 11.08% higher than July of 2009. The current sold data is moving closer to previous years data, which is a sign of positive growth.
· Once a year over year stat for a specific month outperforms that previous year and the trend continues for 3 months, historically real estate markets are considered an increasing market. Look for this to occur over the next 6 months.
· The Denver Metro area is poised to close over 37,000 single family and condo properties for the year 2009.
· The percentage of single family and condo homes sold under $1,000,000 compared to above $1,000,000 is 99.09% of the homes sold YTD. This percentage of sold indicates less than 1% of all homes sold are over 1 million dollars. The market indicates when selling a million dollar property the pricing strategy needs to be the most competitive in the marketplace.
· Single Family homes and Condominiums priced from $500,000 to $1 Million are showing 1202 homes sold the first 7 months of 2009. This represents a 5.492% of home sales in the entire Denver marketplace.
· Single Family homes priced from zero to $250,000 now have a 3.53 month supply of inventory from July’s figures
· Single Family Homes priced from $250,000 to $500,000 now have an 8.48 month supply of inventory from July’s figures
· Single Family Homes priced from $500,000 to $1 million now have a 23.09 month supply of inventory from July’s data.
· Single Family Homes priced above $1 million now have a 57.04 month supply of inventory from July. This number has dropped by 6 months of supply from the June data.
· Condominiums below $250,000 have a monthly supply of 6.35 months.
· Condos above $250K have a supply of over 25.52 months.
· A six month supply of inventory typically creates equilibrium between buyers wanting to buyer and sellers wanting to sell in home sales in the Denver market.

Overall, the data indicates a slowly improving market. We are seeing consistent showings, contracts, and sold data for the first seven months of the year slowly increasing in Denver each month.

The number of homes under contract has remained constant with 7110 single family and condo homes under contract for August 2009. Compared to the previous four years, August, 2009 has a higher under contract number over 2 of the previous three years.


· There are several reasons for these yearly numbers to be fluctuating the way they do, but primarily, lending guidelines, short term economic conditions and job stability affect under contract numbers and looking back on August of 2006, 2007 and 2008, the U.S. had a unique set of circumstance affecting the August to October Under Contract numbers of each year. Make yourself aware of the past history to predict the future of real estate and do not over react to a single number as that is a snap shot of the moment, not a trend.

Inventories in Denver are still the news. Currently there are 21706 single family and condo homes active on the market on August 7, 2009.

· This is a decrease in inventory of 18.84% from 12 months ago.
· The inventory from July to August showed a zero increase. Normally August inventory would rise from July, but it has not in 2009.
· Since April of 2009 until today, the single family inventory has grown less than 1% over a 5 month period. This lack of increase in inventory is the market correcting in front of our eyes.
· There are only 16,000+ single family units for the entire marketplace and some of those are distressed to the point they are not really active listings for the normal buyer.

What should sellers do in this market?

· Know what your supply and demand is on your home. Buyers are using this to justify their offers.
· Make sure you have a compelling story about your property that will cause a buyer to buy?
· Be the best conditioned home on the market. The competition is weak against condition, so to differentiate your home, be the best looking.
· Talk about today’s buyer mentality with your REMAX Professionals broker to best understand the psyche of the buyer buying. They are out there buying homes; you just need to attract them.
· Have Property Brochures better than your competition in your home. This will allow the buyer to remember your home instead of the competition.
· Add an incentive to your package, like paying for closing costs, rate buy-downs, or prepaying HOA dues for a period of time to attract the buyers.
· Price, Terms, and Time are all factors in providing a package for buyers. Are you sending clear message what that package is about your home?
· Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

· With New Lending Guidelines that started August 1, 2009, each buyer needs to be better prepared by knowing the down payment and closing cost financial package they want. Delays in lending will occur if the buyer keeps making changes to their loan package.
· Price should be secondary to the terms a buyer can get. Know your options on price and terms and you will be better leveraged and have a more financially secure loan when buying a home.
· For those buyers who are owner occupied looking to build equity by fixing up a foreclosure property through a contractor, look to the FHA 203KS rehabilitation loan package as one to consider when needing repairs up to $35,000 of interior improvements.
· Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors.

Tuesday, July 7, 2009

Denver Real Estate Market Update July 2009

So, How’s the Market, July 2009

All data taken from Metrolist, Inc, on July 6, 2009. Denver, Colorado.

June 2009 had the Highest Increase in Sold Properties from May to June than any year in the last 5 years!

· June 2009 Sold Properties for Single Family and Condo’s Increased 15.01% from May to June.
· This is the single largest June increase over May in more than 5 years.
· In June 2005 the June over May increase was 14.24%, which represented the year with the most closings in Denver history.
· Although the June Sold data numbers are smaller than previous years, the increases are starting to catch up to earlier years totals and should surpass them later in 2009.
· The Denver Metro area is poised to close over 37,000 single family and condo properties for the year 2009.
· The percentage of single family homes sold under $500,000 compared to above $500K is 92.56% of the homes sold YTD. This percentage number is declining from the beginning of the year indicating some properties above $500,000 are starting to sell at a faster rate than earlier in 2009.
· Conversely, condo’s that are sold and closed below $500,000 make up 98.21% of all condo sales. This indicates the market is price sensitive above $500,000 for condominium units and the buyers are not buying this product at this time.
· Single Family homes priced from zero to $250,000 have a 3.44 month supply of inventory.
· Single Family Homes priced from $250,000 to $500,000 have an 8.5 month supply of inventory.
· Single Family Homes priced from $500,000 to $1 million have a 23.2 month supply of inventory
· Single Family Homes priced above $1 million have a 63.1 month supply of inventory.
· Condominiums below $250,000 have a monthly supply of 6.25 months. This indicates the buyers buying are looking to single family homes vs. condos within this price range. However, look for condo’s priced below $250,000 to be the next boom price range as buyers will not find what they are looking for in single family homes below $250,000.
· Condos above $250K have a supply of over 27 months.
· A six month supply of inventory typically creates equilibrium between buyers wanting to buyer and sellers wanting to sell in home sales in the Denver market.

What these numbers indicate for the first half of 2009 is that buyers are plentiful who are looking for single family homes priced below $500,000. Any properties outside of these price parameters need to position themselves aggressively now to take advantage of the peak selling time.

The number of homes under contract has remained constant with 7502 single family and condo homes under contract for July 2009.

· Denver is still experiencing a bit of a fragile marketplace as July under contracts decreased from June by 90 units. Not a big concern, but one to watch to make sure the pipeline of buyers remains in an upward growth.
· Four out of the last 5 years has seen July under contracts decrease from June. This is an abnormality each year and typically August will be higher than July.
· The percentage of under contract properties for single family is shifting a little higher each month, indicating the buyers’ willingness to buy properties above $500,000. We may be seeing the first uptick of homes selling faster that are priced above the conforming loan rates of $417,000.

Inventories in Denver are still the news. Currently there are 21709 single family and condo homes active on the market.

· This is a decrease in inventory of 19.1% from 12 months ago.
· July inventory increased 162 units over June of this year or a minimal .752% over June. Again an indication that the Denver marketplace is already on the upswing of improving year over year as we typically see inventory increases in July of upwards of 4% or more over June of each year.
· Since April of 2009 till today the single family inventory has grown only 1.1% over a 4 month period. This is the smallest increase of spring inventory in 10 years in the Denver area.
· There are only 16,000+ single family units for the entire marketplace.

What should sellers do in this market?

· Clearly Understand the Pricing Strategy Model of Price, Terms and Time.
· Know what the supply and demand is on your home.
· Position your home as the first one to look at in your neighborhood.
· Do not reject low offers without a counter; reposition your home in the buyers’ eye.
· Make your home look like a model for every showing.
· Add an incentive to your package, buyer closing costs, bonuses, rate buy-downs, prepaying HOA dues for a period of time, etc. to attract the buyers.
· Take your equity later rather than now with owner carry terms that will attract buyers in a difficult lending market for upper end properties if you have the ability.
· Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

· Know the Market you are buying within. If you are buying a more expensive home, the only competition may be you. This is where the significant deal making is occurring in Denver today.
· Get pre-approved for your loan. Make yourself look like a cash buyer with few contingencies to get the best deal.
· Terms are sometimes more important than a low price; have a pricing strategy to give you the best position.
· Lock in your rates as the market is volatile with rates moving around.
· Be prepared to be patient on certain available homes, as short sales, foreclosed properties or sellers with little or no equity have trouble getting buyers quick answers.
· Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors.

Here are the latest stats from RE/MAX Professionals, already starting to show the benefits our new merged company.

· In June 2009 the new combined company put 514 homes under contract and closed 614 transactions. The entire market closed 3976 homes, putting RE/MAX Professionals for the month of June at 7.7+% market share, a huge number for a single company.
· The company average closed price for June was $301,239. An increase of over $60K from the marketplace.

Sunday, June 7, 2009

Denver Real Estate Market Update June 2009

So, How’s the Market, June 2009

All data taken from Metrolist, Inc, on June 4, 2009. Denver, Colorado.

Reducing housing inventories in the Denver local single family and condominium homes hits a nine year low!


· Since January 2009 single family home inventory priced between 0 and $250,000 has dropped 13.47%.
· This is 777 fewer units available in the starter price range today vs. January of 2009, when typically the marketplace would experience an increase in inventory this time of year.
· There is a 3.24 month supply of homes under $250,000.
· Prices have risen approximately 3% since the first of the year in the zero to $250,000 price range in the Denver Metro area.
· Conversely, single family homes priced above $750,000 in the entire Denver Metro area have a total active of 2,618 homes.
· There is upward of a 4 year supply of upper end homes as of today in the entire marketplace, but remember some neighborhoods outperform others and sellers need to check their local inventory.
· Upper end priced homes have more ability to stay the course and this inventory will start to decrease at a fast rate over the next 12 months than what the marketplace is currently experiencing the previous 12 months in the upper end price ranges.

The number of homes under contract has increased 7.28% in one month. The total number of single family and condos under contract stands at 7,592 total units. This represents the highest number of homes under contract since July of 2008.

· 92.77% of all the properties under contract were listed below $500,000.
· It currently is taking longer to process the entire transaction and this under contract number should continue to grow to even higher number over the summer due to more buyers and longer transaction periods.
· Homes going under contract are the leading indicator of the market.
· With the current totals of homes under contract, sold and closed properties will have an increase later in 2009 and into 2010.

Homes that have sold and closed for May of 2009 recorded an 11.8% increase over April of 2009. This represents a below average seasonal trend. In 2008 the increase of the number of closings from April to May was 17.8%, in 2007 it was 15.1% in 2006 it was 18.42%. Sold data is always a lagging indicator of the market and the Denver marketplace will experience a more aggressive percentage increase in the 3rd and 4th quarter of 2009 vs. 2008.

· Number of Sold Properties in May of 2009 was 22.01% lower than May of 2008.
· However, there has been a 71.39% increase in sold properties since January of 2009. This is substantially above average from past years because the number of sold properties started at a lower level. Good news though because every market place that rebounded in the past 30 years started with large increases in sold data of a six month period in the 70% range.
· This should not discount the fact that the Denver marketplace is taking hold and improving even though the number of sales is off from previous years.
· 94.08% of all properties sold in the first 5 months have been below $500,000 in our marketplace.
· Properties above $1.5 Million have had a total of 38 totals sales in the entire Denver market for both single family and condominiums in the first 5 months of 2009.
· On the starter price ranges there has been 9421 homes and condos sold in the first 5 months of the year.

What should sellers do in this market?

· Clearly Understand the Pricing Strategy Model and Be Priced Strategically.
· Know that sellers need to position their home with the understanding of the HVCC appraisal process.
· Buyers want compelling deals on homes; understand how to give them a deal without losing all your equity.
· Do not reject low offers without a counter; reposition your home in the buyers’ eye.
· Unattractive offers are not a personal attack; if you were buying you would make your wish list too.
· Make your home sparkle for every showing.
· Try making reverse offers to buyers who are on the fence.

Saturday, May 9, 2009

Prestige Real Estate Group Market Update May 2009

Prestige Real Estate Market Update “So, How’s the Market, May 2009” All data taken from Metrolist, Inc. on May 5, 2009.

• Current active inventory is at a 6 year low with single family and condo active units totaling 21454 down from 22537 one month ago and a 21.26% reduction from May of 2008. This is also the first time in a decade that May inventory was lower than April inventory for any given year.
• Homes under contract are up 9.28% over April of 2009.
• The number of homes closed in April of 2009 was 3.48% increase over March of 2009.
• In 2009, 69.02% of all the homes sold in Denver have been priced from zero to $250,000.
• Home priced between $250,000 and $500,000 made up 25.13% of the homes sold in Denver.
• Conversely homes priced above $500,000 in the entire Denver metro area accounted for 5.85% of home sales in 2009.
• The market is seeing multiple offers in the lower price ranges indicating price appreciation is occurring now at the entry level prices which will translate to more sales in the spring and summer.
• $8000 Tax Credit for First Time Homebuyers will give a jump start to homes priced under $400,000.

This chart shows the number of homes that are on the market in the month of May for each year. Denver is experiencing a declining inventory market, especially in the starter price ranges. This means multiple offers and appreciation on starter homes.

When a seller can sell they move up. It takes about 6 months for every $250,000 in price increase to start to sell faster. Currently there is a 3.62 month supply of homes below $250,000 causing buyer to move faster on making offers and increasing prices.Inventory still drives real estate; look at the decrease from April to May of this year. First time in 10 years inventory has decreased from April to May.

Why should buyers buy in today’s real estate market?
• Become a pre-approved buyer. With lending guidelines changing daily, being approved will allow you to look like cash to sellers which helps you make a deal.
• Plenty of inventory in upper price ranges. This is where the largest discounts in prices are occurring.
• Real estate is a finite product that will rebound in value. Buy now and take advantage of your buy low, sell high ability today.
• Lock in your low interest rates that are available today.
• Ask for terms from sellers to meet your financing needs.
• Ask for a Carbon Monoxide detector with your inspections at the seller’s expense to install before closing. Make sure you ask for the detectors that are wired with the other ones in the home.
• If you are a patient buyer, short sales and foreclosures will afford you the lowest prices to buy homes, but you must be knowledgeable of the short sales process to really take advantage of this opportunity.

Why should sellers sell in today’s real estate marketplace?
• If you own a home priced below $300,000, your chances are improving daily to sell for the highest possible price in 3 years.
• Selling now gives you the ability to buy a home at a discount.
• Do not over react to any offer. Buyers are like any other commodity. When there are fewer of them, you must be open-minded to them all. Doesn’t mean you have to accept their offers, just be open to looking at all and countering them all if necessary.
• Hire a Professional Stager to help your home be the best conditioned home in your area.
• Appraisal guidelines have changed May 1, 2009. Consider getting your home appraised to allow you to best position the home and offer the buyers a sensible way to make an offer.
• Compare your homes to proven entities not listed entities. This will create less stress in the sales process, as that is what buyers are looking at to make an offer.

Tuesday, April 7, 2009

Prestige Real Estate Group Market Update April 2009

Prestige Real Estate Market Update “So, How’s the Market, April 2009” All data taken from Metrolist, Inc. on April 6, 2009.

• Current active inventory is at a 6 year low with single family and condo active units totaling 21537 up from 20884 one month ago and a 19% reduction from April of 2008.
• Month over month the inventory only increased 653 total units from March. A small number for spring time home inventory growth.
• Homes under contract are up 9.63% over March of 2009.
• The number of homes closed in March of 2009 was 31.98% better than February of 2009. This is the largest increase in number of homes closed from February to March since 2004.
• In 2009, 69.95% of all the homes sold in Denver have been priced from zero to $250,000.
• Homes priced between $250,000 and $500,000 made up 24.1% of the homes sold in Denver.
• Conversely homes priced above $500,000 in the entire Denver metro area accounted for 5.94% of home sales in 2009.
• The market is seeing multiple offers in the lower price ranges indicating price appreciation is occurring now at the entry level prices which will translate to more sales in the spring and summer.
• $8000 Tax Credit for First Time Homebuyers will give a jump start to homes priced under $400,000.

This chart shows the number of homes closed in the month of March for each year. Although 2009 shows a decline, look at the chart below indicating the increase from February to March of each year to see a trend that exceeds previous years.

In 2009, the number of closing increased by 31.98% from February to March.
Inventory still drives real estate; let’s see how it has decreased in April of each year.

What can buyers do to take advantage of today’s real estate market.

• Become a pre-approved buyer. With lending guidelines changing daily, become approved and look like cash to sellers.
• Sellers in upper price ranges are looking for buyers, this is where the deals are.
• Real estate is a finite product that will rebound in value. Buy now and take advantage of your buy low, sell high ability today.
• Lock in your low interest rates that are available today.
• Ask for terms from sellers to meet your financing needs.
• Ask for a Carbon Monoxide detector with your inspections at the seller’s expense to install before closing. Make sure you ask for the detectors that are wired with the other ones in the home.
• If you are a patient buyer, short sales and foreclosures will afford you the lowest prices to buy homes, but you must be knowledgeable of the short sales process to really take advantage of this opportunity.

What should sellers do in today’s market?

• Do not over react to any offer. Buyers are like any other commodity. When there are fewer of them, you must be open-minded to them all. Doesn’t mean you have to accept their offers, just be open to looking at all and countering them all if necessary.
• Be a serious seller and throw your bait to where the fish are biting. Pricing too high will cause delays for you to move on and get a terrific deal on your next purchase.
• Be the best conditioned home in your area.
• Create a financing package for the type of buyer that would consider your home. You do not always have to lower the price. Be creative in your financing package to sell your home.
• Compare your homes to proven entities not listed entities. This will create less stress in the sales process, as that is what buyers are looking at to make an offer. If you beat them to the punch and price your home accordingly, buyers will buy at your dollar versus negotiating down as they will fear losing your home to another buyer. Avoid the list high and negotiate down, as this will hurt your ability to sell and get offers.

Friday, March 6, 2009

So, How's The Market March 2009

So How’s the Market, March 2009 All data taken from Metrolist, Inc on 3.4.09

The difference between a Real Estate Number and a Real Estate Trend is a significant difference in reporting where the real estate market is and where it is going. Know the difference and it will help you help buyers and seller’s best understand how to take advantage of today’s Denver real estate market.

In the most recent past months and what will be reported for March of 2009 you will see people report a number to give their description of the current market. That number will be the number of sold properties is off 22.52% from February of 2008 to February of 2009. These are accurate numbers for the moment of time someone has taken the data to report.

A number is like taking a picture. Look back at a picture you have of yourself from the past. Has your looks changed? But what really has happened between the picture of yore and the present you? The space between the two is a trend. You didn’t get wrinkles over night or in some cases lose all your hair overnight. Trends help you project where the market is going, a picture can only tell you what happened at the time of the picture.

Do not let the statistic of the moment blind you of the trend the market is in?

Sold data is off 22% year over year. Why? What happened to the economy in the fall and early winter set a stage for home buyers to wait on the sidelines till something positive happened, which it didn’t. For many industries, sales in November, December and January stalled. Hence the lower number of home sales for February 2009 is a pure reflection of the previous 3 months, but not a trend in real estate.

The trend of sold data over the past 6 years is interesting to reflect upon to predict what 2009 will bring to Denver.

February sales have had a decline from 2006 to today. We look to 2006 as being the recipient of aggressive lending practices in 2005. As 2009 moves along you will see 2006 sold data to start to flatten out as those lending practices were recognized in August of 2006 as being inflationary in some markets. Denver, however, did not experience such inflationary housing numbers, causing national surveys, like Standard and Poors/Case-Shiller Report, to indicate Denver will be one of the leading metropolitan areas in the U.S. in housing for 2009 and 2010. The Denver real estate trends are as positive as any market reported in terms of stability and growth in real estate in these national surveys.

What this sold data trend tells us is that Denver is primed to experience an appreciation not necessarily enjoyed in Denver the early part of 2000 decade. This is actually a blessing in disguise for Denver. Sold data is the picture of today, but the trend of lower inventory, higher buyer confidence in homes being put under contract indicates a trend that the sold data will start to tick up this spring and summer.

The next trend to consider is where does the number of available inventory stand as of March of 2009. The picture of a gloomy market that is a result of a picture being displayed is not the trend in Denver.

In March of 2009, there are 15861 single family homes on the market and 5023 condo or attached homes on the market for a total of 20884. One year ago the total inventory for both single family and attached homes stood at 25416 units. So over one year the inventory dropped 20.54% and that inventory has trended lower the last 5 years. March inventory of homes in Denver is the lowest in 6 years.

This trend tells us that the number of available properties is at a lower current supply than previous years which will cause an increase in the demand for those fewer properties on the market. Hence, increasing buyer activity in the coming months for Denver is a very likely outlook based upon supply and demand of homes. Considering the current economic world, real estate in Denver has frankly performed pretty well against other products during the slowest of months.

The number of homes under contract stands at 5907 up from 5559 in March of 2008 or a 6.26% increase in the number of buyers putting homes under contract in 2009. Is this a trend or a picture? It’s a picture, but does help in seeing the trend.

In 2005, the year which recorded the highest March under contracts in the history of Denver, indicates something happened then that didn’t happen in other years. As we now know, fraudulent and mismanaged lender practices created more buyers than really should have been buying. This didn’t just happen in Denver, but nationwide lending practices caused homes sales to skyrocket and allowed the supply and demand to be artificially changed. The difference Denver experienced in 2004 to 2006 was that the average price of a home in Denver did not increase as rapidly as other markets around the U.S. giving Denver a different trend analysis than what is currently being pictured, portrayed or reported from the national media on housing.

Finally the trends indicate some very different predictions for the future based upon the price range you are trying to measure. Homes in the zero to $250,000 price range currently represent 41.72% of the total inventory available in Denver, but over the last 12 months made up 65.43% of homes sold. This makes for a monthly supply of 3.85 months supply of homes. This trend of monthly supply has decreased over the last 26 months in this price point indicating the trend should be to have an increase in price at the starter home prices. We are now seeing multiple offers on well priced starter homes, giving the owners of these properties more dollars than in the past. When that trend occurs in rolls up the price ranges and take 3 to 6 months for every $100,000 of price range to catch on fire. So by July, homes price below $500,000 will start to move at a faster pace then previous years. Once that occurs, price increase follows.

Conversely the upper price points of $1 million to $1.5 million, for example, tells of an inventory of 739 current single family and attached homes and the number of properties sold the last 12 months is 315 single family condo’s sold or a 28.15 month supply. Historically upper end priced property owners have more staying power in high inventory times causing the inventory to drop at more rapid rates than lower priced inventory supplies. Although some buyers bought McMansions when they shouldn’t have, this inventory will tend to level off at a faster rate than lower price ranges. With high loan balance financing being more available in the coming year, which has not been available for more than a year now, this upper end inventory from $750,000 and above offers the best discounts in the Denver market place in terms of price, but the opportunity will only exist at these higher inventory levels. Once the levels become more modest, the opportunities will disappear making today a perfect time to sell your existing home if you are priced below $400,000 and get a discount at an upper end priced home above $750,000.

What should buyers do today?

• Consider making a move up as the old adage buy low and sell high is met when selling below $400,000 and buying above $750,000.
• Keep your current residence and make an offer to lease option an upper end property. This will allow you to get in at today’s prices, and if for some reason the price you enter at today is not good enough for you at the end of your option, you haven’t lost anything.
• Get pre-approved if you are buying below $417,000. The competition for buyers is greater at this point and the sellers are scrutinizing the qualifications more than before.
• Look to alternative financing methods in upper price range homes. The pricing strategy you employ needs to consider, price, terms and time to make the entire transaction more advantageous to your situation.

What should sellers do today?

• If your home is in the starter price ranges and you want to move up, get it on the market now while the inventories are low.
• Homes that are at a market value of $500,000 or more need to consider alternative financing methods to attract buyers. You cannot keep dropping the price, but instead offer more attractive terms to capture today’s buyers.
• The information pipeline to buyers is enormous. Couple aggressive marketing with market experience to coordinate a negotiable price acceptable to you. Do not rely solely on dropping the price to be your defense in the market.
• Be the best conditioned home to get top dollar. There are too many deals out there for buyers who need to fix up the property themselves. You do not want to compete with that, but you want buyers to DESIRE your home, not TOLLERATE your home to get the best price.

Good Selling!.

Wednesday, February 25, 2009

2009 First Time Home Buyer Tax Credit FAQ's

2009 First Time Home Buyer Tax Credit FAQ's.

How could this effect my mortgage payment?

• Assuming you are eligible for the full $8,000 refund it would be like reducing your monthly payment by $667 dollars a month!

• Example: You purchase a home for $200,000 and use the FHA program to finance a $193,000 mortgage at 5% with a payment of principle and interest $1,036/month.
• In theory if you took the full $8,000 refund and put it towards your monthly mortgage payment it would be like paying $370 a month for the first year!


Who is Eligible?

• First-time home buyers purchasing any kind of home - new or resale - are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009.
• For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

How do you define a first time home buyer?

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

How is this different from the 2008 tax credit?

The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

Is a tax credit the same as a tax deduction?

No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

How much will I get back?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even the entire amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

Are there income limitations?

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

Does new construction qualify?

Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

Why should I buy now?

Mortgage rates are at historic lows.
Housing prices have come down over the past 2 years and it is a buyers market.
The government has never implemented a program like this - it is like giving you a check for up to $8000!
Who can assist me?

Let Prestige Real Estate Group and Affiliated Financial Group help you take advantage of this once in a lifetime program.

Sunday, February 8, 2009

So How’s the Market, February 2009

All data taken from Metrolist, Inc. on February 5, 2009

Listing inventory is standing at 20492 single family and condo units for the Denver Metro area. This represents a 19% decrease from February of last year. Typically we would see inventory start to rise in the late winter and spring, but the growth from January to February of 2009 only increased 1659 units or an 8% increase when in past years we have seen double digit increases in the inventory from January to February.

Inventory and contracting are the leading indicators of where the marketplace is headed. Let’s take a look at the February inventories for the last six years to show where the trend has been.

As you can see, the current inventory is at a six year low for single family and condos.

What’s even more impressive is the inventory from zero to $250,000 currently stands at 5790 single family and 3026 condos active for a total number of 8816 total units. The last 12 months in this price range has experienced a total number of 27374 total units closed. This represents a meager 3.864 months supply of homes. Prices are rising in this price point as we write this and our estimate would be to suggest that prices will go up .15% per month or an average of $300 per month for the next 6 months or so on a $200,000 home. Denver will experience appreciation in lower prices for the first time in 4 years and buyers wanting to buy, now is a terrific time to capture the wave of appreciation that will start with recorded closed sales in March.

The inventory from $250,000 to $500,000 is also at a level that will ultimately cause prices to improve for the homeowners but will remain more at the current prices till June. The total inventory is 6627 units in this price point and the last 12 months have experienced 11,578 units closed or a 6.86 month supply. For prices to affectively rise, the supply will need to be between 4.5 month and 6 months to cause buyers to have a sense of urgency. Although on the cusp of doing so in this price point, buyers closer to the $500,000 range will experience more choices than those homes price below $300,000.

Homes priced above the $500,000 range are still competing with higher inventories and some sellers are continuing to discount their prices. With lower interest rates and seller assistance there are opportunities for buyers to move up into the higher ranges. The higher price ranges will gain little appreciation for the next 12-18 months but the opportunity for the move up buyer to buy more house than they thought was available is now here for the taking. These will be outstanding long term investments for a buyers financial future. Sellers will continue to compete for these buyers through price and incentives.

Know the inventory when buying a home, as that will give you a good looking glass into the future.

Know the inventory when selling your home also, so you don’t under price or over price your home based upon competing inventories and lose out on the wave.

The second leg of determining market conditions are those properties that are currently under contract.

As of today, 5337 single family condo homes are under contract in the Denver metro area. This represents a 15%+ increase over January. We would expect to see increases this time of year, but normally they would be in the 8% to 9% range. So 2009, appears to be breaking loose with buyers entering the market. We will watch this trend in future months to see if this continues and establishes a positive trend for the year.

February of 2009 is also the second highest under contract recorded month in the last 6 years. Last year the Denver area had 5559 homes under contract in February, up from 5216 in 2007, 5128 in 2006, 4192 in 2005 and 4274 in 2004.

Why are people buying in today’s market?

1. Interest Rates - The lowest in 41 years.
2. Foreclosure Advertisements – Brings buyers out because of the greed factor of getting a deal. Once a buyer sees the condition and sees a re-sale home in better condition at similar pricing, the choice becomes obvious.
3. Short Sale Advertisements – Brings buyers looking for the same deal as foreclosure.
4. Inventory is dwindling in lower price ranges and first time buyers do not want to get squeezed out of the potential investment gain.

Look for increased buyer activity putting homes under contract in upcoming months as interest rates continue to stabilize in the 4 to 5% range for conforming loans.

The sold data is the lagging indicator. In the Denver metro area in January, 2017 single family and condo homes closed. This is down 21.46% from one year ago. The main reason for this was the economic uncertainty that occurred in October through January. With new stimulus packages for the economy and housing, people’s confidence in the Denver market will allow them to start buying homes.

Here’s why.

1. Job stability in Denver has been steadier than the national economy. So long as jobs stay strong and Denver unemployment stays below 6.5%, housing in Denver will be a great buy this year.
2. It takes 90 days for under contract data to start to reflect into the sold data. What was written in January and February will close in March and April. The market will experience month over month gains rapidly the next four months and toward the middle of the year to outperform 2008. Once that news happens, markets turn fast and buyers do not want to miss the opportunity.
3. Denver’s economy is more stable than the nation by many economist predictions for 2009.

What does this mean for buyers and what could they do to improve their net worth today?

· Consider buying an investment home below $250,000. These will go up in value this year.
· Move up from your existing residence to a home in an upper price range. This will go up in value over the next 12-18 months and really make an impact on pricing in 3 years.
· Take advantage of low rates.
· Learn how a $15,000 tax deduction in the purchase of a home could save you thousands on your income taxes for 2009.

What does this mean for sellers or homeowners not selling to improve wealth?

· Consider refinancing your higher rate mortgage to a lower rate mortgage and shorten the amortization schedule to pay of the loan sooner. This builds equity, which builds wealth.
· When selling, make your home stand out from the rest by being the best conditioned and fairly priced on the market. buyers are looking for the perfect home at the right price.
· Lower priced homeowners are in the perfect position to sell high and buy a move up home.

Positive signs for 2009

Friday, January 9, 2009

How's the Market - January 2009

So How’s The Market, January 2009 All information taken from Metro list, Inc. 1.6.09

Great news…January listing inventory is at a low not seen in 6 years in the Denver Metro area. The current single family and condo total units that are active on the market as of 1.6.09 is 19,833. This represents a 19.03% reduction from January of 2008 and a 2438 unit decrease from just one month ago. This total active inventory represents a 5.57 month supply of homes.

This is the first time since January of 2006 that Denver has experienced a monthly supply lower than 6 months for the entire marketplace. However, the better way to look at this data is to break up the price ranges to show the difference in what is happening at lower end prices and upper end prices.

Looking at the price range between 0 and $250,000 there are 5707 active single family homes and 2886 condo units active on the market for a total of 8593 active homes in the 0-250K price range. There were 20303 single family homes closed in this price range and 7290 condos closed for a total number of sales of 27,593. Taking the 8593 actives divided by the 27593 sold properties = .31 X 12 = 3.74 month supply of homes between 0-$250K.

There is no question prices will rise in this lower level starting this month. Here’s the inventory of January for the past 6 years.


Let’s go to the price range of $250,000 to $500,000 to see the difference in the market conditions. The number of single family homes that are active between 250K and 500K are 5256 and active condo units are 1053 for a total active listing inventory in this price range of 6309. The total number of sales is 10769 SF and 1039 Condos for a total of 11808 homes sold. Doing the same formula we get a 6.41 supply of homes. This would indicate that this price point in the next 6 months will start to experience price increases as the inventory reduces below 6 month supply. If the market inventory increases in this price point for whatever the reasons, i.e. foreclosures, desperate sellers, etc, as this makes up the majority of the homes in the Denver area, it may take to the 3rd or 4th quarter of 2009 to see appreciation, but it is coming and now offers a great time to buy.

The price range from $500K to $750K is a little less active than below $500,000 as a lot of people have seen the past few months. This makes for a perfect time for buyers to move up as they can sell their home priced below $500k for closer to market value and be able to pick up an upper price range home with a really low interest rate. Here’s why?

The current single family inventory is 1891 and condo active units are at 371 in the $500K to $750K price range. The number of total sales in the price point is 2048 or a 13.25 month supply. This supply of over one year will start attracting buyers that can move up and get in at very low interest rates if they have the down payment to stay in a conventional loan.

By considering obtaining a loan at $400,000 today a buyer will be offered a 4.5% interest rate. This would create a payment of principal and interest of 2,026. When the rates were 6% the monthly payment would have been $2398 per month or a difference of $372 dollars per month. What this means in terms of qualifying for a loan is that the monthly income could be reduced by $1200 dollars to qualify for a loan under today’s lower rates. This only creates a larger savings spread as you go up in price.

Another reason for a buyer to buy now is that even though a home priced at $800,000 may not appreciate much in 2009 and their current resident at $400,000 may appreciate at 3% the potential appreciation in the $800,000 home will be better over a 5 year period. Take $400,000 times 3% or $12,000 grand and do simple interest to equal $60,000 increase over 5 years. The same home at $800,000 at 3% = $24,000 and do simple interest for only 3 years since the next two might not give the buyer the appreciation in the early years due to the inventory, but still equals $72,000 of appreciation. It is a much better time to move up now, then before the $800,000 home starts to appreciate. Pass this simple idea around and in 5 years buyers who buy today will have built wealth into their portfolio.

The next price point of $750K to $1 million will expand a buyer’s ability for future appreciation. Total inventory in this price point is 1077 SF and condo homes available and there were 656 homes closed for a 19.7 month supply

Homes above $1 million will continue to lag, but you will see this inventory decrease a little faster than you would expect because people who currently reside in this price point have different financial options and typically will ride out the market versus stay on the market. Watch for this price point in 2009 to decrease a slow but deliberate rate.

The number of homes under contract in January of 2009 is 3.96% higher than January of 2008. The total number of 4652 homes under contract is moving in the right direction, but will still need to catch up before we can call the market to be on fire. Once the number of homes under contract reaches 6500 units, Denver will exhibit appreciation starting with the lower price ranges first.

Finally, the sold data for 2008 was off 6.47% from 2007. An interesting piece of data to consider is that December of 2008 had 2772 homes closed and November 2008 had 2602 homes closed. This is the first time in 6 years that December outperformed November and that December of 2008 was only 22 units shy of the 2794 closed units in December of 2007. The real trend to watch is when a year over year sold data increase for each month. The Denver market will be able to blow the whistle on a resurging market when you have a current month outperform the sold data from a previous year. A trend is a full 3 months in a row before we can really toot the horn, but we suspect the number of sales for 2009 will start to outperform the number of sales for 2008 each month starting early in the year. Here’s the last 5 years of total sales for single family and condos for each year.


What should sellers be doing now to make this a successful market for them?

· Consider pricing your home at or right below market value to attract the most attention. Do not worry about the low ball offers that may come in, but consider the number of buyers that will consider your home to be a deal which allow you to sell in 2009 and look for other opportunities.
· Make your home the best kept property in your price range and market.
· Price your home on the search numbers, zero, 25, 50 and 75. What this means is the buyers search properties in computer numbers like 200,000 to 225,000. This pricing strategy allows for multiple search criteria. So if your home is priced at $300,000 the buyers searching $275,000 to $300,000 pick it up and the buyers searching $300,000 to $325,000 pick it up. When interest rates drop buyers tend to search one price level above their qualification price to see what they can get. Get your home positioned correctly.

What should buyers be doing now?

· Move up to a home you really want, but have been hesitant to move due to the uncertainty of the marketplace.
· Take advantage of the lowest interest rates in 40 years
· Consider asking the seller to pay for your closing costs to assist in your purchase. The seller can pay up to 3% of the closing costs on most loans.