Tuesday, June 8, 2010

Denver Real Estate Market Update June 2010

So, How’s the Market, June, 2010
All real estate data taken from Metrolist, Inc, on June 7, 2010. Denver, Colorado.

“Five Reasons to Sell and Buy a Home in June of 2010!”

REASON Number One! The buyer competition is lower than in earlier spring months, which benefits buyers. Sellers have an opportunity to capture the buyers with creative terms. Buyers will not compete with as many buyers as the previous month giving them a better negotiating position. This looks to be a short term opportunity for buyers, as we would project more buyers entering the market as rates rise.

The tax credit pushed the buyer pool into buying in March and April and the lack of properties currently under contract in one month decreased by 2001 units. This means that the pace of buyers buying has slowed down giving a buyer the buying opportunity in June 2010. Each price range and location offers different data, but if you are a buyer today you have fewer buyers as competition this month.

REASON Number Two: Interest rates hit historical lows in June in the mid 4.5% range for a conforming loan rate. The buying power is off the charts for a buyer to really maximize their housing investment. A $300,000 loan at 4.5% = $1514 dollars principle and interest per month. That same $300,000 at 7% = $1984 dollars principle and interest per month or $470 dollars more payment per month or $5640 dollars per year more. The average person lives in their home 5-7 years meaning the savings in payments over 7 years would be $39,480! Although rates are expected to rise slowly through 2010, we suggest buying now to lock in historically low rates and avoid the rush of buyers who enter the market when rates to start to rise. Is it worth it to you to save thousands of dollars in payments when you buy today?

REASON Number Three: Sellers in entry level single family price ranges which is below $350,000, can position their home against fewer properties this year than previous years. The tax credit absorbed quite a few entry level properties making for a unique “Move Up” opportunity for sellers. Sell at close to list price on the entry level home and become a buyer in the upper price range and look for a discount. The absorption rate for a single family home priced in Denver from zero to $500,000 is 5.1 months supply. This makes the lower priced range homes a sellers market. Conversely properties from $750K to 1 million and above have an absorption rate of 30 months with 2250 homes on the market and an annualize number of sold single family homes above $750K to be a projected 892 homes. This upper end phenomenon creates a buyers opportunity not normally seen in the last 50 years.

REASON Number Four: The last time the Denver market had 3 consecutive months of sold data that exceeded the previous year was 2005.

Historically, 3 straight months of increased sold data would signal the market is on an upswing. Since the Tax Credit artificially increased sales in April, watching this data over the next 3 months will be good indicators if Denver is on the rebound for appreciation or if we are still bouncing along the bottom of the market. Either way, buying now assures you of buying at the bottom of the market.

REASON Number Five: Denver is considered by numerous experts as the city that will out perform the national market in job growth and job stability for the next several years. When there is a pool of jobs, people move to the city with the jobs. When people move to a town it will lower inventory and when inventory reduces, prices go up. There are three parts to a buyer making a buying decision: 1. Average Price. 2. Interest Rates and 3. Job Stability. When all three are aligned in favor of the buyer, like June of 2010 is, properties start to move and appreciation occurs.


Why Should You Considering Selling and Buying in June 2010?
• Excellent Opportunity to Buy an Appreciable Asset at the lowest prices in years.
• Low Interest Rates Make Your Buying Power Exceptional.
• Building Costs are low for those who want to build their dream home.
• Sellers are more realistic to the market conditions and their Odds of Selling.
• The future of real estate will continue to be a solid investment and buying at the lower end of the market is Smart. Do you wish you would have bought more real estate in 1988? Don’t wish the same thing in 2028 about 2010.

What should sellers do in today’s market?

• Only put your home on the market if you understand the Odds of Selling and Positioning Your Home where buyers are buying.
• Become a motivated seller by offering attractive terms to buyers
• Make your home a STAR Home! Shows Terrific And Realistically positioned.

What should buyers do in today’s market?

• Leverage your buying power with the low rates.
• Financing Terms could make an offer very attractive for you.
• Get Pre-Approved to Buy like a Cash Buyer.