Friday, April 15, 2011

March is the preview of the prime home selling/buying market:

The following quote attributed to an unknown source says it best “Denver is normalizing. Inventory is steady, buyers are shopping, and sellers are ready.”

- The March 2011 month end inventory of unsold homes is at 19,320 units, up 3% from last month and down 6% from March, 2010. The inventory of unsold homes will increase in the coming months.

- 3,571 units were placed under contract in March, down 3% from February and down 40% from March, 2010. Please note that in March 2010, the First Time Home Buyer Tax Credit was set to expire in April, 2010. As such, the March, 2010 market saw buyers placing multiple offers on multiple homes in order to insure use of the federal program. This buyer frenzy continued through April, 2010.

- 3,209 units sold/closed in March, up 44% from February and down 11% from March, 2010.

Please see the above note to appreciate the impact of the First Time Homebuyer Tax Credit program last year.

In review, the first time home buyer/move buyer needed to have the home
under contract by close of April and closed by June 30th. The June date was later changed to September 30th to take into consideration the extended time period required to close a distress property.

Home prices remain fairly stable as the Denver market is entering its prime home selling/buying season.

- Single Family average prices, $249, 644 for 03/2011, increased modestly month over month and year over year.

- Residential average price at $273,877 remained steady month over month and year over year.

- 42% of the Residential properties sold/closed in March were under $200,000 and 28% were in the $200,000 to $300,000 price range.

- Condo average price at $159,853 remained steady month over month and year over year. 43% of the Condo properties sold/closed in March were under $110,000 and 74% were under $200,000.

- Condo median prices decreased 4% to $120,000 in 03/2011 when compared to 02/2011 and decreased 9% from $131,579 in 03/2010.

- Residential median prices increased 2% to $224,900 in 03/2011 when compared to 02/2011 and decreased 2% from $229,000 in 03/2010.

General Economic Factors:
The following parameters, relative to the housing market, are improving modestly. Consumer confidence is increasing, thus it is more likely that the consumer will make larger $$ purchases. Employment is showing a slight upturn, thus reducing the fear of “job loss”. Mortgage rates remain affordable, even though the due diligence paperwork requirements are increasing. Distress properties continue to be a factor in the market. Fortunately, the Denver market continues to manage the existence of these properties.

Recently released polls indicate that Denver continues to maintain a strong economic base, employment is increasing, and the economic outlook is good. Improvement will be slow and steady.

Advice to Sellers:
According to a recent MSNBC poll, a seller’s most common mistakes are over pricing the home, relying too much on just comps, failing to take into account the home’s web appeal, and hovering over prospective buyers during showings.

Denver is entering the prime home selling season. It is time to manage your expectations and take advantage of this prime home selling season to sell your home.

Advice to Buyers:
Rental rates are increasing and availability is decreasing. Americans are still optimistic about home ownership. 80 plus % of Americans believe that home ownership is the best long term investment even though they are not expecting a speedy recovery of the housing market.

© 2011 Garold D Bauer, All Rights Reserved, Information Deemed Reliable But Not Guaranteed