Why it should be a great spring for real estate

A year ago this time, this headline wasn’t imaginable. We were in the throes of one of the worst recessions of our time and the market was at a near standstill.

But what a difference a year makes. Today our market is seeing drastic signs of recovery and we are finally moving in a positive direction. To build on that momentum, I’ve put together my top reasons why I believe it’s going to be a good spring real estate market. Only time will tell if my theory is correct but until then, let’s take a look at the facts:

1. Tax Credits Are Helping Drive the Entry Level Market – Thanks to the $8,000 first time home buyer tax credit and the $6,500 existing home buyer tax credit, we are seeing some very strong signs of recovery in these two market niches. With the impending expiration set for April 30, we anticipate that the next two months will bring a surge of buyers looking to get in on a home prior to the credit’s expiration. That results in good news for our market and will help to decrease some of the surplus inventory and bring greater demand for those entry level sellers.

2. Interest Rates Remain Low – Even though we have seen interest rates tick up a bit in recent months, rates are still relatively low. When rates are low, it means a buyer has increased purchasing power and ultimately can get more home for less money.

3. Affordability Remains High – Due to the market correction we’ve seen over the last few years, affordability remains quite high. What this means is a larger percentage of individuals are able to purchase a home.

4. Despite Unemployment Figures, Housing Demand Will Eventually Rise – Yes, unemployment figures are high comparative to the earlier part of the decade. In fact, on a national level, the latest counts were approximately 9%, according the United States Bureau of Labor. Here in Colorado we’re running at about a 7.7% unemployment rate. While yes I would agree that the number is concerning, on the flipside it means that 93% of Coloradans are employed. If the economic outlook continues to improve, that’s going to boost the confidence of the 93%. That’s a lot of people who can boost housing demand.

5. Colorado is an Awesome Place to Call Home – It sounds a little trite and yes, I may be a bit biased, but it’s a fact. Colorado offers one of the most diverse and unique living experiences and economies in the country. From our beautiful terrain, our diverse blend of activities and our overall thriving economy, we are fortunate to live in somewhat of a thriving microclimate comparative to the rest of the country. That all adds up to a demand for housing that will help to drive our market towards recovery, possibly sooner than other states.

Let me remind all of us that the current housing is in a place of recovery. Overall what we’re seeing is a tale of two markets. The luxury market is generally seeing increased inventory and price discounting is the norm. Last I checked we had far above a six-month supply of inventory of our luxury homes. In some cases anywhere from 9-12 months+.

However, if you look at our entry level market, things really haven’t slowed down much at all. In fact, in many cases, they’re rising! We’re still seeing lots of interest for well-priced properties in good neighborhoods.