This is a question I get quite often. Where is the housing market going? I can tell you I have been running into multiple offer situations and homes that are priced correctly and in good condition are selling. The inventory in the Denver metro area is continuing to tighten. Coupled with low interest rates, it is helping many people get off the fence. We live in a great city where people want to be. There are more people moving here all the time and also businesses with higher paying jobs. Denver is a great place to call home!
CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.
In the first release of CoreLogic’s new MarketPulse newsletter Wednesday, Fleming explained his rationale for such an assessment.
He notes that housing is an industry with long business cycles. Regional housing recessions have typically taken anywhere from three to five years to find their bottom, and Fleming says the national housing recession has behaved similarly in that it has bounced along a bottom for the past two years.
Fleming points out that housing affordability is rising dramatically due to a combination of home price deflation and rock-bottom mortgage rates. In fact, he says, after adjusting for inflation, this has been a “lost decade” for housing as prices are the same as at the beginning of the millennium.
“The time is right in 2012 for prices to begin growing again,” Fleming said, “and housing affordability will put a floor under any further significant declines.”
Fleming says he will be watching the spring and summer buying season closely for positive signs of demand.
He points out that households are paying off their debts and at the same time accessing credit more easily, with some even adding Home Equity Lines of Credit in the third quarter of last year – the first such movement for these second-lien mortgage products since the financial crisis began.
Fleming cites a quarterly survey by the New York Federal Reserve Bank, which shows total household debt continues to decline. At the same time, consumer sentiment rebounded strongly in the latter part of 2011, posting a six-month high in December – an indication that consumers’ confidence in the strength of the economy is growing, according to Fleming.
Most housing statistics basically moved sideways in the latter part of 2011, but Fleming finds several positives in the numbers. Although market indicators are coming off of very low levels, he notes that both existing-home sales and single-family housing starts have begun to increase, homebuilder confidence is improving, and affordability is at an all-time high.
Putting all of these statistics together suggests that while there is a very long way to go, the housing market is likely to sustain these upward movements in 2012, according to Fleming.
“While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012,” Fleming said.
He concedes that some impediments do exist, including slower global economic growth, a recession in Europe, and fiscal and political uncertainty in the United States.
But Fleming says when you look at the big picture, “we are bullish on the prospect of improving economic performance in 2012 from 2011.”
Monday, January 23, 2012
Wednesday, January 4, 2012
How are metro Denver home sales at this time?
Happy New Year! I always think the new year brings new beginnings, new goals and new things to try. Below is an article from the Denver Post that I thought was beneficial in explaining what is happening with the metro real estate market at this time.
Metro Denver home sales edged up slightly last year compared with 2010, even as prices dropped.
Last year, 39,387 homes sold, up 1.5 percent from the 38,818 houses sold in 2010, according to an analysis of Metrolist data released Tuesday.
The median sale price dropped 2.13 percent to $230,000 for the year, from $235,000 in 2010.
However, the continuing story since the summer, according to real- estate experts, is sliding inventory. The number of homes on the market in metro Denver last month was the fewest in more than a decade.
"What strength we've had in pricing is due to the low inventory," said Chris Mygatt, president and chief executive of Coldwell Banker Residential Brokerage.
There were 12,531 homes on the market in December, down 33.6 percent from the same month in 2010, according to an analysis of Metrolist data. In 2000, the inventory hit a low of about 9,000, said independent real-estate consultant Gary Bauer.
"If it continues to drop, it's going to have a dramatic impact on the market," Bauer said. "Some people like to see a lower inventory because it increases prices, but I personally think it will reduce transactions."
In August, the number of metro Denver homes on the market dropped more than 20 percent from the year before, and the downward trend continued through the year.
Inventory is low not only because sellers take their homes off the market during the holidays but also because they never put them up for sale during the fall selling season.
"And the government influence on slowing down the foreclosure activity has taken that portion off the market," Bauer said.
Homes priced at less than $200,000 are getting multiple offers, and there's also been a surge in activity for homes priced above $500,000, Mygatt said.
"We've seen really solid activity at that price point ($500,000) for the last six months," he said. "Before we see real recovery in Colorado, we've got to see strength in the luxury market."
Metro Denver home sales edged up slightly last year compared with 2010, even as prices dropped.
Last year, 39,387 homes sold, up 1.5 percent from the 38,818 houses sold in 2010, according to an analysis of Metrolist data released Tuesday.
The median sale price dropped 2.13 percent to $230,000 for the year, from $235,000 in 2010.
However, the continuing story since the summer, according to real- estate experts, is sliding inventory. The number of homes on the market in metro Denver last month was the fewest in more than a decade.
"What strength we've had in pricing is due to the low inventory," said Chris Mygatt, president and chief executive of Coldwell Banker Residential Brokerage.
There were 12,531 homes on the market in December, down 33.6 percent from the same month in 2010, according to an analysis of Metrolist data. In 2000, the inventory hit a low of about 9,000, said independent real-estate consultant Gary Bauer.
"If it continues to drop, it's going to have a dramatic impact on the market," Bauer said. "Some people like to see a lower inventory because it increases prices, but I personally think it will reduce transactions."
In August, the number of metro Denver homes on the market dropped more than 20 percent from the year before, and the downward trend continued through the year.
Inventory is low not only because sellers take their homes off the market during the holidays but also because they never put them up for sale during the fall selling season.
"And the government influence on slowing down the foreclosure activity has taken that portion off the market," Bauer said.
Homes priced at less than $200,000 are getting multiple offers, and there's also been a surge in activity for homes priced above $500,000, Mygatt said.
"We've seen really solid activity at that price point ($500,000) for the last six months," he said. "Before we see real recovery in Colorado, we've got to see strength in the luxury market."
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