Home resales in metro Denver were down 8.5% in February from a year earlier, following a similar year over-year decline in January, according to Metrolist Inc. As the housing markets are finding their sea legs after being propped up by the first time buyers government stimulus in 2010, we see consumer confidence slowly increasing just as sure as the buds starting to appear on all of our trees and bushes. The number of homes Sold rose 3.4% in February to 2,229, compared with the 2,156 the previous month, according to an analysis of Metrolist data. Meanwhile, the Conference Board’s Consumer Confidence Index, which had increased in January, improved further in February. The index stands at 70.4, up from 64.8 in January.
The bright spot in the current market is that approximately 40 percent of the market this time last year was a result of the first time buyer tax credit. The decline in sales is a natural result of that going away. Take that out of there, and look at the activity we have today, and it’s really fairly positive. We do have Activity in the market! Consumer confidence seems to be increasing across America as 68% of potential homebuyers and sellers in a recent survey, believe that the real estate market and property values will recover in the next year or two. In addition, 86% of Americans believe real estate is a good investment despite the market volatility of the past few years!
Homes Sold last month were on the market an average of 124 days, versus 95 days in the same month a year earlier. The inventory of available homes in the Denver area fell by 3.4% last month from a year earlier, to 18,685 including single family homes and condos. The potential Seller’s in the market seem to be more cautious and slow to come on the market, probably due to the fact that the average price also dropped last month by 2 percent for single family homes to $265,277 and condo resales were down 6 percent, to $155,656. The New home building activity was also down 43% from a year ago, with some caution to downward pressure in home prices from too much inventory. There is the whole question of a “shadow inventory.” The shadow market is generally considered foreclosed homes owned by banks that have not yet hit the market, increasing the supply of unsold homes on the market. These distressed homes compete with other houses on the market!
Advice to Sellers:
Sellers in any real estate market are looking to get the best possible price. If you are looking to sell in the next year, today’s price may well be the best price. Homes values stabilized somewhat in 2010. Many hoped that was a sign that values had bottomed out, but looking at a couple of recent reports it seems that a number of factors continue to dampen the recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand and the overhang of shadow inventory all continue to exert downward pressure on prices. We are hoping that renewed demand in Spring and Summer activity will reduce the downward pressure, not that prices will start to stabilize or increase, but reduce the pressure to drive prices lower.
Advice to Buyers:
Call Delroy Gill your RE/MAX Professional agent today to begin your home search! The buying power for Buyer’s today is almost unbelievable! As downward pressure is on the price of a home and value in the market is
amazing, there is just as much upward pressure on mortgage interest rates and the potential for them to go up as the economy begins to grow. Home prices may lower a few thousand dollars still, but a small adjustment in interest rates may affect your buying power by tens of thousands. History has shown us as demand goes up, so do interest rates! Always remember that in any market the good homes will sell quickly, so if you like what you see, consider making that offer today before another buyer does.
AS OUR DAFFODILS AND TULIPS BEGIN TO POP UP, SO WILL BEAUTIFUL HOMES! JUST LIKE A SPRING FLOWER THAT DOESN’T LAST VERY LONG, THE GOOD HOMES WILL COME AND GO QUICKLY TO! CALL YOUR RE/MAX PROFESSIONAL TODAY!