Now that we’ve passed the months of talk regarding the Economic Stimulus Package and the Foreclosure Prevention Plan, we can finally move on. I for one am relieved.
It’s time to get back into a position where we feel secure, where we feel confident and where we can once again make strong decisions regarding our future…and that includes decisions we make about real estate.
Right now what I am finding is that many buyers are on the proverbial fence. They’ve been waiting to see what was going to happen to interest rates. They were waiting to see what the results of the Economic Stimulus Package would be. And so they sit.
Now I realize that every individual situation is different so please don’t take this as a broad based brush that I am painting with, but what I can say is that buyers may truly be in one of the best positions than they have been in some 50 years to purchase a home. Consider the benefits to today’s homebuyer:
- New $8,000 first time home buyer credit (and in most cases, the buyer does not have to repay the tax credit).
- Reinstatement of FHA, Freddie Mac and Fannie Mae loan limits. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750.
- Historically low interest rates. In my February Reality Check message I shared with you how changes in mortgage rates can affect a consumer’s purchasing power. The fact is, right now interest rates are low—certainly by historical standards—and those low rates translate to increased purchasing power for buyers.
- Though we’ve seen decreasing inventory in many of our markets over the last several weeks, we still do have quite a bit of inventory in many markets. This translates to more choices for buyers. We are also anticipating that Spring will bring on a lot of good, new inventory for us and that should bring in a surge of new buyers—for today’s buyer’s, that’s competition for you.
My point in all of this is that you may not want to make the mistake of waiting. Sitting on the sidelines could cost you plenty in terms of higher housing prices, increased competition, fewer choices and higher interest rates. We live in one of the most desirable areas in the world and regardless of the recent slowing in the market, there is still plenty of pent-up demand. Even the most pessimistic analysts aren’t predicting a decline in home prices, simply a slowing of appreciation rates.
And with that good information in tow, let’s take a look at this week in real estate:
- Boulder—Our Boulder office reports that both showings and listings are up dramatically with new listings up 133% week over week. Sales are holding steady but Agents are reporting that several listings that have languished on the market for months are now selling or getting increased showing activity. Our Longmont office reports that it had some great news this week including a big headline in the local paper that read, “Fewer Homes for Sale in Longmont.” The number of homes for sale decreased by more than half in the past two years. This is good news and hopefully a trend in the right direction. We are experiencing quicker turnaround time from banks on short sales, some are servicing cash deals in a separate department. We expect this to keep those cash buyers intact and get the deals done as quickly as possible.
- Conifer—The Conifer office reported decreasing inventory with increased showing activity. If this becomes a trend, it could be a good sign of stabilizing prices. We had just one new listing this week and one go under contract. There were 47 showings for the week.
- Evergreen—The Evergreen office reported that we had steady listing inventory and sales activity for the week though showing activity was on the rise. We had a total of five new listings for the week and one buyer that went under contract. There were 74 showings for the week plus eight Agent previews.
- Denver Central—Our Denver Central office reports that energy is still good though contracts have slowed a little. We are starting to see increased interest in our high-end properties including both buyers and sellers. This is a good indication that buyer confidence is coming back. Short sales are still prevalent and banks are still open to negotiation and are responding quickly.
- Devonshire—Our Devonshire office reported that showings were down somewhat this week. We had a big surge in price reductions and offers on properties. We still have pent up demand for buyers looking in specific areas. One of these is the south area with Cherry Creek schools. We have had lots of listing appointments and sellers are moving back into the mindset that it is indeed time to put their homes on the market. We see positive things happening as we move into Spring.
- Douglas County—The Southwest Metro office shares that this past weekend was the best since early Fall of 2008. Our buyers are buying and homes listed in the $250,000 range are going quickly. Our mortgage rep has nine deals closing this week. We had several double enders from open houses and from call nights we are seeing an increase in listings for next month.
- El Paso County—Our Colorado Springs office reporting decreasing listing inventory and sales activity though showing activity was steady. This market is seeing a bit of a change with many sellers in a wait and see mode. The economic articles locally are showing growth in the area. The military returning shows only about 10% are potential buyers with most of that 10% going into rentals instead.
- Elbert County—Our Parker office reports that it seems as if buyers are trying to figure out the effect of the stimulus plan. Although showings have increased, the amount of offers has gone down slightly since last week. Also, there are a number of buyers that are still waiting for lien holder approval on short sale offers. The inventory continues to decrease slowly, however it is too early to call it a trend since many of the listings going off the market did not sell.
- Larimer County—Our Fort Collins office is seeing increases across the board. With the recent passage of the Economic Stimulus Package that includes an $8,000 tax credit to first time home buyer, is already showing its signs of a positive trend upwards. Enterprise Car Rental also announced the relocation of its regional claims center to Fort Collins. This will provide upwards of 100 local jobs to the area. While the environment remains challenging, Fort Collins and Northern Colorado remain top contenders for emerging from this economic downturn earlier than other parts of the country.
- Loveland—The Loveland office reports a tremendous turnout to the Loveland Luxury Home Tour last weekend which shows that clearly many people are interested in seeing what is on the market in the upper-end. We had 11 homes hosted open with over 300 people on tour. The properties on the tour were lakefront and foothills homes priced from $600,000 to $1 million+. Activity remains on an upward trend and thanks to the terrific weather, we are seeing more and more showings being scheduled during the week.
- North Metro—Our North Metro office is seeing many homes in the upper price range facing short sale or foreclosure. It will take some time to work through this. Buyers are able to purchase some very special homes at very special prices in our area. Showings are increasing steadily and contracts are beginning to be approved by the banks. If you are considering buying your dream home, now may be the time.
- Southeast Metro—Wow! We crossed the 500 mark for showings last week and scheduled 560 showings. This activity is unheard of in February. I’m told that traffic through open houses is unbelievable. We are on track to close over 100 transactions this month.
The lesson I’d like to leave you with this week is that waiting for the real estate market to hit rock bottom may be a mistake. The only way to know that the market has “hit rock bottom” is when it is on its way up and by then, the window of opportunity is gone.
The current housing market offers a unique window of opportunity for confident buyers. The exciting news is that for the first time in quite a while, the stars are in alignment for consumers: mortgage rates remain low (certainly by historical standards), loan limits have been raised, there is an $8,000 first time home buyer credit and there is a large selection of homes to choose from. Now truly may be the time to buy and you may not want to make the mistake of waiting; because my guess is that if we were able to jump ahead 10 years from now, we’ll be looking at this market as a thing of the past—a time when we all probably should have been buying a lot more real estate.
Until next week,
Have a great one,
Chris Mygatt
President and Chief Operating Officer
Coldwell Banker Residential Brokerage Colorado
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