First, CNNMoney.com reported a sudden, unexpected surge in U.S. housing starts. According to the Commerce Department, housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January. The big surprise: Economists were expecting starts to decline to 450,000, according to consensus estimates by Briefing.com.
Furthermore, applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. The other big surprise: Economists were expecting permits to fall to 500,000.
Also interesting this week, retail sales figures fell much less than expected in February, and surprisingly strong January sales were revised even higher. According to CNNMoney.com, “U.S. store sales showed a smaller-than-expected decline in February after an unexpected surge in January that was bigger than originally reported…The Commerce Department said total retail sales fell 0.1% last month, compared with January’s revised increase of 1.8%. Economists surveyed by Briefing.com had been expecting a decrease of 0.5% for February.”
So, is it safe to call this a trend? Are we out of the woods yet? It’s tough to say. In all honesty, you don’t know whether or not you’ve hit bottom until you’re on your way back up but it seems some of the critical signs are starting to show signs of life which is welcome relief for our wounded economy.
Also in the news this week, the Federal Reserve announced plans to purchase up to $750 billion in mortgage-backed securities and up to $300 billion in longer term Treasury securities. Our representatives at the National Association of Realtors applauded the plans noting “This is great news for American home buyers and homeowners because mortgage interest rates will continue at historic lows.”
What this means for Americans is that a greater number of home buyers will be able to purchase a home and homeowners facing challenges will be able to refinance into better terms. As NAR noted, “We already are experiencing a great improvement in housing affordability due to historically low interest rates and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory.”
Along the lines of mortgage relief, the Treasury Department this week launched a new website for consumers seeking information about the Obama Administration’s Making Home Affordable loan modification and refinancing program. The site, www.MakingHomeAffordable.gov, offers features including interactive self-assessment tools that will empower borrowers to determine if they are eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program.
This is a helpful site that we should all be sharing with our friends, families and clients alike.
Finally, on Friday, Jim Gillespie, president and CEO of Coldwell Banker Real Estate LLC, will participate in a discussion about the state of the housing market, live from the New York Stock Exchange on CNBC. This will occur on Friday at approximately 4:30 p.m. (Eastern).
Jim will participate on the “Roadmap to Rebound” segment hosted by Maria Bartiromo. Yale economist Dr. Robert Schiller and Sanjiy Das, CEO of CitiMortgage, will also participate.
In another powerful symbol of what our Coldwell Banker and Realogy leaders are doing on behalf of consumers and the real estate sector in general to enact change that will stimulate housing and ultimately the economy, Jim plans to call upon government leaders to enact a $15,000 non-refundable tax credit to ALL buyers and also a mortgage buy down that would bring rates to the 4-4.5% range. This, NAR reports, could generate an additional 840,000 home sales over 12 months. This home buying activity would have major implications in stimulating the overall US economy since NAR also reports that each home sold generates more than $60,000 in economic activity. The proposal would also have a greater impact on foreclosures than the current stimulus package. I hope you will all watch.
Now, with all of that exciting news for the week in tow, let’s take a look at our local real estate news:
- Boulder/Longmont—Our Boulder office reports that new listings are down 10% from the week before, but listing activity is still very busy. Sales in the second week of March increased by 23% (from the previous week). Showing activity continues to climb and based on Agent reports there are loads of buyers out there. They still are taking longer to pull the trigger than in past years, but not as many seem gripped by fear as a few months ago, as the increased rate of sales shows. Houses that are in top condition and under the median price ($539,000 in Boulder) are selling briskly, often within 10 days of listing. Our Longmont office reports that showings were off 11% from last week. We are seeing activity in the new builder market. Builders are offering some super incentives and buyers are seeing great values. We are still seeing a lot of buyers "sitting on the fence.” They are waiting for the interest rates to go down or they are waiting for the prices to decline—the problem, there hasn’t been much movement on either end. We are all waiting for the press to realize that real estate markets are local and we are not in any kind of drastic state here in Longmont.
- Conifer—Our Conifer office reports one new listing during the week. Four listings went under contract during the past week plus one buyer—one listing was under contract within one day of going on the market and one within two days. Showing activity continues strong with 34 showings during the week.
- Evergreen—Our Evergreen office reports a total of five new listings for the week. Two listings went under contract. We had 73 showings for the week plus seven Agent previews for a total of 180 thru mid-month.
- Denver Central—Our Denver Central office reports that buyers can expect to compete with other offers for ANY property priced under $250,000 in the Denver Metropolitan marketplace. There is renewed interest from buyers because of low mortgage rates, new tax incentives and an overall feeling that the Denver market has hit bottom in inventory. Anticipation is high that price increases will follow shortly.
- Devonshire—Our Devonshire office is reporting that even in these challenging times we are still setting showings at a pretty good rate so we know that buyers are out there. Buyers are very hesitant to make offers and commit to purchasing at this time as they are feeling the angst of the current economic conditions. With rates for mortgages dropping again, it may be the perfect time to buy. If sellers are pricing their homes correctly, they are selling. As real estate brokers, we continue to underscore our value as we are knowledgeable on what it takes to get transactions done. It would behoove consumers to use a full time real estate professional. We are making a concerted effort to get the good news out there when most news seems to be gloomy at best. It may be a great time to buy. Interest rates are fabulous and sellers are pricing their homes realistically at last.
- Douglas County—Our Southwest Metro office reports that our showings have increased as well as the attendance at our open houses. We have had several Agents report excellent turn out at their open houses and they have picked up buyers and listings. We had a phone call from an article regarding our community service that was run in last Sunday's paper. Our mortgage rep is quite busy and buyers are ready to start taking the steps to buy a home.
- El Paso County—Our Colorado Springs office is reporting steady sales and showing activity. We had our first VA listing cancellation due to the new government guarantee on VA loans. I suspect there will be a few more this week. Commercial financing is extremely tight and guidelines need to be checked daily. Work has stopped on the new mall at Highway 83 and Voyager due to construction financing changes.
- Larimer County—Inventory is increasing throughout Larimer County as the prime selling season inches closer. However, the market remains very price sensitive—so those sellers with super clean homes and terrific curb appeal will continue to have a leg-up on the competition. Many buyers are looking at foreclosures and short sales but due to substantial waiting periods for responses from banks, many don't have time to wait. With the change to daylight savings, we're seeing an increase in showings weekdays as buyers are able to view properties after work.
- North Metro—We have seen a big increase in activity in March so far. The lower-end market is very hot right now with multiple offers common. We are seeing increases in sales volume overall.
- Parker—Our Parker office is reporting that activity has increased and although we see more new listings on the market, the inventory did not go up because the sales activity is steady as well. Traffic through open houses was very high over the last weekend and the call volume on our listings has increased as well as an increase in showings. Sellers are now better educated through our Agents and are power pricing their homes to create more energy in the buyer pool. They also react faster to changes in the market.
- Southeast Metro—Brokers are very busy writing offers! In some cases, brokers are writing at least three offers before going under contract due to multiple offer situations. Showing activity continues to increase as we are now consistently setting over 500 showings a week. We are also seeing an upswing in traffic at our Previews properties, too.
- West Lakewood—Our West Lakewood office is reporting that open houses are very active. We had 19 groups at one home and 23 at another. It appears that many of the buyers are relocating or want to relocate from other parts of the country. Most Agents are working with from one to five sellers who are getting ready to place their homes on the market in April.
With spring break ending and the weekend weather outlook to be gorgeous, look for the first of the spring garage sales as well as lots of great homes holding open houses! For a schedule of open houses, go to www.OpenHouse.com or www.ColoradoHomes.com. Spring has sprung!
Until next week,
Make it a great one,
Chris Mygatt
President and Chief Operating Officer
Coldwell Banker Residential Brokerage Colorado
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