Following last week’s breaking housing news which revealed that based on the Standard & Poor’s/Case-Schiller 20-city index, home prices in May posted their first monthly increase since the summer of 2006.
The news followed reports showing sales of newly built and existing homes rose in June for the third consecutive month. New home construction, though still weak, is the best it has been since the fall.
Well this week the good news continued. The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 31, 2009 showcasing an increase in mortgage loan application volume of 4.4 percent from the week earlier. On an adjusted basis, the Index increased 4.1 percent compared with the previous week and 18 percent compared with the same week one year earlier.
The Refinance Index increased 7.2 percent from the previous week. The Index has climbed about 35 percent above its recent low at the end of June. The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier.
Also interesting to note is this week’s release of the National Association of Realtors’ Pending Home Sales Index in which it revealed an increase of 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003. The jump was much higher than expected with a consensus of industry experts put together by Briefing.com forecasting an increase of just 0.7%.
NAR’s Chief Economist Lawrence Yun had this to say, “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines.” It seems all of these incentives, much like the Cash for Clunkers program, is finally pushing people off of the fence.
Now, let’s take a look at this week in real estate:
- Boulder/Longmont—The Boulder office reported new listings in the Boulder County market showed a decrease of over 18% last week, the first significant decline in a month. Meanwhile, new under contracts were up by over 16% so both numbers are moving in the right direction. Showings in the county also increased by whopping 35% last week. Side note about July - County wide, there were 739 price reductions in July. Longmont reported showings are down for the third week in a row. Homes going under contract are steady and new listings came up more than double week over week. The good news about the general Denver area is big. We are anticipating that the price of homes in general Longmont area will follow the Denver increase. Homes in the $300,000 to $400,000 were shown more this last week. Maybe the start of a good trend for the move-up market inventory. Appraisals are still a problem for the buying process. Agents are watching whole purchasing process with great detail to make sure the glitches are smoothed out for everyone.
- Evergreen/Conifer—Evergreen reported five listings went under contract during the past week. Two were vacant land parcels in Idaho Springs/Dumont. Land sales have been quite slow over the past year and these contracts represent the first land sales in six months. One contract, a single family home in Arvada went under contract on the first day after only one showing. Two contracts were single family homes in Conifer, one with three offers and one after only 31 DOM. Five buyers represented by our Agents also went under contract for the week; one buyer was the first showing of the property and submitted an offer which was accepted. We had 86 showings during the week and a total of 378 for the month. Five new listings during the week and a total of 17 for the month of July. Conifer reported we had three new listings during the week totaling $1,300,000. Two listings went under contract one of which was a single family home in Bailey with multiple offers which went under contract at higher than list price. Two buyers put under contract for single family homes in Conifer & Pine. Showing activity decreased to 31 during the week.
- Denver Central - This past week Denver was ranked #1 in the country for biking and hiking trails by the National Park & Rec Association. Forbes magazine recently ranked Denver as the #1 place to buy real estate and #13 in coolness factor in the country. The Denver real estate market continues to get positive national and local press on a weekly basis. We are very encouraged and excited about the future of real estate in Denver. We continue to have substantial drops in housing inventory in the Denver area and we have seen an increase in the number of existing homes sold. The lower-end market has certainly shifted to a sellers market with properties moving quickly. Properties that are priced aggressively are seeing multiple offer situations. Many properties in the lower end go under contract within days of being put on the market. The high-end market continues to be tough but we're seeing improvement.
- Devonshire— Activity is good here at Devonshire. We're working hard on getting our sellers to allow us to do open houses as we know that there are now more buyers out there looking for homes. We've had a very busy July with many homes going under contract. As buyers are missing homes that have sold to others because they waited, we see more activity. Why would buyers who are really serious about moving wait & miss the perfect home? We think that this is why the open houses are getting more traffic. Lending restrictions are creating delays in some closings - all the more crucial for the public to be working with full time, knowledgeable professionals. We're looking forward to a busy August with lots of homes coming on the market & many buyers finding that perfect home.
- Douglas County—Our Southwest Metro office reports our Agents were very, very busy this past week listing homes. We are seeing sellers ready to list their properties especially after local news stations were reporting an increase in the price of homes with some areas showing the same price as in 2003. Our showing activity was very good this past weekend. Open houses had great traffic and our Agents received some solid leads. We are seeing some buyers ready to move but there are some that are still waiting for the "deal.” We feel good about the market at this time & hopefully it will continue to turn upward.
- El Paso County—Colorado Springs reports sales activity was steady and showings increased slightly last week. We have received a good number of relocation leads, both buyers and listings. As a result, our listing inventory has increased and we expect it to continue increasing slightly for the next few weeks. Banks remain slow on negotiating short sales.
- Larimer County—Our Fort Collins/Loveland office reports the market is very steady right now in Northern Colorado. We are seeing consistent numbers across the board the last two weeks in showings, closings, under contracts and new listings coming on to the market. Investors who are cash heavy are taking advantage of the flat market and purchasing properties for the same price they could have four years ago. This trend will likely continue the next six to nine months with the low interest rates and good deals to be had. One Agent recently put her clients under contract for a fix and flip property that is protected to make approximately $40,000 once repairs and upgrades are made. There are still good deals to be had if you know where to look.
- North Metro—The office continues to be very active and aggressive as we all continue to meet the challenge of the dynamic market. We see strong listing opportunities and our month end activity reflects signs of a stronger market. Sales in the office are steady despite the challenge of short sale, REO and multiple offer transactions. Our average sale price indicates that we must continue to deal with these issues and our Agents continued success is what separates them from our competitors. Good solid indicators that the market's improving are found in the mood of the customers that seems to be changing from total retreat to cautious optimism.
- Parker—Sales activity has increased which caused our listing inventory to decline. It looks like we are experiencing a little spike towards the end of summer. News came out that the moratorium on Bank-Owned properties has been extended until November 30th, which will help our sellers over the next four months.
- Southeast Metro—The SE Metro office reports showings have increased and are back to over 500 per week. Open house activity is strong and the luxury market is experiencing a definite increase in both broker viewings and buyer traffic. Inventory is decreasing and buyers are having a difficult time finding homes in desirable neighborhoods.
- West Lakewood—We had multiple offers on almost everything below $250,000. Sellers who take the time to stage their homes are having amazing results.
My overall synopsis of the market this week is much like it has been over the last several. Low-end sales have been the strongest segment of the market, an indication that the first-time homebuyers tax credit is contributing to the rise. The clock, however, is ticking on this credit and it may have buyers stepping up their shopping to get their purchases in under the wire. Because it may take as long as two months to close on a home after signing a contract, first time home buyers must act fairly soon to take advantage of the credit. To qualify, they must close on the sale by November 30.
Until next week,
Make it a great one,
Chris Mygatt
Coldwell Banker Residential Brokerage Colorado
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