Those were the words last week from Fannie Mae Chief Executive Officer Michael Williams. The CEO went on to say, “Anyone looking objectively at the economy and the housing market sees hope.”
Another good solid indicator of what I’ve been saying in my weekly updates. The U.S. housing market still has a long road ahead but we are making some definite moves towards a housing recovery. So what’s the challenge? Well for starters, rising unemployment numbers aren’t helping. The United States Department of Labor reported in its September 4 Economic Situation Summary that the number of unemployed persons increased by 466,000 to 14.9 million and the unemployment rate rose by 0.3 percentage point to 9.7%. Just to give you an idea, since the recession began in December 2007, the number of unemployed persons has risen by 7.4 million, and the unemployment rate has grown by 4.8 percentage points.
We also need to couple that with the challenges in the mortgage industry. Bloomberg reported, “The mortgage market is still dependent on government-affiliated programs, with private banks providing just 10 percent of loan liquidity, down from about 60 percent in 2006. Fannie Mae and Freddie Mac are responsible for about 70 percent of all new mortgages, while the Federal Housing Administration accounts for about 20 percent.”
Before we can be truly reformed, we need to get into a position where there is more of a balance between private bank loans and Fannie Mae and Freddie Mac loans. In all actuality, we probably won’t see that for some time.
Having said that, U.S. mortgage applications surged last week with demanding rising to its highest level since late-May as consumers sought to take advantage of the lowest interest rates in months, according to Reuters.
The Reuters article reported, “While home refinancing loans dominated demand, the appetite for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January. The overall trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.”
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans, for the week ended September 4 increased 17.0 percent to 648.3, the highest level since the week ended May 29.
These are all very positive indicators that showcase that we are on the right track…it’ll probably be a slow track…but we’re on the right one.
Now let’s take a look at this week in real estate—please excuse the light reporting week—many of us are Riding the Range in support of Coldwell Banker’s Community Fund!
- Boulder/Longmont—The Boulder office reported only minor changes in the Boulder County market over the past week. New listings were down a little (about 5%), under contracts and closed down a little (about 6%), probably due to end of month closings in August , more than a market shift. Showings for our office down 12% for the week, well within normal weekly fluctuations. The week's good news is for the year through August our listings have sold at 98.35% of asking price versus 96.34% for the MLS average. Since our average price for that period was $435,000, sellers in Boulder County put $8,734 more in their pockets when they listed with us!
- Evergreen/Conifer—No information reported.
- Denver Central – No information reported.
- Devonshire— No information reported.
- Douglas County—Our Southwest Metro office reports s showings were down this past week. We did have several successful open houses and we had several listings that went under contract within three days. Agents are busy with buyers and sellers. One of our Agents had three listings go under contract in one week and we are seeing listings moving. The majority of the buyers are looking at homes $300,000 and less and we are seeing buyers ready to take advantage of the $8000 credit before the deadline.
- El Paso County—Colorado Springs reports activity is still very steady with showings increasing only slightly. First time buyers are getting more serious since they have to close before Nov. 30th in order to take advantage of the tax credit. We're also watching the possibility of changes in the tax credit deadline and terms as well as the lifting of the moratorium on bank owned properties.
- Larimer County—The Fort Collins/Loveland offices reported showings are down pretty significantly and it looks as though there are not a lot of homes coming onto the market currently. Recent stats from Weld & Larimer counties report that over 80% of the year to date home sales are below the $300,000 price point. This lower price point allows for excellent rates on FHA financing with as little as 3.5% down & many 1st time home buyers are taking advantage of these great rates. The super hot price point in Fort Collins & Loveland are homes priced around $200,000. We are seeing homes in good condition and in near this price selling relatively quickly and many are selling at list price with competing offers.
- North Metro—No information reported.
- Parker— After a very active summer, we are now seeing a decline in activity on the sales and showings as well as new listings coming on the market. Great effort is put into the initiative to extend and expand the tax credit for home buyers.
- Southeast Metro—As we move into the fall, business is steady and we have seen an increase in the number of properties selling. Our average number of showings before a listing goes under contract has dropped from 26 to 22. This is a great indicator that there are serious buyers out there! We're seeing fierce competition for homes under $225,000, with many selling above list price. Luxury homes are seeing a slight increase in traffic as 10% of our Previews homes are currently under contract. We'll close over 140 transactions this month and are confident about a strong 4th quarter.
- West Lakewood—No information reported.
I did want to let you all know that I will be taking next week off of Weekly Market Watch but I will return the following week with another robust edition.
Until then,
Chris Mygatt
Coldwell Banker Residential Brokerage Colorado
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