This week there were some exciting change of events going on with the government. Realogy (Coldwell Banker Residential Brokerage’s parent company) President Richard Smith met with legislators regarding a positive development for the real estate industry. Specifically, the Business Roundtable (an association of chief executive officers of leading U.S. corporations)— of which Richard is the chair—issued a set of recommendations for the White House and Congress that are aimed at jump starting the housing market in order to stimulate a broader economic recovery.
The Business Roundtable’s recommendations are as follows:
· Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
· Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
· Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
· Make permanent the current temporary conforming loan limits; and
· Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
We believe targeted, demand-side solutions—such as the ones Business Roundtable is recommending—will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole. To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here. To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here.
Please understand that the legislative process is often a long and winding road that is hard to predict, but at some point in the future, we expect to call on you to make your voices heard in support of any new legislation in Congress that would advance these recommendations. We will communicate with you as these legislative opportunities occur—but for now, just know that we appreciate your support and are proud to be part of this initiative.
In other news this week, RealtyTrac released its foreclosure findings with positive news that foreclosure filings dipped 6% in May compared with April. But the news wasn’t all positive as the number is still 18% above this time last year. Essentially one in ever 398 homes receive a foreclosure filing last month.
Here in Colorado, the picture is a bit brighter than the nation as a whole. We are ranked No. 8 out of 50 states in foreclosure filings with 4,876 total filings or one in ever 436 households. Our numbers, however, are on the decline with a decline from April 2009 to May 2009 earning an 11.3% drop and from May 2008 t o May 2009 earning a 15% decline. For a complete look at the USA Today story that ran on the figures, click here: http://www.usatoday.com/money/economy/housing/2009-06-10-may-home-foreclosures_N.htm#chart.
Now let’s take a look at this week in real estate:
- Boulder/Longmont—Our Boulder office reports after pausing to take a break during the last week of May, both sales and listings jumped by over 20% in the Boulder County market last week. This was fueled by tremendous activity in the under $225,000 price range. Numerous Agents reported having to write several offers for first time buyers because of multiple offer situations. Getting appraisals done on time still remains a problem. Inventory on lower priced homes continues to shrink dramatically even with the uptick in listings overall. The Longmont office reported showings increased 13% week over week. It was a steady increase with showings up each day of the week. Part of the buyer pool is made up of financially prudent individuals who did not over extend themselves during the "give-away" period. They are now seeing the selling of existing home and the purchase of the new home as one transaction. They are seeing that the percentage of loss is outweighed by the percentage of gain with the new purchase. Appraisals are a big hurdle in any transaction right now. The are coming in very conservative.
- Evergreen/Conifer—Our Evergreen office reports we had a total of six new listings for the week. Only one listing went under contract. Also, one buyer went under contract on new construction along the Hwy. 285 corridor. Property listed @ $799,000. Sales activity has slowed, which may be the normal seasonal slowdown from mid-May to mid-June. We had a total of 88 showings during the week; close to normal levels for peak season. The majority of activity in two different price points, $200,00 to $250,000 for first time buyers, investors and the $500,000 to $700,000 range. We had four new listings during the week totaling $1,200,000. Four listings went under contract including one short sale and one buyer went under contract. We had 33 showings for the week. The majority of the showings were in the $300,000 to $400,000 range, with good activity in the $400,000 to $500,000 range.
- Denver Central—For the fourth consecutive month we have seen an increase in the number of existing homes sold. In the month of May 42% of the homes sold went for less than $200,000 and 28% were in the $200,000 to $300,000 range. Inventory continues to drop and we had 20,734 unsold homes in the month of May 09 which is a drop of 21.3% compared to May 2008. First time home buyers are taking advantage of the $8,000 tax credit.
- Devonshire—Although the weather has not been the best, market activity is great. Showings are up and activity at some open houses indicates that buyers are out there! We had some visitors at open houses talking about the fact that they are looking at houses to decide if it is the right time to get their own homes on the market. We are seeing houses that are priced competitively going under contract quickly. Lenders are bogged down right now so it is taking a little longer to get to the closing table. Appraisals are slow to come in as the work load for appraisers is heavy. We are optimistic that we'll have a strong summer selling season.
- Douglas County—Our Southwest Metro office reported showings have really increased this past week. Our open houses were very successful. Several Agents picked up buyers and three potential listings. We had two Agents who converted their floor calls and wrote offers for them. We are seeing listings that are priced right receiving offers after only 1-3 days on the market. Agents are also reporting that there is an increased interest in the $8,000 credit. We are seeing properties over $400,000 not seeing as much activity as those below this price range. Our mortgage rep continues approving buyers which is a good sign. Agents are feeling that the market is starting to turn little by little.
- El Paso County—Colorado Springs reports our listings have slowed considerably but sales remain steady. The under $250,000 remains the hot market for buyers with an average time on market of less than 30 days. High end properties slowed the past month as did showings in the high end. Employment reports uneasy as several shopping centers have reported worst sales quarter ever. Agents have slowed their jumping around from office to office and board number of active agents continues to drop.
- Larimer County—Our Fort Collins/Loveland office reports showing activity is going through the roof! We had nearly 90 more showings this week than the prior week. Our listings going under contract nearly doubled from the previous week. Many sellers who have found themselves over priced have dramatically reduced their prices to reflect market value and this has begun drawing more buyers into the market. Interest rates are climbing and are above 5% and are approaching 5.5% very quickly. Most lenders think that we will hit 6% by the end of the summer. If you are looking to take advantage of the low, low rate you had better do it soon. I think the days of the low 5s and high 4s for interest rates are behind us. Plus, check out my reference below regarding Loveland!
- North Metro—No information reported.
- Parker—For the third month in a row, we see a trend that after it being very busy last week, the first week of the month slows down a little. However, after that, activity picks up right away and our sales and showings have increased by high numbers. Just like last week, we are seeing multiple offers and a bidding process on power priced listings in all price ranges.
- Southeast Metro—No information reported.
- West Lakewood—Our Agents are very busy listing and selling property. There are very few bank owned listings entering our inventory. Short sale listings are still quite predominate. It's obvious that consumers are gaining confidence.
Finally, I’d like to leave you with this great news. Loveland, CO was this week named one of the United States best places to live in 2009, based on U.S. News’ look at areas with strong economies, low living costs and plenty of fun things to do.
Here’s what the article had to say about Loveland:
Located just outside the breathtaking Rocky Mountain National Park, Loveland, Colo., is considered the "Gateway to the Rockies." But while it has 27 public parks and nearly 16 miles of recreation trails, it's Loveland's affection for man-made beauty that sets this community of 56,000 residents apart.
Thanks to its Art in Public Places program, more than 300 pieces of sculpture and two-dimensional works are on display throughout the community. And with a 2008 median home sale price of $186,000, the area's real estate market is relatively affordable.
Loveland has also achieved acclaim for its Valentine remailing program, in which 200,000 cards are sent to the city to receive a special cachet stamp. "We've got a waiting list of over 50 people that are waiting to be stampers," says Kathryn Roth of the Loveland Chamber of Commerce.
It’s just a great reminder of why we call this special place home.
I did want to let you all know that I will take a brief hiatus from Weekly Market Watch next week but will return the following week with another robust edition.
Until next week,
Make it a great one,
Chris Mygatt
Coldwell Banker Residential Brokerage Colorado
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