Figures released today by the National Association of Realtors are a good indicator that the market continues to improve – though at very modest levels. I’ve been saying for months that the market is, in this post recessionary period, improving though will continue to do so with minor bumps in the road along the way.
Last month’s lower than expected sales figures were just that, a bump in the road. We saw the slip partly due to seasonality and partly due to the expiration of the tax credit.
Now, one month later, we’re seeing numbers rise. According to the National Association of Realtors’ Pending Home Sales Index, pending home sales rose 5.2 percent to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June.
According to Lawrence Yun, NAR chief economist, “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Now of course this is a national perspective and we all know that real estate is local. Locally we’re seeing some pockets of strength. Some of the most sought after neighborhoods continue to see strong sales while those that may be challenged due to proximity to jobs and commerce, are seeing bigger lags.
Overall what we’re seeing most is buyers want to take advantage of the low interest rates and realize that thanks to those rates, they have particularly higher purchasing power right now. From a move-up buyer perspective, we’re seeing a lot of sellers consider selling right now. Yes, they realize they may take a hit from the flurry days of the early part of the decade but when they compare it to what they can purchase on the move-up side and what their monthly payment will be, they truly see a benefit. These indicators are really helping to drive our market right now.
The bottom line is, we are on a good recovery path. And an interesting report this week underscores that. Bankrate revealed numbers that provided a good look at consumer confidence. An overwhelming 90 percent of homeowners say they don’t regret buying their current home. That is even in the face of stagnant – or sliding – home prices home owners have suffered. It is comforting to see this number because regardless of where market conditions currently are, consumers continue to understand that real estate is a good, long term investment.
Now, let’s hear what our local offices have to say:
- Boulder—New listings are up almost 12%, but sales activity is down almost 10%. It looks as though there is an excess of properties and not as many buyers for them. This is very noticeable in the amount of showings. Showings are down over 20%. This means that the market is saturated with homes for sale but the demand for these properties has dropped off in this period. The showings reflect the sales activity in this case.
- Colorado Springs—Sales have been increasing for the past few weeks as buyers are taking advantage of low interest rates (under 5%). Listings have also been increasing as sellers know that if they can get their homes sold they can become buyers & take advantage of low rates & move up to a larger home. Overall, showings are down about 35% from last week.
- Conifer—There were three new listings in the Conifer office for the month of August. We also had three listings go under contract in August with five buyers put under contract. A total of 117 showings and 5 previews for the month reflects a 60% improvement from the prior month. Our showing activity is primarily in the mid-$200,000 to $400,000 range.
- Denver Central—Inventory continues to increase in the Denver Metro area and is just below 2008 levels but has increased 20% over 2009. Inventory is still well below 2007 levels when it was at it’s peak. We continue to see home appreciation in the Denver metro area but that could be attributable to the recent tax credit. We could see appreciation tail off in the coming months with inventory increases. Under contracts seem to have stabilized after the drop that we had after the tax credit deadline. The market is very neighborhood specific so it is important to be working with a professional that can educate & give you the proper advice to make the correct real estate decisions. Over 50% of the home sales in the Denver metro area continue to be under $250,000. If you’re looking to sell a home that is priced under $300,000, this is a great time. We’re seeing improvement in the higher-end market & sales have increased. This is definitely a great market to move up to a higher priced home.
- Denver West—Denver West has enjoyed closings in the $600,000, the $700,000 and even the $800,000 sales point. Many buyers are motivated & are taking advantage of these low interest rates. We’re experiencing many sellers buying up, yet renting out their current home since they can’t achieve the price they want. We’re also seeing a high desire to rent from former homeowners who lost their homes through short sales & foreclosures.
- Devonshire—Here we are at the end of summer & it seems that many people are out enjoying the last days before all of the fall activities get into full gear. We can feel the angst in our buyers as they are struggling with proceeding to find that new home and take advantage of the wonderful low interest rates. Inventory in some price points is slim. It seems that many buyers have decided to hold on until they feel that the economy is a little more stable. A bright light seems to be in the upper price points where we have had more activity and actual closings than in the last few months. We had the highest sale in the metro office in 2010, in the Devonshire office & we’re proud of Kelly Westergren for representing the buyer on that transaction. Fall is historically a good time of year for us and we’re looking forward with excitement to see all the successes that fall will bring.
- Evergreen—We had a total of 19 new listings in August, with 9 listings under contract and 7 buyers put under contract. Both are very similar to our July totals. There was a total of 320 showings and 24 previews in the month which is a 30% improvement over July activity but still 7% below levels from Aug 2009. Selling activity was predominately in the mid-$300,000 to $500,000 range.
- Longmont—Showings are holding very steady. Homes being shown are still in a wide range of price points. Move up buyers are in our market looking. Financing is still an issue for buyers. Self employed buyers are having difficulties securing loans. New homes in all price ranges are coming on the market & sellers are realizing that keeping their homes on the market longer will be necessary.
- North Metro—Fall is in the air, the kids are back in school and now is the perfect time to purchase a home. We are seeing increased activity at Open Houses and in the number of floor calls coming to our office. The average sales price has increased to $275,000 for homes sold. We have 73 new homes listed this month as compared to 70 for last month and we’ve helped buyers and sellers close on 74 properties.
- Parker—Our listings and showings are down from the past week as families return from vacations. Our market is still strong with buyers as the low interest rates (under 5%) make it likely that this trend will continue for a while.
- Southwest Metro—Showings have been steady but they’re still significantly down from June of this year as well as this time last year. The buyer pool is waiting and we do not understand what they are waiting for as the interest rates are so great. We’re seeing good activity in homes over $300,000 & less activity in those below that amount. The first time buyers are not moving but are waiting. Sellers are still ready to list their properties but are not realistic as to the value. Everyone seems to be in a holding pattern waiting to see what is going to happen. We’re sending out newsletters showing that this is a great time to finance a home. Open houses have been good & a couple of agents did have several good buyer leads in the past two weeks.