Friday, April 27, 2012

How It's Playing Out in Different Markets

Denver has one of the lowest months of inventory in the country - which means low supply, high demand - which means HOT market

Home Buyers Stunned that Bid Wars are Back

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages.
"It's a little surprising because we thought bidding wars were done with," said Andy Aley, who is looking to buy his first home in Seattle's Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
Competitive bidding in the current environment isn't producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.
An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.
"We very much believe we've hit bottom," said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.
The Wall Street Journal's quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months' supply. In March, there was a 6.3-months' supply.

Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.

Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York's Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.

Increased competition is frustrating buyers and their agents. "We're writing a record number of offers, but we're not seeing a record number of closings and that's because it's so competitive," said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.

Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for "Buddy," a white toy poodle.

Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.

In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation's biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.

Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.

Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren't concerned. "There's an enormous appetite for foreclosures. Release the inventory. It will sell," said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.
Source: Wall Street Journal

Tuesday, April 24, 2012

Denver #1 "Most Improved Market"

(Money Magazine) -- Given everything they knew about the lackluster housing market, Meghann and Cort Battles didn't expect much when they listed their four-bedroom home in Centennial, a Denver suburb, for sale in January. So they were taken aback by the onslaught of interest.
Meghann, at home on maternity leave with their two sons, juggled 32 showings in the first month. "It's so exhausting trying to find somewhere to go for an hour two or three times a day," she says. The Battles even installed a special front-door handle to text them when buyers enter and exit so that they can return as soon as possible. "It's just crazy," she says.
Wait, isn't the real estate market still supposed to stink after five straight years of falling prices?
Turns out that while analysts debate when the market will hit bottom, for a surprising number of cities the turnaround has already begun. In December, prices rose in 109 of the 384 metro areas tracked by the data firm CoreLogic. Scrub out foreclosures, and that figure climbs to 169.
If you think that recovery means a return to the boom's double-digit price increases, forget about it. "The market won't suddenly snap back," warns CoreLogic economist Sam Khater, who has studied past housing busts.
And for harder-hit areas such as central Florida and the Rustbelt, improving may simply mean things are less bad than they were two years ago.
No matter where you live, though -- or where you want to live next -- the strategies you employ to sell your home must change to reflect the realities of what's now a healing market.
To see how that change might play out, MONEY visited Denver, ranked by CoreLogic as the most improved of the nation's 100 largest markets.
Prices in the Mile High City and its suburbs, which didn't experience the extreme booms or busts of Phoenix or Las Vegas, rose in December. Foreclosures are ebbing. And homes are selling about 19% faster than they were a year ago.
Our tour of this recovering market reveals that the rebound is likely to creep rather than surge ahead. Yet if you know how to price and market your home properly -- which this story will lay out -- you can finally list your home with confidence that it can sell reasonably quickly and close to your asking price.
See if your town is near recovery.
Many economists predict that 2012 will be the last year overall housing prices decline, as the final wave of foreclosures from the slump hits the market. After that, prices should inch up: 2% in 2013, 3% in 2014, according to a consensus of analysts tallied by Moody's
Why? Against a backdrop of low mortgage rates, employment has improved slightly, and home prices have fallen long and hard enough that buyers are beginning to realize that they won't necessarily lose their shirts by purchasing real estate. To see if your neighborhood is on the verge of a rebound, you have to look for the signs.
For instance, is local employment on the upswing?
That's a critical factor for a region to get itself on the path to recovery. The improving jobs picture has led to shrinking housing stock across the country, as enough investors and bargain hunters have come on the scene to unclog the glut of foreclosures that's been blocking a recovery.
Also, "builders are not putting up very many new homes," says Celia Chen, who follows housing for
In Denver the improved job market has led not only to falling inventory but also a boost in buying activity and an uptick in prices. During the lean years Denver, like many other regions, was hit by both falling prices and rising foreclosures, though the suburbs far from the city center -- where construction of new homes exploded -- bore a disproportionate amount of pain.
Today, however, distressed properties make up around 30% of the Denver metro market compared with 45% at the trough, says local real estate analyst Gary Bauer. And the number of homes on the market has fallen to lows not seen since 2000.
Understand the buyer's psychology.
Sellers aren't the only ones who've been affected by the bust. For years buyers were scared to death of overpaying for a home. They're less so now, but they've grown accustomed to thinking that they'll score deals, so they tend to act slowly, and typically start bidding around 10% to 15% below list price.
Denver real estate agent Ron Buss says he sees this all the time with clients such as Aaron Blankenship, who lost 10% when he sold his home in Rochester, N.Y., last year to move to Denver for a new job with Molson Coors.
Blankenship, 37, is biding his time renting as he looks for a new home. "I'm much more risk-conscious," he says. "It's a challenge figuring out how much we really want to spend and how much we really want to be tied to our home."

Friday, April 20, 2012

Denver #2 Hottest Market in U.S.

DENVER (CBS4)- Denver may be the exception to the downturn in the real estate market. A recent report puts the Mile High City at number two in the nation for the short length of time a house stays on the market.
The news is good for sellers but buyers can find the quick turnaround frustrating.
Homeowner Holly Wilcher sold her home in less than a month.
“We had an offer in seven days,” said Wilcher.
She received three offers on her house, all of which were more than what she paid for it a year ago.
That’s great news for sellers but buyers say there’s no time to wait if they find a house they like.

“My real estate called their agent and he said they already had an offer so I had to put in an offer really fast and make in an aggressive offer because that would be contingent upon the other offer,” said potential home buyer Josh, who didn’t want to give his last name.
Scott Peterson is a real estate agent and hasn’t seen the market this tight since before the housing bubble burst.
“I’ve been in real estate for six years and I’ve never seen anything like it,” said Peterson. “The lack of inventory and large demand is really what’s driving up prices.”
Many of his recent listings have sold in two to seven days. The price range selling well can fit into a variety of income levels.
“I’ve got listings anywhere from $250,000 all the way up to $625,000.”
“If there’s something you like you’ve got to jump on it.”

Advice For Buyers:
  • Stalk the neighborhood real estate and drive through daily.
  • Work with an agent who is intimately familiar with the neighborhood where you want to buy.
  • If the house you like is better than others you’ve seen, consider making a full-price offer or even slightly above.
  • Have your real estate agent call the listing agent to learn more about competition from other buyers.
Advice For Sellers:
  • If you’re considering selling, list it immediately.
  • Price it on the higher end but don’t get greedy.
  • Work with an agent who knows and sells in your neighborhood.
  • Know your competition and make the presentation of your home better.

(I told you!  -Jonathan)

Thursday, April 19, 2012

Denver Market a Seller's Paradise

How fast is the market moving? A new report shows that Denver is No. 2 in the nation for the shortest time a home stays listed — 33 days — far below the national median time of 89 days. (There are no less than 1,753 houses plus another 608 townhomes and condos under contract right now in Denver city alone!)
New advice from the trenches on buying a home: Look early. Think fast. Hone your quick-draw skills with the checkbook.
Metro Denver's real estate market, not along ago a buyer's domain, suddenly has shifted to a seller's paradise, at least in some neighborhoods and price ranges.
Realtors' offices are rife with fresh anecdotes of sellers happily cherry-picking from multiple offers — some of them above asking price.
Until recently, prospective buyer Patty Kupfer had viewed shopping for a home as a weekend diversion. You know, tell your broker that you're available, say, from 2 to 4 p.m. on Saturday.
"There's no such thing anymore as a weekend home tour," Kupfer said this week. "Because if you wait 'til the weekend, nothing's going to be there. If you're just looking casually, you're not really in the market."
Kupfer, managing director of a non-profit immigration reform organization, said she has adjusted her approach in the face of vigorous competition from other buyers.
"Every house I've looked at has gone under contract within 48 hours," she said. "This has forced me to be more serious about it. The very next house that seems like a good fit, we're going to visit it that very day" that it's first listed.
In recent months, buyer demand has surged and the number of homes for sale in metro Denver has dropped sharply.
Unsold homes on the market totalled 10,325 at the end of March, a 42 percent drop from March of 2011.
The result is that for some neighborhoods and some price ranges, available homes are in short supply and selling fast.
In particularly high demand are homes priced from $250,000 to $400,000 and in central Denver neighborhoods such as Park Hill, Congress Park, Curtis Park, Mayfair and Highlands, said Michelle Ackerman, Denver-area manager and broker for Redfin.
Sellers of homes listed higher than $500,000 generally aren't enjoying the market heat.
What can be a frustrating endeavor for buyers is a pleasant relief for sellers.
-Source: The Denver Post Steve Raabe

Wednesday, April 18, 2012

HQ Relocation Means Jobs in Broomfield

The Sisters of Charity of Leavenworth Health System, owners of Exempla Good Samaritan Medical Center in Lafayette, plans to move its headquarters from Kansas to Denver and add offices and jobs in Broomfield.

About 150 workers will be headquartered in the Diamond Hill office complex near Speer Boulevard and Interstate 25 in Denver, said Bo Martinez, director of economic development for the City and County of Broomfield.

Another 500 professional and associate-level people will be located at the Oracle Campus at 500 Eldorado Blvd. in Broomfield, he said.

"It's very good news," Martinez said. "We feel this is a big plus to the economic diversification, not only to our city, but to the region and to Interlocken."

An SCL Health System press release issued Monday said the $2.7 billion hospital network will bring 750 new jobs to the region. A press conference is set for 1:30 p.m. Wednesday, March 21, at the state Capitol in Denver.

SCL spokeswoman Christine Woolsey said Monday afternoon that she could not share anything more about the announcement until the press conference.

The timing - when SCL Health System employees will move from Kansas to Broomfield and Denver - as well as how many of them are scheduled to move, is expected to be announced on Wednesday, Martinez said.

Broomfield mayor Patrick Quinn characterized Broomfield's role in the move as, "a big deal."

"This will mean up to 500 jobs over time," he said.

Quinn, along with Gov. John Hickenlooper, Denver mayor Michael B. Hancock and SCL Health System president and chief executive Michael Slubowski will attend the press conference.

SCL Health Systems said in the release that by consolidating its administrative services in the greater Denver area, it will be better positioned to provide support services to the multiple communities it serves in four states.

About 52 percent of SCL Health System's revenue is generated by four hospitals in Colorado, including Exempla Good Samaritan, Exempla Saint Joseph in Denver, Exempla Lutheran Medical Center in Wheat Ridge and Saint. Mary's Regional Medical Center in Grand Junction. 

Denver is #3 for relocating families in 2011

Denver has emerged in the past year as a top draw for relocating families, U-Haul International Inc. reported Friday.
The company released the results of its annual National Migration Trend Report, showing which cities are having the biggest influx of new residents. The report considers cities where more than 5,000 families moved to during 2011.
Denver ranked third, with an 8.5 percent increase in the number of families moving in, U-Haul said.
U-Haul based its findings on more than 1.6 million one-way truck rentals in 2011.
Nashville, Tenn., was the top city for relocating families with a 10.39 percent increase, followed by Oakland, Calif., at 10.29 percent.

Thursday, April 5, 2012

Dissecting the Denver Market: Why is the Market So Hot?

Why is buying in Denver so hot right now? A brief summary of top tens and attention Denver is getting, then some statistics:

  • Denver was #3 in the country for job growth in 2011
  • Denver was #3 for relocating families in 2011
  • House prices continue to go up in Denver-Metro
  • High desirability (mountains, weather, life) AND high affordability(much cheaper than west competitors), which is a rare combination. 
  • Interest rates are very low
  • It's cheaper to buy then to rent right now

And one more thing: you gotta know your Months of Inventory. Months of Inventory are an excellent and accurate way to measure market action - whether it's a buyers or sellers market.  Months of inventory simply means the time it takes for all the houses on the market right now to be sold and gone at the current rate they are selling for.

For example, if there are 10 houses on the market in a particular neighborhood, and there were 10 sales in the last month in that neighborhood, the months of inventory would be 1 month - it would take about one month to sell all 10 of those homes at the current selling rate. And that would be a very hot market.

Here are the stats for months of inventory in the Denver-Metro area. As you can see, so much depends on PRICE RANGE:

Price               Months of Inventory           Price Change in the Last 12 Months        Market Type
$0-85k                        4                                                       +19%                                    Sellers - HOT!
$85-135k                    3.6                                                    +10%                                    Sellers - HOT!
$136-210k                  4.1                                                    +6%                                      Sellers - Great
$210-315k                  4.9                                                    +1%                                      Sellers - Good
$315-460k                  7                                                       -7%                                       Buyers - Slower      
$460+                         11                                                     -13%                                     Buyer - Slow


For Sellers: 

  • It is a PERFECT time to sell anything below $210,000 - prices are going up in these ranges, demand is high, and supply is low. Buyers will usually compete against each other and pay higher prices. 
  • It is still a good time to sell anything below $315,000, since supply is down and demand is high.
  • You can still sell anything under $460,000, but it may take a bit longer.

For Buyers: 

  • It is a PERFECT time to buy anything above $460,000 - supply is a-plenty! But demand is really low, and things aren't moving that fast. Sellers are very willing to accept low offers. 
  • It is still a buyer's market between $315,000 and $460,000, and prices are a bit down. Sellers would be more willing to accept a lower offer. 
  • It is tougher to buy anything below $210,000, since competition and demand are high, and supply is low.