The most informative, educational, no-B.S. blog about Denver Market Trends and Denver Real Estate, by the Denver House Guy himself. Period.
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 Economy.com.
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 Economy.com.
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."