So, How’s the Market, May, 2010

All real estate data taken from Metrolist, Inc, on May 5, 2010.  Denver, Colorado.

“Did the Tax Credit Work to Increase Real Estate Sales?”

STAT ONE: Properties that are currently Under Contract are at a 5 year high.

April properties under contract on April 5th was 7484 and May 5th was 8592 or a gain of 1,108 units in 30 days.  There has not been an 1100+ gain in properties under contract in one month since we started tracking data.  Did the Tax Credit ramp up buyers to buy?  The figures do not lie, YES.

STAT TWO:    More properties closed in April of 2010 than the previous two years in April.  Sold data is a trailing indicator of a market turning around and Denver has now had two month in a row of beating the previous year.  Did the Tax Credit create more sales in the Spring of 2010. 

The Denver Market should see increases in sold data for the next several months over the previous years.  The increase in buyers pushed sales to higher levels than we have seen for several years.  Prices are rising in the Denver, specifically the price range from zero to $300,000 is seeing ½% to 1% increase per month for the first four months of 2010.  Has the Tax Credit made a significant impact on these numbers?  Yes!

STAT THREE: Inventories in the Denver Metro area are at historical low levels.  Usually single family and condo inventories grow in the spring of each year.  That is not happening in 2010.  With lower inventory prices will rise.

Inventory varies in price ranges.  For example there are currently 6035 single family and condos on the market between zero and $250,000 as of May 5, 2010.    There have been 5500 closed units from January 1, thru April 30th   for the same price point.  If we annualize the sold number, the yearly number of sales would be 21,153 in the price range zero to $250,000, which leaves a 3.42 month supply.  This is considered very low inventory and prices will continue to rise.

Conversely, there are 1376 single family and condos above 1 million dollars on the market today.  There have been 129 single family and condos close in the first 4 months of 2010.  When annualizing that number the number of million dollar properties would be 496 closed units or a 33.29 month supply of homes.  Even though upper price range homes are selling better than 2009, the amount of inventory above 1 million will hold prices to lower levels.  Did the Tax Credit for Move-up Buyer create a new buyer pool?  No.  It does not appear by the numbers that the $6500 dollar tax credit for existing homeowners made any dent in the upper end market.

STAT FOUR:  In March of 2010, 48.2% of all homes sold were to First Time Home Buyers.  This is the highest recorded number of first time buyers and April’s figures will more than likely exceed that record.  The Tax Credit did bring an abnormal amount of buyers into the market.

Current Homeowner purchasers made up 33.5% of the buyers in the market and the balance of buyers were investors who made up 18.3% of the marketplace in March.

The Tax Credit did create more buyers in March and April then the market would normally have seen.

STAT FIVE:    Real Estate Companies had record showings for the month of April, 2010. 

Total Company Daily Average

Week One 452 Daily Average

Week Two 434 Daily Average

Week Three 435 Daily Average

Week Four 416  Daily Average

Week Five   357 Daily Average

Total for Month 12129 showing on 1693 listings

These showing levels are higher than most summer months!  A normal spring month would have 8000 to 9000 showing on 1700 listings.  There were definitely more buyers in the market in April than previous months.

CONCLUSIONS:

What does this mean for the balance of the 2010 Denver Real Estate Market?  The Tax credit created an artificial crunch on real estate, especially in the lower price ranges.  The number of available buyers pushed their buying decision earlier than seasonal trends would suggest and although closing for May and June will exceed previous years, the true litmus test on the solidity of the real estate market will be based on what happenings to showing the next two months and the number of sales in June, July and August.

Interest rates, at historical lows will creep up later in 2010 causing some buyers to potential not make a buying decision or asking sellers to compensate the increased monthly payment with either points or less of a price.  For example, a 5% PI payment on a $250,000 loan amount is $1,336 dollars per month.  At 6% that payment goes to $1491 or $155 dollar higher house payment.  Interest rates do alter the ability for buyers to buy.

Even though the Tax Credit has subsided, the obvious observation would be to suggest that the market will slow down, even with low interest rates.  However, as rates start to rise, watch for another wave of buyers wanting to enter the market so they do not miss the window of opportunity.

2010 has been a year of the start of the recovery.  There is no question the Tax Credit created an artificial growth that is now over, but Denver will definitely outperform previous years in the number of homes closed, which will hold the inventory lower helping prices to rise.  It’s a good time to be buying.

What should sellers do in today’s market?

·     Consider an Extension of the Tax Credit on your home by offering $8,000 worth of points or concessions.

·     Change the dynamics of the inventory in your price range by entering the market as the first home in your neighborhood on the pricing ladder.

·     Be the best conditioned property in all price ranges.  Foreclosed properties will be priced better, but will never be in better condition. 

What should buyers do in today’s market?

·     Enter the market now while rates are ridiculously low.

·     Ask for seller concession in upper price ranges to make the transaction more attractive to you.

·     When buying a foreclosed property ask your real estate professional about the FHA Rehabilitation Loan program

So, How’s the Market, April, 2010

All real estate data taken from Metrolist, Inc, on April 5, 2010.  Denver, Colorado.

“When do you know when the real estate market has hit bottom?”

 FACT ONE:  The housing inventory for single family and condominiums remains low.

Single Family vs. Condominium inventory shows some interesting statistics this month.  Single family homes decreased 22.9% from 2006 to 2010.  In looking at the condominium reduction of inventory, condo’s decreased 33.6% from 2006 to today.  Condos will be the next product type to start to see an appreciable gain in 2010 because of this decrease or lack of inventory available to buyers.

Single Family Inventory above $1 million for April of each year is decreasing but if you look at 2006 to 2010 there has been an increase of total inventory.  Comparing the upper end market with the entire market inventory shows that the luxury market is still over burdened with inventory.

To predict the future of the upper end market compared to the balance of the inventory below $1 million dollars, let’s compare months supply.  For properties below $1 million there are 14,886 single family homes on the market as of April 5, 2010.  For the first three months of 2010 there has been 6188 single family homes closed in metro Denver.  The annualized number of sold properties based upon the first quarter would be 34,377 total single family homes closed in 2010 below 1 million.  This relates to a 5.196 month supply of homes below 1 million, which would indicate a sellers market.  Granted a good portion of that sold data is below $300,000 but taking the overall number does indicate the market has hit bottom below 1 million in Denver and although the properties priced from $300,000 to 1 million will move slower, this price range is starting to see activity from the move up buyers.

Conversely, the above $1 million inventory shows 1126 homes on the market as of today and for the first three months there has been 78 homes close above $1 million or an annualized number predicted to be 433.  If we take the 433 annualized sold single family homes divided into 1126 active single family home inventory = a factor of 2.6 X 12 = 31.2 months of absorption time for properties above 1 million.  

Fact Number One does give us a pretty good indication that properties in Denver above $300,000 will start to sell at a better rate than we have seen the last three years.  That means prices will go up as inventory continues to remain low.

FACT TWO:  Properties being placed Under Contract are rising faster than previous years.

The increase of Under Contract properties from March to April is 910 units.  That is the largest April over March increase in 5 years.  Under contract properties typically are the leading indicator for future markets.  This number could be inflated by the 2010 $8000 Tax Credit provided to First Time Home Buyers and the $6500 Tax Credit for Move Up Buyers.  In trending this number over the next 6 months will give us a very good picture of late summer early fall closings.  The fact is today that more buyers are under contract today than any April in recent history.

FACT THREE:  2010 March out performed 2009 for a Year over Year monthly increase of Sold Properties.  This is the second month in the last six months where this year has outperformed the previous year.  When this trend repeats itself for three consecutive months in a row, we have past the bottom.

Sold data is a lagging indicator of the market as it displays what truly is happening at the moment.  The YTD sold data is still down compared to previous years and March could be an abnormality, but this should be a trend to watch this spring into the fall to get a good prediction of where the Denver market is heading.

Here’s the YTD sold data for single family and condominiums from January 1,  to April 1, of each year.

Finally the sold data increase from February of 2010 to March 2010 increased 1084 units.  A typical increase from February to March would be 671 units.  This abnormal increase is a number we want to track to see if we are seeing a trend to count on.

FACT FOUR:  2010 offers an opportunity of a lifetime called, “The Upside Market”. 

An “Upside Market” is a market that the sellers of one price range can sell for top dollar and within the same market demographics buy a property at a discount of greater than 10%.  This phenomena only happens once in a generation and those sellers who have the ability to move up in the Denver market are experiencing a wealth shift in real estate not seen since 1983.  Although some sub markets provide more savings than others, the overall opportunity for a seller selling below $300,000 to get top dollar is good and to buy a product at $750,000 and get a 10% or greater price reduction is very feasible.  With interest rates allowing consumers to taking advantage of the “Upside”, this is the best time to buy in a generation.

So, How’s the Market, March, 2010

All real estate data taken from Metrolist, Inc, on March 6, 2010.  Denver, Colorado.

“Future Real Estate Markets can be predicted by three factors:  Inventory, Interest Rates and Job Stability.”

March 2010 inventory is showing seasonal growth, but still remains low compared to previous years.  Inventory is at a 5 year low for March 2010.  Inventory in March of 2010 has grown by 1784 units or 9.53% over February.  This is higher than previous February to March inventory growths as the average growth is typically 2.87%.

An interesting factor is happening in upper end properties for the first time in 3 years.  The inventory is shrinking.  We predicted last year that upper end inventories would come down primarily due to homeowner’s ability to ride out the economic downturn and that is what is happening.  Look at the chart to show February to March Inventory compared to February closing from $750,000 and above.

Here’s the sold data above $750,000 to show a slight increase in upper end properties selling in 2010 over 2009.  Watch this trend, as we would predict a higher inventory of upper end priced properties to hit the market in the spring and summer of this year and a slight increase in upper end properties selling over the previous year.  This does not indicate a full turnaround for upper end properties but a positive trend that should be watched to better predict the upper price range future.

· Single Family Homes priced above $750,000 make up 12.2% of total inventory which is higher than normal.

· Single Family Properties priced above $750,000 in the single family category that sold in February 2010 make up 2.7% of all sales in Denver.

· Inventories of single family homes in the 0-$250,000 make up 37.9% of the listing on the market for March.

· Properties priced from 0-$250,000 that sold in February 2010 made up 59.35% of all sales in the Denver area.

· Homes priced from $250,000 to $500,000 make up 38.35% of the sold inventory for March of 2010

· The sold data of homes closed in February 2010 priced between $250,000 and $500,000 represent 33.16% of single family homes sold.

· Single Family Homes constituted 78.37% of all February sales in the single family-condo markets in metro Denver.

· Condominiums priced from 0-$250,000 made up 84.55% of all the condo’s sold in February 2010.

· Condominiums priced above $750,000 represented 1.1% of all condo sales in February 2010.

Historically Low Interest Rates are Allowing Buyers to Buy in Today’s Market

· First Time Homes Buyers can receive up to $8000 Tax Credit when buying a home this spring.

· Move up homeowners can receive up to a $6500 Tax Credit when buying a home before April 30, 2010.

Rates as of March 6, 2010:  What do these rates mean to buyers buying today?

Conventional Conforming Rates are loans that are less then $417,000.  These loans may require a down payment of 5%, 10% to 20% in today’s market.  A buyer may be able to obtain a 5% down payment in certain circumstances so long the underwriters are not considering the market as a “declining market”, but for the most part, on a conventional loan the buyer must have very solid credit and a strong down payment and most of Denver has not been considered a declining market.

Conventional Conforming 30 year fixed: 4.75%
Conventional Conforming 15 year fixed: 4.25% *(No Origination)
Conventional Conforming 5/1 ARM: 3.625%
 
Jumbo Financing is available in today’s market, which are loan amounts above $417,000.  The buyer’s down payment and credit scores are more stringent than the conforming loans.  A buyer is almost certainly needing to put 20% down or more and their past credit history must be stellar.   However, if you look at the rate of 5.375%, this is historically low and on a $750,000 loan the payment for principle and interest would be $4,181 per month.  Someone buying a 1 million dollar property today will be able to get a discount off of the price and finance the purchase with very attractive rates.  5/1 ARM is a loan type that is fixed for 5 years than adjusts to an index after the 5 year period.  Adjustable rate loans may a an attractive loan for someone who will live in the home a shorter period of time than the adjustment.
 
Jumbo 30 year fixed: 5.375%
Jumbo 5/1 ARM: 4.750%
 
First time Home Buyers gravitate toward FHA financing for two reasons.  1.  Lower down payments of 3.5% allows the buyer to get financed and 2. The qualifying ratios for this type of loan are higher than conventional allowing the buyer less income to buy a home.  FHA loan limits for the Denver metro area counties are $406,250 and for Boulder County is $460,000.  Look at the FHA 5/1 ARM as a very attractive rate for 5 years.  The payment on $400,000 at 3.5% is $1791 dollars for principle and interest.  There are additional costs with FHA loans, but these are very attractive loans for people purchasing below the $420,000 price range.
 
FHA / VA 30 year fixed: 5.00%
FHA / VA 5/1 ARM: 3.50%
 
Prime rate: 3.25%

Job Stability Creates Confidence for Buyers to Buy Properties

· National Unemployment is running at 9.7%.

· Metro Denver Unemployment is approximately 7.5% or more than 2% better than the national average.

· Denver has a resurgent energy industry with both renewable energy and hubs for coal, oil and gas which will expand in 2010 and 2011.

· Service sector jobs have been a large segment of Denver workforce in the past, which has decreased over the last three years.  These jobs are construction, sales and retail.

· Health care is another emerging industry in the Denver metro area for the next two years.

Market Trends as of March 2010

· As inventory decreases in lower price points, prices will continue to rise in 2010 in Denver.

· Short Sales will increase as a selling alternative for homeowners and lenders vs. foreclosure.

· The Colorado Foreclosure Protection Hotline provides consumers with excellent FREE information on the foreclosure process. Colorado Foreclosure Prevention Hotline 1-877-601-HOPE  www.coloradoforeclosurehotline.org

· Condominium sales are lagging behind single family homes and will not see the appreciation that entry level single family homes are experiencing.

· Interest rates will rise in the summer through the fall of 2010.

· Inventory in the upper price range will grow slightly from current levels in 2010.

What should buyers do in today’s market?

· Take advantage of the $6,500 dollar Tax Credit before April 30th contract deadline.

· There are tremendous properties above $750,000 looking for offers.  This window will close in 12-18 months from now.

· Consider terms over price in some instances to move into your dream home.

What should sellers do in today’s market?

· Price your home to sell within 30-60 days.  Get moved now before inventories increase and interest rates increase.

· Offer terms to attract to discriminating buyers.

· Know your competition before getting ready to sell.  Utilizing an Experienced Broker is not Expensive, It’s Priceless in today’s market.

So, How’s the Market, February, 2010
All data taken from Metrolist, Inc, on February 4, 2010. Denver, Colorado.

“If you believe real estate is cyclical, then the facts show the market has hit bottom and is on the way back up.”

February 2010 has the lowest residential and condo inventory in 7 years. This month also displays the highest number of home under contract for a February since 2006 and although the sold data is lagging behind previous years, the 2010 spring season is showing signs of a rebound.

There are Five Facts why 2010 will be a more consistent year in residential real estate in Denver Colorado

The First Fact: 2010 will be improved over past years are inventories are at historical lows in Denver.

Inventory in February of 2010 is the lowest level in 7 years. With single family and condo units that are for sale totaling 18,716, makes for a 8.7% decrease in the number of available properties over February of 2009 and a whopping 28.1% over February of 2006.

• Inventory rose from January 2010 to February 2010 11.5%, which is higher than the average for previous January’s to February’s.
• There are 13,833 single family homes on the market in February.
• Single Family Homes priced above $750,000 make up 13.3% of total inventory which is higher than normal.
• Properties priced above $750,000 in the single family category that sold in January 2010 make up 1.2% of all sales in Denver.
• Inventories of single family homes in the 0-$250,000 make up 38.7% of the listing on the market.
• Homes priced 0-$250,000 will continue to outperform the market, but will also cause the median price in Denver to remain below $250,000 for 2010.
• Properties priced from 0-$250,000 that sold in January 2010 made up 61.6% of all sales in the Denver area.
• Homes priced from $250,000 to $500,000 make up 37.9% of the inventory.
• The sold data of homes closed in January 2010 priced between $250,000 and $500,000 represent 32.1% of single family homes sold.
• Single Family Homes constituted 74.9% of all sales in the single family-condo markets in metro Denver.
• Condominiums priced from 0-$250,000 made up 87.2% of all the condo’s sold in January 2010.
• Condominiums priced above $750,000 represented 2.6% of all condo sales in January 2010.

The Second Fact: 2010 Tax Credits extended to April 30th of 2010 will propel the market forward.

• First Time Home Buyers can receive up to $8000 Tax Credit when buying a home this spring.
• Move up homeowners can receive up to a $6500 Tax Credit when buying a home before April 30, 2010.
• To take full advantage of the tax credits, the buyer purchase must close before June 30, 2010.
• These incentives with low interest rates will create activity the first half of 2010 that was not realized in the first half of 2009.

The Third Fact: 2010 will be improved over previous years as Denver’s pipeline of homes under contract is the highest it has been since 2006 for a February.

The Fourth Fact: A Compelling Reason Denver’s Real Estate Market is on the Upswing is Sold data has hit lows in both Single Family and Condominiums and will start to rise.

• Sold data is the trailing indicator of market conditions.
• January 2010 is 12% less in single family and condo sales than January of 2009.
• Single Family sales decreased by 14% and Condo’s decreased by 5.5% from January 2009 to January 2010.

The Fifth Fact: The Market is bouncing along the bottom and will improve over 2009 is we have reached a new normal in real estate on how homes will be transferred.

• The market consumer is better understanding and creating a new trend to Avoid Foreclosures.
• Short Sales have made up approximately 7% of all sales for 2009 and will double that number in 2010.
• Lenders are offering more alternatives to foreclosure than ever before.
• The Colorado Foreclosure Protection Hotline provides consumers with excellent FREE information on the foreclosure process. Colorado Foreclosure Prevention Hotline 1-877-601-HOPE www.coloradoforeclosurehotline.org
• Homeowners should seek the advise of a professional broker in dealing with foreclosure and short sales.
• Auctions will diminish the foreclosure inventory at faster rates than people expect.
• Auctions will help sell re-sale non-distressed homes to determine true market value.
• 1031 Exchanges will help homeowners move up or down without having to sell their homes.
• Investors will use their Retirement Accounts to buy lower priced properties to build a portfolio in their IRA.
• Denver’s unemployment is 7.5% compared to 9.8% nationally which makes for a more stable economic condition.

Overall 2010 will bring compelling reasons to buy real estate in Denver.

• The $8000 tax credit for first time homebuyers and the $6500 dollar tax credit for existing home buyers will increase demand the first half of 2010.
• Interest rates appear to remain low through the first 6 months of the year.
• Continued fewer new home starts will create less competition for resale homes.
• Check out the RE/MAX Professionals Auction on April 10, 2010
• Prices for the upper end market continue to offer extraordinary concessions making for a perfect time to acquire the home of your dreams.

What should buyers do in today’s market?
• Take advantage of your “Move-up Power” Today.
• Get qualified before starting your search to become more attractive to sellers.
• Consider terms over price in some instances to move into your dream home.

What should sellers do in today’s market?
• Know the market price for your home and have a cash price for your home in the back of your mind to entice a quick sale.
• Consider reverse offers when conditions warrant, especially on upper end properties.
• In the lower price ranges, be the best conditioned to get multiple offers.

So, How’s the Market, December, 2009
All data taken from Metrolist, Inc, on December 5, 2009. Denver, Colorado.

November sold data outperformed, 2008, 2007 and 2006 in number of single family and condo units closed for the month. This is the first time in four years we have seen a Month outperform several years prior for the same period. The $8000 Tax Credit, low interest rates and increased consumer confidence because of low housing prices fueled this years November closings. The November sold data showed 3289 closed units and in 2008 it was 3056 units closed or 233 more units closed this year for a 7.08% increase over last November.

We have had a seasonal slow down from October to November with closings slipping from 3708 units in single family and condo homes in October to 3289 units in November or an 11.3% reduction in closings from October 2009 to November 2009. Normally a reduction of 10% occurs between October and November, so watching this trend of increased sales year over year and normal seasonal downward sales can help us predict the 2010 real estate year in Denver.

Here’s the sold data for November of the previous 5 years.

• December Active Listing Inventory is at 14259 for single family home’s is down from 17176 from one year ago.
• The number of Active listings for Condominiums in December is 4620 and last December there were 5095 units available.
• The current 18879 active single family and condominiums is the lowest December inventory in more than 5 years.

Listing inventory continues to decline as you can see over the last five years. A little abnormality occurred in December of 2009 for homes priced from zero to $250,000. Normally we would see a decrease in inventory, but this price range actually went up from November 2009 to December 2009 from 4963 Single Family units to 5080 single family units. We want to watch this over the next several months to determine if a market shift is occurring in the lower price ranges. 2009 has experienced the largest price increase on average in the lower price ranges and the extension of the $8000 first time home buyer Tax Credit and the addition of the $6500 Tax Credit for existing home owners should continue to cause the lower price ranges to appreciate, but watching the inventory in the upcoming months will tell us more about where we are going.

• There are fewer properties to compete with today and serious buyers are buying now, as the Tax Credit has been extended and expanded to include current homeowners.
• Interest rates are 4.875% for conforming loans today and more than likely will be a little higher in 2010 causing buyers to make a buying decision now versus next year.
• We anticipate a slight rise in interest rates in the first half of 2010.
• We are seeing investors creating loans have more competitive jumbo rates in small doses. Watch as these are in and out of the market quickly.

Under Contract data is still outperforming pervious years for December 2009.

• The number of properties under contract is at 5694 single family and condo units.
• The number of properties under contract today is 298 units higher than 12 months ago.
• Job stability in Denver will allow more buyers after the first of the year to take advantage of the Tax Credits being offered.
• The number of properties under contract in December of 2009 is the highest recorded December in 4 years.

What should sellers do in this market?

• Today’s real estate market for sellers is a choice of your home being a beauty contest or a fire sale. You must be the best looking home or the lowest priced property to attract today’s buyer pool
• Although inventories are decreasing, know your specific price range, as each price range affords a different amount of buyers buying today.
• Consider an Owner Will Carry scenario for upper end price homes with equity. This is a creative tool for those sellers who have the ability to carry the paper for the buyer buying their property and get a return on investment.
• Offer a holiday special price reduction, like “10% off the Price for Christmas to New Years Week”.

What should buyers do in this market?

• With the extended $8000 dollar Tax Credit for First Time Buyers and the NEW $6500 Tax Credit for existing homeowners who will buy a primary residence, get into the system of being prequalified now as there will be an increase in the buyer pool causing competition for homes in January and February.
• Have you considered using your Retirement Account IRA to purchase an investment property in 2010? You can do that with a good upside for returns compared to other investment vehicles.
• Become a prequalified buyer before looking. The guidelines for lending changes daily and you want to be approved before moving forward.

So, How’s the Market, November 2009
All data taken from Metrolist, Inc, on November 6, 2009. Denver, Colorado.

October was the first month to outperform the previous years sold data in 5 YEARS! In October 2009 there were 3708 closed units for single family and condos. Twelve months ago October had 3341 units closed and two years ago in October the number of closing was 3398. We have to go back to 2005 to see an October with more closed transactions. In fact, the increase year over year was a whopping 10.98% increase over last October. There are a couple very good reasons for this positive change. 1. Last October the financial world was in major disarray and 2. The First Time Home Buyers Tax Credit worked in 2008. The chart below will show you the sold data for October of each year.

• November Active Listing Inventory is currently at 15,076 units for single family homes and is down from 18,331 from one year ago.
• The number of Active listings for Condominiums in November is 4,685 compared to last November there were 5,366 units available.
• The current 19,761 active single family and condominiums is the lowest November inventory in more than 5 years.
• The number of sold properties from Sept to October 2009 increased by 4.01%. A normal September vs. October sold data would see approximately 3% reductions.

Listing inventory continues to decline as you can see over the last four years, which helps create opportunities for those on the market. Many predict an increase in single family homes to come on the market in 2010 which will increase competition. Normally, a seasonal increase will occur in March of each year and grow through the spring. Homeowners who are considering selling now should consider these factors:

• There are fewer properties to compete with today and serious buyers are buying now. The Tax Credit has been extended and expanded to include current homeowners, which will create several new waves of buyers throughout the winter months and into the spring when the tax credits end.
• The fourth quarter brings relocation buyers into town, which can create more opportunity for those on the market.
• Interest rates are currently 4.875% for conforming loans today and more than likely will be a little higher in 2010 causing buyers to make a buying decision now versus next year.

Under Contract data is still outperforming previous years for November 2009.

• The number of properties under contract is currently at 6,925 single family and condo units.
• The number of properties under contract today is 1,131 units higher than 12 months ago. Buyers have taken advantage of the $8,000 first time home buyer credit being offered as an incentive and will continue to do so through winter and into spring. The new wave of buyer’s looking to trade up and take advantage of the $6,500 tax credit should create a domino effect in most price ranges.
• The number of properties under contract in November of 2009 is the highest recorded November in 5 years.
• This increase also shows it is taking longer for homes to close due to the advent of short sales, pre-foreclosure transactions, loan modifications and foreclosed properties dealing with absentee owners.

What should sellers do in this market?

• Know the supply and demand numbers for your price range and area. If you have 3 months supply or 3 years supply in your area, that supply vs. demand should make a significant difference in how you price and market the home.
• Your home must be the best conditioned home on the market. Make it sparkle. Buyers are looking for the perfect house.
• Consider an Owner Will Carry scenario for upper end price homes with equity. This is a creative tool for those sellers who have the ability to carry the paper for the buyer buying their property and get a return on investment. Not for all sellers to use, but a tool to get you top dollar in today’s market, if you have the ability.
• Offer a holiday special price reduction if you need to sell quickly. Specials like “10% off the Price for Thanksgiving Weekend” can create some buzz. Many extended family members encourage the purchase of a new home and sometimes help with the down payment for first time buyers.

What should buyers do in this market?

• With the extended $8,000 dollar Tax Credit for First Time Buyers and the NEW $6,500 Tax Credit for existing homeowners who will buy a primary residence, get into the mode of buying now as there will be an increase in the buyer pool causing competition for homes.
• Consider a Multi Generational Model for buying a larger home, meaning combine several generations in one family to buy jointly into the upper price range homes. The discounts on homes above a million are plentiful and combining net incomes and down payments could be a very efficient way to get a great deal on a home that you may not have considered in the past.
• Become prequalified buyer before looking. The guidelines for lending changes daily and you want to be approved before moving forward.

So, How’s the Market, October 2009
All data taken from Metrolist, Inc, on October 5, 2009. Denver, Colorado.

When was the last time Denver real estate had a sold month that outperformed a previous month in the last 4 years? Well it happened in September of 2009. September of 2007 had 3509 homes that closed that month. Many analysts suggest that 9-2007 was the 12th month of the housing downturn in the Denver market that started in mid 2006. September of 2009 had 3565 homes closed or 54 more than September of 2007. Future months will start to show this trend against 2008 sold data, so the turnaround is now happening to Denver real estate that is backed up by the numbers.

· October Active Listing Inventory is at 15,889 for single family homes.
· The number of Active listings for Condominiums in October is 4961.
· The current 20850 active single family and condominiums is the lowest October inventory in more than 5 years.
· The number of sold properties from Aug to Sept 2009 reduced by 1.4%. A normal September vs. August sold data would see 3-5% reductions.
· The current YTD sold figures are off 14.02% from the number of properties sold in 2008.
· October 2009 Active listing inventory is 34.3% lower today than in September of 2006.
· Average Days on the Market of Single Family homes is 94 days.
· Average Days on the Market for Condo’s are 98 days.
· The average sold price in Denver for single family homes is $273,972.
· The average sold price in Denver for condominiums is $167,090.
· The average list to sale price in Denver is 96.8% of current list price. This does not reflect price reductions that may have occurred before the new sale happened.

Listing inventory continues to decline as you can see over the last five years. Many predict an increase in single family homes to come on the market in 2010. Normally a seasonal increase will occur in March of 2010, however, we predict that the residential housing inventories for 2010 will be within 3% up or down of where 2009 inventories are for the following factors:

· People are still not secure in their job positions to make a move which will keep resale listing inventories lower
· Although an increase in foreclosed properties will enter the market in 2010 and 2011, these will be priced aggressively and be spread out over a longer period of time to maximize the REO lenders position.
· There has been insufficient equity increases to allow for normal resale of property to occur, hence fewer sellers not committing to sell in the short term.
· The buyer pool is smaller today keeping existing listings on the market longer, which tends to dissuade other sellers from becoming competitors.

Under Contract data is the surprising figure for October 2009.

· The number of properties under contract is at 7495 single family and condo units. That is a 2.4% increase over September 2009
· The number of properties under contract is 980 units higher than 12 months ago. Buyers have taken advantage of the $8000 first time home buyer credit being offered as an incentive.
· The number of properties under contract in October of 2009 is the highest recorded October in 5 years.
· This increase also shows it is taking longer for homes to close due to the advent or short sales, pre-foreclosure transactions, loan modifications and foreclosed properties dealing with absentee owners.
· In addition, mortgage guidelines have elongated the contract process in both the appraisal system and the funding of a new loan system. Both have new guidelines in the last 90 days making it harder for the process to move quickly.

What should sellers do in this market?

· Is your home an extraordinary home in a terrific price position? If not, revisit your market position and goals as buyers are scrutinizing every home to determine if this is a great deal for them to buy.
· If you, as a seller, were a buyer, what would you pay for your home today? Price does matter to buyers be honest with yourself.
· Consider the “Guarantee of a Buy Back”. This is a creative tool for those sellers who have the ability to guarantee a sale to the buyer buying their property and get a return on investment. Not for all sellers to use, but a tool to get you top dollar in today’s market, if you have the ability.
· Videos are the new rage of marketing homes. Consider this as a marketing option.
· Use a professional stager or a seasoned agent to make your home sparkle. Buyers want move in condition properties.

What should buyers do in this market?

· Understand the Pricing Model before making an offer. The model includes three components, price, terms and time. Which one is the most important to you to close the transaction?
· Have a game plan for how long you want to be in the home you are buying. Knowing the goals makes it easier to buy a home and get a great deal if you are convicted in your plan.
· Include environmental inspections of Radon, CO2, Lead Based Paint, and Electro Magnetic Field inspections where appropriate.

So, How’s the Market, September 2009
All data taken from Metrolist, Inc, on September 7, 2009. Denver, Colorado.

September data for properties under contract are showing a 3% increase from August. There are currently 7322 single family and condominiums that are under contract as of this writing. For September, this is the highest under contract stat in 5 years. What this means is that it is taking longer to close a transaction and that buyers are becoming more comfortable in their decisions to make a home purchase. The $8000 First Time Home Buyer Tax credit has contributed to this level of confidence during the last 60 days, as this credit ends on November 30, 2009. Buyers will need to contract no later than approximately October 31, 2009 to really take advantage of this housing perk.

· September 2009 active listing inventory for Single Family and Condo’s decreased 2.2% from August to September. Two of the last 4 Septembers had increased inventory month over month.
· The current 21229 active single family and condominiums is the lowest September inventory in more than 5 years.
· August sold data of 3616 units is the lowest August in more than 5 years.
· The current YTD sold data for 2009 is 29.4% below 2005, which was the peak of sales performance in Denver.
· Year over Year the sold data is off 15%. This figure will start to change to a positive number as the 4th quarter approaches and into 2010. We have seen the bottom of the sold data figures and October 2009 should reflect a rise as a result of the number of under contract properties currently listed if they close on a normal basis.
· The Denver Metro area is poised to close over 35,418 single family and condo properties for the year 2009 based upon August sales figures.
· Single Family Homes priced from 0-$250,000 have a 3.569 month supply of homes as of September 7, 2009
· Single Family Homes priced from $250,000 to $500,000 have an 8.185 month supply as of September 7, 2009. This price range is starting to shrink slowly.
· Single Family Homes priced from $500,000 to $750,000 have a 19.127 month supply of inventory as of September 7, 2009.
· Single Family Home priced from $750,000 to $1 million have a 30.77 month supply of inventory.
· Single Family Homes priced above $1 million have a 58.269 month supply of inventory as of September 7, 2009.
· Condominiums below $250,000 have a monthly supply of 6.07 months.
· Condos above $250K to $500 have a supply of over 19.064 month of inventory.
· A six month supply of inventory typically creates equilibrium between buyers wanting to buyer and sellers wanting to sell in home sales in the Denver market.

The data continues to show an improving but fragile real estate market in Denver. Job insecurity is holding back a rush of buyers into the marketplace. As the inventory continues to decrease and job stability improves, Denver is poised for real estate to improve in value. We are seeing this happen below $250,000 and the next price point of $250,000 to $500,000 is starting to experience a decrease in inventory. It normally takes 6 months to see each.$250,000 of price catch up to the market.

The telling sign of the marketplace is the buyer that can buy an upper end property. They are able to secure a lot of home at an attractive price. Although each area is a little different in what a buyer can buy a million dollar property for, discounts of 25-30% are not abnormal. Although upper end price inventories are decreasing, there are still plenty of great buys above $750,000. Take a look at the listing inventory vs. the number of sold properties projected for 2009 above $500,000 for the Denver metro area.

What should sellers do in this market?

· Price per square foot is a number buyers use to determine value. Although this may be a flawed number, make sure you know what your price per square foot is compared to your competition.
· Why should a buyer buy your home in today’s marketplace? Know the why to create the proper position for your home.
· Be the best conditioned home on the market. The competition is weak against condition, so to differentiate your home, be the best looking.
· Showings increased in August over July. If your home is not getting enough showings, ask your RE/MAX Professionals broker to help you better position your home where the buyers are showing.
· Stage your home or make your home shine on the inside for successful positioning.
· Add an incentive to your package, like prepaying HOA dues for a period of time to attract the buyers.
· Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

· Become a “cash buyer” meaning have your loan in place to get the best prices.
· Price should be secondary to the terms a buyer can get. Know your options on price and terms and you will be better leveraged and have a more financially secure loan when buying a home.
· Eliminate lots of inclusions into your loan, as lending practices have changed and this could delay your process.
· Ask for a Home Warranty Plan as part of your offer.
· Get a copy of your appraisal before your loan conditions deadline.
· Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors.

So, How’s the Market, Aug 2009

All data taken from Metrolist, Inc, on August 7, 2009. Denver, Colorado.

July sales increased 2.89% over June of 2009, great news! Normally, sales for July are lower than sales for June.

· July 2009 Sold Properties for Single Family and Condo’s Increased 2.89% from June.
· This is a consistent sign that confidence in the real estate is increasing.
· July 2009 sold data of 4091 is 7.71.% lower than July 2008
· July 2006 data shows 4601 single family and condos closed which is 11.08% higher than July of 2009. The current sold data is moving closer to previous years data, which is a sign of positive growth.
· Once a year over year stat for a specific month outperforms that previous year and the trend continues for 3 months, historically real estate markets are considered an increasing market. Look for this to occur over the next 6 months.
· The Denver Metro area is poised to close over 37,000 single family and condo properties for the year 2009.
· The percentage of single family and condo homes sold under $1,000,000 compared to above $1,000,000 is 99.09% of the homes sold YTD. This percentage of sold indicates less than 1% of all homes sold are over 1 million dollars. The market indicates when selling a million dollar property the pricing strategy needs to be the most competitive in the marketplace.
· Single Family homes and Condominiums priced from $500,000 to $1 Million are showing 1202 homes sold the first 7 months of 2009. This represents a 5.492% of home sales in the entire Denver marketplace.
· Single Family homes priced from zero to $250,000 now have a 3.53 month supply of inventory from July’s figures
· Single Family Homes priced from $250,000 to $500,000 now have an 8.48 month supply of inventory from July’s figures
· Single Family Homes priced from $500,000 to $1 million now have a 23.09 month supply of inventory from July’s data.
· Single Family Homes priced above $1 million now have a 57.04 month supply of inventory from July. This number has dropped by 6 months of supply from the June data.
· Condominiums below $250,000 have a monthly supply of 6.35 months.
· Condos above $250K have a supply of over 25.52 months.
· A six month supply of inventory typically creates equilibrium between buyers wanting to buyer and sellers wanting to sell in home sales in the Denver market.

Overall, the data indicates a slowly improving market. We are seeing consistent showings, contracts, and sold data for the first seven months of the year slowly increasing in Denver each month.

The number of homes under contract has remained constant with 7110 single family and condo homes under contract for August 2009. Compared to the previous four years, August, 2009 has a higher under contract number over 2 of the previous three years.

· There are several reasons for these yearly numbers to be fluctuating the way they do, but primarily, lending guidelines, short term economic conditions and job stability affect under contract numbers and looking back on August of 2006, 2007 and 2008, the U.S. had a unique set of circumstance affecting the August to October Under Contract numbers of each year. Make yourself aware of the past history to predict the future of real estate and do not over react to a single number as that is a snap shot of the moment, not a trend.

Inventories in Denver are still the news. Currently there are 21706 single family and condo homes active on the market on August 7, 2009.

· This is a decrease in inventory of 18.84% from 12 months ago.
· The inventory from July to August showed a zero increase. Normally August inventory would rise from July, but it has not in 2009.
· Since April of 2009 until today, the single family inventory has grown less than 1% over a 5 month period. This lack of increase in inventory is the market correcting in front of our eyes.
· There are only 16,000+ single family units for the entire marketplace and some of those are distressed to the point they are not really active listings for the normal buyer.

What should sellers do in this market?

· Know what your supply and demand is on your home. Buyers are using this to justify their offers.
· Make sure you have a compelling story about your property that will cause a buyer to buy?
· Be the best conditioned home on the market. The competition is weak against condition, so to differentiate your home, be the best looking.
· Talk about today’s buyer mentality with your REMAX Professionals broker to best understand the psyche of the buyer buying. They are out there buying homes; you just need to attract them.
· Have Property Brochures better than your competition in your home. This will allow the buyer to remember your home instead of the competition.
· Add an incentive to your package, like paying for closing costs, rate buy-downs, or prepaying HOA dues for a period of time to attract the buyers.
· Price, Terms, and Time are all factors in providing a package for buyers. Are you sending clear message what that package is about your home?
· Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

· With New Lending Guidelines that started August 1, 2009, each buyer needs to be better prepared by knowing the down payment and closing cost financial package they want. Delays in lending will occur if the buyer keeps making changes to their loan package.
· Price should be secondary to the terms a buyer can get. Know your options on price and terms and you will be better leveraged and have a more financially secure loan when buying a home.
· For those buyers who are owner occupied looking to build equity by fixing up a foreclosure property through a contractor, look to the FHA 203KS rehabilitation loan package as one to consider when needing repairs up to $35,000 of interior improvements.
· Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors