The number of Denver housing market sales that closed in February was down from January by nearly 13 percent, according to data released Tuesday by Denver-based Metrolist Inc.
But independent real estate broker Gary Bauer says there’s no reason to be alarmed.
“Here’s the reason why the January numbers were higher than February: Many closings that were scheduled for December had to be moved to January” because of the severe winter weather, Bauer said.
Title companies, banks and Colorado mortgage brokerages were all closed on days they normally would be open due to the blizzards that hit the Denver area the last two weeks of December.
“February historically would have been higher [in sales than January], but closings were delayed one to two weeks,” Bauer said.
Thus, 3,090 home sales were closed in February as compared with 3,540 in January. Homes placed under contract, however, jumped in February from 4,292 in January to 4,929, an increase of nearly 15 percent.
Average home prices in Denver were down for single-family homes. The average price in February was $292,143, down from $297,368 in January. Compared with February 2006, when single-family homes sold for an average of $305,017, the drop was even more significant.
“Prices are down a little. We’re seeing a little impact by the foreclosures,” Bauer said.
Compared to other parts of the nation, Denver is holding steady, though, he said. Those seeking any sort of home mortgages should not hesitate to come to the region.
“In some markets they’re incurring 10, 20 or 30 percent reduction in values,” Bauer said. “Denver usually runs counter-cyclic to the national trends.”
He noted that with home inventories very high among new home builders throughout much of the Denver area, many are offering incentives to entice the first-time home buyer, a change in strategy that could impact the re-sale market in the months ahead.
“We’ll just have to watch what happens,” Bauer said.
Posted by Jed Moss on Mar 07 2007 under Colorado
Home sales declined last month around the Pikes Peak region, although real estate agents remain optimistic that housing activity will pick up as the spring approaches.
According to the Colorado Springs Gazette, sales of single-family homes fell nearly 11 percent in February compared with the same month a year ago.
As sales slid, the supply of homes on the market surged by a whopping 25 percent in February from 12 months ago, the Pikes Peak Association of Realtors reports.
Despite a larger supply and reduced demand, homes that did sell around the area fetched higher prices, reflecting that Colorado Springs mortgage demand hasn’t entirely fallen off the radar in the region; the median price for homes sold in February rose 4.9 percent to $214,950.
The numbers reflect home sales and listings handled by Realtors Association members mostly in El Paso and Teller counties and don’t include homes being marketed for sale by owner.
The Colorado Springs housing market enjoyed record sales in 2004 and 2005, but took a step backward in 2006 when sales declined and inventories rose.
Real estate industry members and economists have said the current market is a victim of past success. Low Colorado mortgage costs lured many people to buy homes in 2004 and 2005, but strong sales in those years have drained the pool of buyers in 2006 and so far into 2007.
All of which has led to a softer housing market.
Another problem last year: Speculative homes — those built before buyers actually purchase and occupy them — were constructed by area home builders and competed with the resale market right as demand waned.
But home builders have slowed construction of speculative homes, which should help cut inventories and make resales more attractive to buyers, said Wynne Palermo, owner of Wynne Realty Ltd. in Colorado Springs.
“It bodes well for the resale market,” she said.
At the same time, home mortgage rates remain at relatively lows; last week, they averaged 6.18 percent nationally for a 30-year, fixed-rate mortgage, according to government-backed mortgage giant Freddie Mac.
Combine low mortgage rates with an ample supply, and the intelligent buyers will have plenty of choices for quality homes, which should help boost area sales as the year goes on, said Ben Day, branch manager of ERA Shields Real Estate’s InterQuest office in Colorado Springs.
SOURCE: Colorado Springs Gazette
Posted by Richard Barber on Mar 06 2007 under Colorado
Earlier this week, the Rocky Mountain News predicted another rough year for the Denver housing market. Today, the Denver Post echoes that sentiment, but is slightly more optimistic, calling the current market “just flat.”
Home prices in Denver and Aurora appreciated at a meager 1.3 percent rate in the fourth quarter of 2006 - compared with the same period in 2005 - as the metro housing market struggled to find footing.
That’s the slowest appreciation rate for Colorado’s most populous area since the third quarter of 1990, when the country was mired in a recession, according to the Office of Federal Housing Enterprise Oversight (OFHEO).
“People who buy a house thinking ‘the market will take care of me’ - those days are gone,” said John Sullivan, a mortgage broker and co-owner of Re/Max Cherry Creek.
Over the past five years, as low Colorado mortgage rates spurred strong numbers of home purchases, average home values in the Denver-Aurora area are up 16.8 percent, compared with a 55.2 percent gain nationally in that same period.
Subtract a modest 9 percent inflation rate over the period and a 6 percent real estate commissions from any housing gain, and a typical seller who bought five years ago would turn little profit.
“The Colorado economy is in great shape, but the housing market is just flat,” said Lou Barnes, a mortgage broker in Boulder.
The home-price gain in the fourth quarter was below the meager gains recorded in 2003, when the state was reeling from the loss of tens of thousands of jobs following the tech and telecom bust.
Home prices appreciated at a 3.3 percent pace for the Colorado housing market as a whole in the fourth quarter, ranking 43rd among all U.S. states, according to OFHEO.
Variations within Colorado were wide.
Greeley and Boulder showed gains below 2 percent. The Fort Collins-Loveland region had the weakest gain of any major metro area in the state, 0.85 percent. Colorado Springs and Pueblo experienced price gains of 4.7 percent and 5.35 percent.
In the Grand Junction area, an influx of energy workers and continued interest in the area as a retirement haven have resulted in a housing shortage, said Kathi Williams, director of the Colorado Division of Housing.
Its housing market posted a home-price gain of 13.3 percent, comparable to those in Utah, Wyoming and Idaho, which led the country with appreciation rates of 14 percent or higher.
The OFHEO index looks at the sale or mortgage refinancing of a large block of homes across time, tracking more than 32 million transactions over the past 32 years.
It is considered a more precise gauge of home values than Realtor-generated resale numbers, which calculate values based on the mix of homes sold in a given period. Also, Realtors have a vested interest in putting the best spin on market trends and home mortgage demand.
SOURCE: Denver Post
Posted by Richard Barber on Mar 02 2007 under Colorado
You could call it unlucky No. 7.
As in, the number of consecutive years the Denver housing market has been struggling.
The challenges for 2006 were the same old story, according to the Rocky Mountain News: record Colorado mortgage foreclosures and a 39 percent increase in unsold new homes on the market.
“This will be another tough year,” said Mike Rinner of the Genesis Group, which tracks the region’s real estate market.
But fast-forward to 2008 and there might be some relief.
Denver home prices, which posted some of the strongest growth in the U.S. from 1991 until 2001, floundered after the September 11 terrorist attacks and the subsequent “tech wreck.”
While many of the country’s housing markets soared in recent years, housing prices in the Denver area for the most part remained flat as mortgage demand wanes, and a record number of houses were taken over by lenders.
The report notes that in the fourth-quarter, 4.1 percent of the homes in Adams County were in foreclosure, the same percentage in 1988, when the number of foreclosures previously peaked.
More than 19,000 foreclosures, a record in total numbers, were filed in the Denver area last year. But the overall percentage of homes in foreclosure is 2.6 percent, compared with the peak of 3.8 percent in 1988.
However, on a percentage basis, 2006 was still the worst calendar year since 1989, when 3.2 percent of the metro area’s home mortgages were in danger of some form of foreclosure, according to Genesis.
The market from 2008-2010 should fare much better, based on the projected employment and population growth, coupled with modest new construction.
As with much of the U.S., aging baby boomers in the Denver area will help the upper-end, move-up market. For example, the metro area is expected to see its population grow by about 220,000 from 2005 through 2010 to 2.85 million people. The biggest increase from home buyers will occur in households with incomes of more than $100,000.
“What I think will give us an advantage over a lot of other cities in the country is that not only do we have the aging baby boomers, but we also attract a highly educated work force,” Rinner said.
Home-building consultant Jeff Whiton said young educated buyers have more choices than ever in the current Colorado housing market landscape.
“A lot of little niches are being created,” Whiton said Monday. “There are downtown condos and suburban townhomes. “There will continue to be lot of transit-oriented housing choices.”
Roger Reinhardt, executive vice president of the Home Builders Association of Metro Denver, said that while this will be another “flatline” year for builders, Denver is in better shape than California, Arizona, Florida and Nevada. In those states, prices are cooling quickly after huge run-ups.
“This will not be a good year for the home building business in Denver, but ultimately it will be good for the economy,” Reinhardt said. “When roughly one out of four new home sales doesn’t close, you build up inventory. We’re going to have to work through our problems. There is no quick fix.”
SOURCE: Rocky Mountain News
Posted by Richard Barber on Feb 27 2007 under Colorado
The Denver housing market was lousy in 2006, based on a year-end report released Wednesday by The Genesis Group, an Englewood-based market research firm. The new-home market received a “D” grade, as did the existing home market.
The metro-Denver apartment market earned a “B,” citing stronger absorption rates - which measures the increase in occupancy from one time period to another - and little new inventory coming on the market since 2002.
The report noted that strong local economic growth, retail sales and commercial real estate sales did not translate into a robust housing market.
“Meanwhile, metropolitan Denver’s housing market is hurting,” the report stated. “In spite of continued job growth and other signs of general economic improvement, both the resale and new housing markets suffered from declining sales volume, rising inventories and flat or declining home prices in 2006.”
The report characterized the number of home contract cancellations as “alarming” for the second half of 2006, with cancellations increasing nearly 23 percent for the fourth quarter because Colorado mortgage borrowers got scared at the last minute.
Last year’s lackluster housing market will translate into much of the same in 2007, according to The Genesis Group report.
“We believe the metro Denver area’s economic recovery will continue and pick up steam over the next several years. Unlike the years 2003 through 2005, however, when the new-housing sector was the engine driving the economic recovery, we anticipate other sectors will pick up the slack in 2007 while the new-housing market languishes before recovering.
Therefore, we anticipate no change in new production home sales volume in the Denver metropolitan area from 2006 to 2007, or a total of 14,000 new attached and detached home sales for 2007,” the report stated.
Other highlights of the report:
- For-sale housing permits were down 20 percent in metro Denver in 2006 as compared to the previous year.
- New home sales declined 21 percent, from 17,599 units sold in 2005 to 13,936 sold in 2006. Colorado mortgage loan applicants appear unprepared to purchase at the moment.
- New home communities reported less consumer traffic during the fourth quarter of 2006 than in any quarter since 1994.
- Sales of existing detached homes were down 9.2 percent, and sales of existing attached homes were down 8.4 percent in 2006.
Posted by Jed Moss on Feb 15 2007 under Colorado
For a few months now, those seeking Colorado home loans have shunned the Denver area for more affordable regions in the state.
But times could be changing.
The number of homes under contract was up nearly 25 percent in January in the Denver housing market last month, as compared with January 2006, according to figures released Tuesday by MetroList.
“People made their decisions in December when they were snowed in. They were sitting in their houses and saying to themselves, ‘I’ve got to get out of this place,’” said Lance Chayet, owner of Lakewood-based Hanover Realty.
A key component to the increased velocity of sales was lower prices. The average sold price for homes and condominiums combined was $266,066, a dramatic drop from December’s numbers and from a year ago.
In December, the average sold price was $288,916. In January 2006 it was $280,554.
The robust trading pace, Chayet said, “is being accomplished by dropping prices. Sellers are taking significantly less than the asking price.”
Fortunately, he added, there’s pent-up demand for Colorado mortgage loans among buyers who sat back and watched the market through the last quarter of 2006.
“Real estate businesses and health clubs have a lot in common. After the first of the year, everyone wants to lose 30 pounds and buy a house,” Chayet said.
Here’s a closer look at specific numbers:
- In January, there were 17,985 active listings for single-family detached homes in the metro area. Almost 3,400 are under contract, which is an increase of nearly 30 percent from December 2006.
- There were 6,365 condominium or attached homes on the market, with 912 of them under contract, also nearly a 30 percent increase in Colorado mortgage activity from the previous month.
- The average sold price for a detached home was $297,368, a significant drop from a year ago when the average sold Denver home price was $308,982. The average days on the market is 117, about 15 percent longer than a year ago.
- The average sold price for an attached unit was $170,440, also a strong drop from a year ago when condos were selling for an average of $192,271. The average days on the market is 131, which is two days less than a year ago.
Posted by Jed Moss on Feb 07 2007 under Colorado
About 25 years ago, when the first real estate developer began to eye a big housing project in Basalt, Colo., he threw a weekend carnival to draw attention to a model home in their fledgling Basalt South subdivision.
Today, developers and property owners in the chic Basalt market don’t need carnivals to sell homes, according to the Vail Daily News. The supply is so scarce and the demand so great that housing, particularly single-family homes, gets snatched almost as soon as it hits the market.
In the Willits subdivision, one of Basalt’s newest, home prices started topping $1 million in January. The previous high sale was $770,000.
There were 33 sales of single-family homes in and around Basalt for more than $1 million last year, according to statistics tracked by the Aspen-Glenwood Springs Board of Realtors. Those kinds of sales are changing the complexion of who is buying.
As outside developers and well-heeled home buyers take increasing interest in Basalt, so are current residents beginning to resist the pace of change. The election of a new slow-growth majority to Town Council signals a new and contentious period in the once-quiet Roaring Fork Valley.
With Colorado mortgage demand raging in this hot market, it should come as little surprise that development proposals are stacked up at Basalt Town Hall. Every open piece of ground deemed appropriate for development by the town’s growth policies seems to have a proposal connected to it.
Four projects seeking approval for 250 residences and 230,000 square feet of commercial development are under review.
Basalt Town Councilman Chris Seldin labeled the growth pressures facing the town “tremendous.” When elected, he became part of a new council majority that was prepared to vote against two development proposals - the Roaring Fork Club expansion and Sopris Chase - because they didn’t comply.
Critics of the slow-growth council contend its actions limit supply, keep affordable housing at a bare minimum and drive up mortgage costs as well as values of other property.
“With the no-growth attitude of some of the deep thinkers in Basalt, there is more value today than there was before,” real estate agent Wendy Lucas said. “When you restrict building prospects, values are going to go up.”
Seldin called it a “fantasy” that restrictions have had a huge impact on this segment of the Colorado housing market. As the Vail and Eagle County market show, prices still soar even when there are fewer restrictions, he said.
Seldin said the challenge for Basalt is to keep housing affordable without sacrificing qualities that make the town attractive for so many residents, like strict zoning, rural buffer areas and preserved open space.
In other words, Seldin isn’t willing to allow suburban sprawl to try to keep housing affordable. Besides, he said, there is no guarantee developers will build affordable housing if the council simply approves a lot of projects.
“To me, raw supply is not the solution to that demand. You could have sprawl up and down the valley and still have home prices over $1 million,” he said.
If Basalt doesn’t accommodate more of the people who want to live there, it will just promote sprawl and growth pressures further down the Roaring Fork Valley toward Glenwood Springs, critics have said.
Growth restriction poses as great a threat to Basalt’s small-town character as growing too much. If Basalt evolves into a high-end resort, its current residents will not be able to afford mortgage loans, and existing small-town character will deteriorate.
“Everybody is allowed to approve their own plans - polluting the air and congesting the highway,” Jacque Whitsitt, a growth-control advocate and former Basalt councilwoman, said.
Right or wrong, governments make most decisions based on what’s best for the people within their borders, despite the potential impacts on their neighbors. Aspen, for example, is considering stricter growth controls.
Posted by Richard Barber on Feb 07 2007 under Colorado
On the other side of the Continental Divide, the housing market is a completely different story from the record numbers of Colorado foreclosures and inventories accumulating on the Front Range.
According to Dave Bittner, a mortgage broker with Re/Max Properties of the Summit, there were 610 listings in Summit County as of Jan. 22, about half as many as at the same time last year. Compare that with 3,820 listings at the end of 2001, and it’s clear that properties in ski country are trading at a record pace.
“The first half of 2006 we were red-hot. The second half, we’re just hot,” Bittner said.
The average price of a Summit County home has jumped dramatically, too, from $331,092 in 2005 to $380,717 in 2006, he said. However, this has not slowed Colorado mortgage demand in the region.
A student of statistics, Bittner said two-thirds of the properties in Summit County are secondary homes - half of those belonging to home buyers from the Front Range, the other half from investors worldwide.
Consider this statistic, too:
In 1995, no homes sold for more than $1 million in the county. In 2006, 172 homes sold for more than $1 million, the most expensive being $3.75 million.
Moreover, Breckenridge continues to be a hot submarket of this Colorado housing market. In 2005, homes appreciated an average of 33 percent, jumping from $300 to $400 a square foot.
“Now they’re headed for $500 a square foot, and the new stuff is $1,000 a square foot,” Bittner said. “What’s going on here is something Denver only dreams about.”
It’s true. The Denver home prices have been dropping since the last quarter of 2006. Until this changes, Colorado home loan activity will continue to lag behind the increasing popularity of Summit County.
Posted by Jed Moss on Jan 29 2007 under Colorado
More spending money in people’s pockets from a recent downward trend in energy prices and inflation could help both Colorado and the nation’s economy this year, the Pueblo Chieftain reports.
According to the head of the Federal Reserve Bank of Kansas City, Tom Hoenig, the United States’ GDP could grow by more than 3 percent this year if core inflation, which excludes energy costs and food prices, continues its decline.
Despite a difficult year for housing in 2006, experts anticipate home loan demand will creep steadily upward this year as the real estate market returns to normalcy.
“As I look at the data today, including right here in Colorado, we see the housing market stabilizing and the economy continuing to grow,” Hoenig said before a group of bankers, legislators and other state officials, including Gov. Bill Ritter at the state Capitol Wednesday.
Job growth in the region and nationwide continues to grow at a robust pace, Hoenig said, and the unemployment rate, which held steady at 4.6 percent in 2006, could increase slightly.
The bank oversees seven states including Colorado, Kansas and Nebraska. Hoenig also is a member of the Federal Open Market Committee, which helps set the nation’s interest rates - which, in turn, play a huge part in influencing mortgage rates.
Hoenig cautioned, however, that an increasingly tight labor market may be pushing workers’ wages higher, possibly renewing longstanding fears of unwanted inflation that may jack up Colorado mortgage rates and hamper economic growth this year.
Economists said last year that the Colorado housing market, as well as the state’s economy as a whole, was trying to recover from a slump it went into in 2001, when the state was hit hard by a national recession, the collapse of the dot-com industry, the September 11 attacks, drought, wildfires and the shift of some jobs overseas.
Economists predicted the state wouldn’t be fully caught up in 2007 and that barring a large rise in inflation, job growth would be less than 2 percent this year.
Posted by Richard Barber on Jan 26 2007 under Colorado
A new Colorado state law designed to help prevent millions of dollars in scams and fraud has officially taken effect - and already has prevented 10 people from continuing business as mortgage brokers, the Rocky Mountain News reports this morning.
Some 3,465 Colorado mortgage brokers have been required to register under the Morgtage Brokers Registration Act, which took effect on January 1, said Geoffrey Hier, spokesman for the Colorado Department of Regulatory Agencies.
Another 516 mortgage broker applications, as of Wednesday, were waiting to have background checks completed, one of the requirements for registration.
“It is too early to tell whether it is working because it has only been in effect for 16 days,” Hier said of the new legislation on Tuesday, adding that no matter what, it’s a positive step.
“If nothing else, we have some idea of who is out there, which we didn’t before. It’s a good start. We’ll never know how many people didn’t apply because they knew they wouldn’t qualify.”
Legislators passed the law last year after concerns continued to rise about record Colorado mortgage defaults and foreclosures, some of which can be traced to real estate scams and predatory lending.
A RealtyTrac study released Tuesday said that the Rocky Mountain State once again had the highest foreclosure rate in the country in December.
Prior to the passage of the law, Colorado and Alaska had been the only states in the nation with no regulations regarding mortgage brokers.
Under the new state law, brokers with federally chartered lenders and FHA home loan and VA-loan approved lenders aren’t required to register. The division of real estate so far has exempted 142 companies.
Those who register must be fingerprinted, undergo criminal investigations by the FBI and the Colorado Bureau of Investigation, and post a $25,000 surety bond, which typically costs about $200.
Also, there is a $200 registration fee, so the division has raised more than $680,000, which will be used to help administer the program.
Erin Toll, head of the state’s real estate division, also noted that for the first time, consumers can go to the Colorado Division of Real Estate’s official site and lodge a complaint against mortgage brokers.
One of those who was already denied is Steven Thompson, who in 2003 was accused of abusing buyers in the Colorado housing market and bilking residents out of $1 million-plus via his sophisticated mortgage scams.
Jim Spray, a mortgage broker himself and longtime advocate of cracking down on fraud amongst Colorado mortgage brokers, helped several homeowners in their efforts to investigate Thompson in 2003.
“If the others were denied for similar reasons as those which caused denial of Mr. Thompson, Colorado home loan holders should feel very relieved this new law is working as intended,” Spray said. “This seems to be getting rid of the worst of the worse mortgage brokers in the state.
“If someone can’t afford $200 to get a bond, they need to get out of the mortgage business and go work at a car wash. I have seen a million dollars disappear in mortgage fraud in a week.”
