What Will Real Estate’s Big Selling Season Bring?
With real estate’s traditionally busy Spring selling season right around the corner, what do we expect March-June to do for our market this year? Well as much as I’d love to say that we anticipate a sudden, overwhelming surge in sales and that all of our challenges are behind us, I won’t. What I can say is that we are seeing some bright spots thanks to heightened consumer confidence, following the recent legislation passed by the Obama administration. January and much of February had many buyers sitting on the fence as they awaited the results of the Economic Stimulus Package. The lowering of interest rates, induction and improvement of the home buyer tax credit, reduction in preventable foreclosures and reinstatement of the higher loan limits now have some buyers getting off the fence.
We’re definitely feeling the beginning effects of this, in many markets, with an increase in calls to our branch offices and Agents as well as increased traffic at our open houses.
But will this “interest” translate into closed transactions is the million dollar question.
Though none of us holds a crystal ball, I would say that we’re anticipating a moderate Spring. In markets hardest hit by foreclosures, we still have quite a few distressed properties to weed through before we can begin to work our way up. Our hope is that the recent passing of the foreclosure prevention plan will significantly reduce the number of foreclosures hitting the market over the next several months, and once this takes effect, we should be able to weed through the current inventory and start making our way through to the other side. In all honesty, this could take several months before we really feel its full impact.
For those markets impacted less by foreclosures and more so by Wall Street and the general state of the national and global economy, we’re really facing two main challenges: a lack of quality inventory and buyers who are struggling with whether or not to get off the fence.
Many buyers right now have misgivings about whether or not now is the best time to buy. Many are trying to time the market. My response to this is, it is very difficult to time a market. Just as you can’t time the stock market, you can’t time the real estate market. Real estate needs to be seen as a long term investment. If you plan to stay in your home for two, three or even five years, buying now probably makes good business sense. And that is solely if you are looking at purchasing a home from a business or investment purpose. But as we all know, purchasing a home isn’t just an investment. Home is where we live. Where we raise our families. Where we create memories. Rather than simply trying to time the market, we should be reminded of this fact and instead, focus on choosing the best home in which we can make that “life” happen. Of course, prosperity in real estate is how the majority of Americans have built their wealth in this country and I for one won’t overlook that fact but I do think it is important for all of us to reflect on the fact that beyond being a solid investment, our home is much more than that.
For buyers who are out there and are considering buying right now, if you plan to stay in your home for a long period of time, you probably can’t go wrong purchasing today. Though we anticipate moderate home sales in the near term, buyers are ultimately expected to respond to much improved affordability conditions as well as the $8,000 first-time home buyer tax credit and the market will pick up. It’s just a matter of time. And when it does, that pick up will translate into more competition, less inventory and possibly higher home prices, resulting in less purchasing power for you. Consider my advice: waiting may cost you.
And with that news in tow, let’s take a look at this week in real estate:
Boulder—Our Boulder office reports that the first week of March showed a jump of over 30% in both new listings and properties going under contract. Agents are still reporting that buyers are taking a long time to decide but after they see several listings they are moving ahead with contracts. Our Longmont office reports that the wonderful weather continues to hold and it plays directly into the increased showings. The price point of our showings was down this week—all under $319,000. Deals are becoming more streamlined. We are seeing short sales closing in three weeks as well as the FHA bottlenecks clearing up. Properties that are priced well are being shown. Properties that are priced great are being sold! One of our listings came on the market this week & sold this week with multiple offers. It is a good time to buy in Longmont. The rental market continues to be strong and investors are paying attention to this situation.
Conifer—Our Conifer office reports one new listing during the week. Four listings went under contract during the past week, one with multiple offers. Our showing activity continues strong with 33 showings during the week.
Evergreen—Our Evergreen office reported a total of two new listings for the week. Two listings went under contract and two buyers went under contract. We had 86 showings for the week plus five Agent previews. There are a few sellers that are now offering to exchange/purchase homes of buyers interested in their property if the buyers need to sell their home to purchase, i.e. swap home in Evergreen for one in Highlands Ranch. Creative deal making is flourishing.
Denver Central—Our Denver Central office reports that we have seen a slight increase in our under contracts—a direct result of all the activity and appointments we have set over the past couple of weeks. Buyers are still tentative, but confidence is growing as we help to educate the public on the market and the benefits of home ownership. We are having success with our onsite Home Buyer Seminars and have decided to hold them monthly.
Devonshire—Our Devonshire office is reporting a lot of activity. Lots of offers are being written and buyers are finding themselves in competing situations. Unfortunately, a real stumbling block right now is the banks and the lack of timely responses to offers. Our showing activity is up and we are seeing more listings coming onto the market every week. We are encouraging all of our sellers to really work on their curb appeal and get those pansies planted on garden areas and pots as landscaping looks very tired this time of year. Buyers perceive that homes are well cared for when they see colorful plants out front. We are still forecasting a fairly strong spring. It will be about the pricing for all homes on the market.
Douglas County—The Southwest Metro office reports that open houses were very successful last weekend. We had several Agents who had as many as 15, 20 or 25 groups through and they picked up several buyers and potential listing opportunities. We are seeing buyers ready to make decisions to buy now and not wait. Our mortgage rep is still busy writing approval letters for our Agents and with the increased traffic at open houses we feel very good about where the market seems to be heading.
El Paso County—Our Colorado Spring office reports that condo sales are up 31% over January and single family up 22% over January. Average sales prices jumped $10,000 in one month and verifies that listing prices are remaining firm. Open houses got better and ad calls were much better than last month.
Larimer County—The Fort Collins/Loveland/Windsor area continues to see slow but steady activity in all areas of the market. Property showings for our offices remain well over 250 per week, with listings going under contract at a steady pace. With Spring Break approaching we may see a bump-up in weekday showings as many folks are staying put for the school holiday. Weather outlook appears to be mild. Our area received additional encouraging news with regard to the recent release of 4th quarter 2008 statistics by the Office of Federal Housing Enterprise Oversight (OFHEO). Colorado moved to the 19th position in terms of national year over year change in value and the Loveland/Fort Collins metropolitan statistical area (MSA) reported just a .09% decrease in prices. This positions our area very favorably as an affordable market, highly attractive to future employers.
Loveland—See report for Larimer County.
North Metro—No information reported.
Parker—Our Parker office reported that we have added a number of great properties to our inventory again. The tour of our new listings created very positive feedback and most of those listings should create a lot of traffic and multiple offers soon. Since the total inventory in our marketplace is still dropping due to the number of expired and withdrawn listings, some areas are showing signs of a stabilized market. If the trends continue and the relation of new listings on the market to properties under contract shifts to a true declining inventory, we might see some areas actually increase in value within a few months.
Southeast Metro—Wow! Buyers are ready to move! Traffic at open houses continues to break all the rules for this time of year! We are averaging five showings during the first week that new listings are on the market. We will close on over 140 homes this month. Inventory between $200,000 and $300,000 is moving quicker than we can replace it and our luxury homes are seeing an increase in traffic as well.
As you can see, we really have a mixed bag. Some markets remain slow while others are seeing huge leaps in sales and contracts.
What I’ll leave you with this week is a reminder that, for buyers, opportunity is knocking this Spring. Buyers need to be aware of today’s advantages—attractive interest rates, increased affordability, sizeable inventory, increased loan limits, $8,000 first time home buyer tax credit and motivated sellers. The stars couldn’t be more perfectly aligned.
For sellers, pricing is key. Homes that are priced well (really well) and show well, are selling. Home that aren’t, sit. Consider this as you prepare your home for market and please, take my and your Agent’s advice, and don’t test the market. Price your home well from the beginning to generate the largest pool of potential buyers.
Until next week,
Make it a great one,
Chris Mygatt
President and Chief Operating Officer
Coldwell Banker Residential Brokerage Colorado
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