Serious Information Regarding the Denver Housing Market!
The following link provides information on estimates about different housing markets across the country. Denver is among one of the top 20 in size and is closely followed by market analysts in the loan and mortgage insurance fields as well a stock analyst for building and material related stocks and funds. There are plenty of opinions in the market. Some are much more relevant than others.
There will always be a need and desire for housing in all of the price points. These price and supply issues became exaggerated based on a strong economy, hard to satisfy egos, the always buy more syndrome of the late 90's into the first 5-6 years of this century. This coupled with very, very easy to borrow money, the housing and general real estate market was pushed to high unsustainable levels in price, size and loan amounts. After the crash and its ongoing consequences, each of the previous mentioned issue are resetting and trying to find its market balance.
Yes, the prices have come down and in many cases, way down from just 18 months ago as well as the past 4 years. What is continually said by many of the market expert pundits is that we are near the bottom, possibly have hit bottom or may be getting close to the bottom. We have to have obtainable financing to have any possible balance in the home market as we have known it. Real estate values have been based on the the ability to purchase as much as any other item that has driven the market.
Consumers are still buying homes based on payments and what they think is a reasonable value. I have visited numerous new home developments over the past 90 days and the majority of the builders have sold off their past inventory of built homes(existing inventory) and are building new for buyers with solid commitments to them. The new home sales are solid with out the "got to sell mine first" contingency that plagued the industry in 2005 to 2008.
Many of the builders pricing has been reset lower since the builders have been able to buy land and developed sites at 30-50% of of the 2006 highs. This needed to have happened for the builders to be able to compete with resale component of the housing industry including the distressed sales of bank owned and short sales as well as extra motivated sellers which this market continues to pump a supply of out to the sales market.
The number of resale homes in the Denver area will still be around the 40,000 sale mark. Still a solid number. The well located and highly desired communities have held their prices better than the fringe areas. These have not made great headlines, the headlines have been all about home loss and and value decreases. There is till plenty of that type of headlines to follow.
Each of these market resets do provide a good incentive to buy this coming year. With low rates the sooner the better to lock in a low fixed 30 year rate. There are many almost new homes(1-5 years old) that are great buys, since they are priced lower than the new home replacement in a similar or same neighborhood. A buyer still has to find that home with the right colors and finishes, so that the home is attractive to them. The existing home seller needs to make their home as new like as possible, with as few negatives as possible, to induce the buyers and their emotions to buy that one versus some of the other choices.
I am continually asked about market growth as in when will prices stabilize and move up again. I have many thoughts and answers to this question as it is never a single simple answer.
If you are a buyer right now, you may be able to get an exceptional deal in price which in turn will have a high probability of price growth since it can be bought so well.
Many of the great deals are properties with lesser finishes that do not appeal to the market as strongly as a well upgraded and maintained home. The deals may also have a location challenge or may have been excessively over improved to the point that many of the excessive improvements cannot be recovered in price in this market.
A home is still where you come to everyday, where your family resides and calls home, where you have solace and a boundary from the outside, less caring world. It is a place that you call yours and that your family knows as the home base. Those are the intrinsic values that your home has that no other place that you visit actually can give you unless you own that too.
Values will go up and down but we still will want to own our home and enjoy all that it has to offer.
In my next article , I will discuss the need for many financial type loans to get the housing recovery working and to sustain a recovery as well as some of the abuses that had such a negative impact on the home market across this country.
As always, I welcome your comments and I appreciate your referrals of people that need my professional services to help them buy and sell houses.
I look forward to hearing from you.
Steve J