Denver Real Estate Blog

Denver experiences improvements in the housing market

In the Denver Metro area the percentage of listed residential homes and condominiums that sold also improved, increasing for the fourth consecutive month.  Pending home sales in Denver look positive as well. According to the Denver
Metrolist, the number of pending home sales in the Metro Denver area rose 7.4 percent from March 2009 to April 2009. Pending sales improved nationally as well, improving 6.7 percent from March 2009 to April 2009 and 3.2 percent
from April 2008 to April 2009.

Average sold price improves for the Metro Denver area

The average sold price of residential homes and condominiums for the Metro Denver area fell 5.3 percent from
December 2008 to January 2009 when the average sold price was $213,330. Since then, it has increased every
month, with an average sold price in April 2009 of $233,482. Since January 2005, the largest monthly gain was in March 2009 when prices jumped 6.6 percent to $232,395. The largest drop came in January 2007 when prices fell 8.7 percent to $266,066.

New Home Builders

For the second consecutive month, national single-family starts rose 2.8 percent to 368,000 units during April
2009. Single-family permits, which is an indication of future activity, also increased, rising 3.6 percent to
373,000 units. Perhaps we are finally experiencing some of the benefits of the first-time home buyer tax credit.
David Crowe, the National Association of Home Builders Chief Economist agrees that it is one of the factors.
He said, “Very attractive housing affordability factors – particularly the federal $8,000 first-time home buyer
tax credit and other tax credits being offered by states for purchases of newly constructed homes – are helping
drive potential buyers back into the market” (www.nahb.org).

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.

Northeast Denver and southern Aurora had the most single-family home resales in the metro area at more than 1,000 in each area through May, according to Metrolist Inc. market-area data. Year-to-date home sales in that part of Aurora were 1,149, while northeast Denver sales were 1,115. Those sales, however, were down compared to the first five months of 2008 — from 1,376 and 1,182, respectively.

Still-strong areas with less than 1,000 home sales included southwest Denver (809), southeast Denver (759) and the central part of the northern metro-area suburbs (754), the Metrolist data showed.

The highest average selling prices for such homes through May were in the Boulder area — at $527,216 for the Boulder plains area and $663,311 for Boulder proper.

The mountain area of southern Jefferson County reported some of the lowest single-family home sales year-to-date, at two. Other low-selling regions included the mountain areas around Boulder (six) and northern Jeffco (15), as well as Louisville (22).

Lowest average single-family home sales prices were in areas such as southern Aurora ($92,230), southern Jeffco’s mountain area ($147,125) and the eastern part of the northern suburbs near Denver International Airport ($152,204).

Looking at condominium sales through May, southeastern Denver and southern Aurora had the highest at 619 and 453, respectively. Those sales were down from 786 and 659 in the same period a year ago, respectively.

Downtown Denver had the highest average selling price for condos for this year’s initial five months, at $431,249.
Some of the lowest condo prices were in the northern Aurora ($74,642), southern Aurora ($89,638) and central Jeffco ($99,483).

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.

DENVER HOME MARKET - When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It’s important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the
impact of higher interest rates can easily nullify any benefit of waiting for a lower price.

Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.  That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.

Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people
pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan. But buyers shouldn’t be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%.  And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just
five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded
more for their money.  For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.  If your clients are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, they could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.

Clock is Ticking on Free Money
If you are planning on purchasing their first home this year, be sure  to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000.  In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today’s market, this could be something that impacts you!

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.

Denver was named America’s No. 1 city on the verge of recovery from the real-estate slump in a segment Tuesday on NBC’s “Today” show.

Real estate expert Barbara Corcoran, a regular guest on the show, said Denver more than any other U.S. city is “clearly on a rebound.”

“It’s really the perfect real estate success story,” she said. “It had one of the highest foreclosure rates in the nation for years running, and now they’ve cut that foreclosure rate in half and they’ve turned the corner.”

Denver, Corcoran said, has “a vibrant downtown, it has a high employment base, it has educated people, it has youth, [and] it has one of the biggest park systems in the country.

“Everything about Denver is pointing up, up up,” she added. “Prices are moving up just now for the first time after seven years.”

Rounding out Corcoran’s list of cities poised for a real-estate rebound:

• 2. Raleigh, N.C.
• 3. Austin, Texas
• 4. Seattle
• 5. San Francisco

Corcoran said she included cities on her list on the basis of eight factors:

• Job growth potential;
• A growing population;
• Good weather;
• Lots of first-time buyers;
• No overbuilding;
• A vital downtown;
• A well educated population; and
• Foreclosures earlier than other cities.

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.

Law firm investigating reports of inflated appraisals.

SEATTLE ˆ Hagens Berman Sobol Shapiro announced today that it has begun an investigation of Richmond American Homes, a subsidiary of MDC Holdings (NYSE: MDC), based on reports from homeowners claiming the company may be engaged in agreements with Countrywide to inflate the appraisal value of Richmond American homes.

Homeowners report the company steered them towards Countrywide for home loan financing. Since the housing market‚s collapse, many homeowners now find themselves upside down on their mortgages and report Countrywide is unwilling to discuss loan modifications.

Based on reports, HBSS believes Richmond American Homes artificially inflated the home appraisal values of new homes with Countrywide, driving up home sale prices and pushing unsuspecting homeowners into dangerous loans.

Richmond American Homes operates Colorado, Maryland, Virginia, Arizona, California, Delaware, Florida, Illinois, Nevada, New Jersey, Pennsylvania, Utah and West Virginia.

According to the company‚s fourth quarter results for 2008, the company closed 944 homes at an average selling price of $300,300.

HBSS is interested in hearing from anyone who purchased a home through Richmond American Homes from 2006 to present and believes they paid an artificially inflated price. Homeowners can contact the firm at richmondhomes@hbsslaw.com, visit the Web site at www.hbsslaw.com/richmondamericanhomes or call (206) 623-7292.

Hagens Berman Sobol Shapiro will treat all information as confidential.

About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Boston, Los Angeles, Phoenix, San Francisco and New York. Since the firm‚s founding in 1993, it has developed a nationally recognized practice in class action and complex litigation. Among recent successes, HBSS has negotiated a pending $300 million settlement as lead counsel in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees which is awaiting distribution; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS also served as counsel in a $850 million settlement in the Washington Public Power Supply litigation and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. For a complete listing of HBSS cases, visit www.hbsslaw.com.

Denver home market  in terms of the number of Denver homes sold was up 5.7 percent to 3,390, and the median price of a single-family home in Denver was up 3 percent to $210,000, according to Metrolist data. The median price for a condo rose 1.2 percent to $130,000.

“More of the lower-priced homes are selling right now,” said Gary Bauer, a Littleton independent real-estate analyst. “A good share of those are first-time buyers.” But the number of sales was down 20.5 percent compared with last year’s 4,265. Prices for single-family homes are down 5.6 percent compared with last year’s $222,550.

While more than half of the homes sold were priced below $200,000, the upper-tier market is starting to show signs of life. Thirty-three homes priced at more than $1 million sold in April — the highest-priced was more than $4 million in the Denver Country Club area.

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.