The Opportunity

Truth be told, there is a world of opportunity out there. Let’s just share some of it with you:

• Historically low interest rates (click here to see the chart from the St. Louis Fed)
• When you add the cost of money and inflation, real interest rates (the return on money over inflation) are negative.
• So, it is unlikely one will see interest rates drop lower from here.  You should be locking up long-term fixed rate loans NOW.

• 1 in 3 Homes in the USA has NO MORTGAGE, meaning they are not at risk for bank foreclosure
• Denver listing inventories are 6.2% lower than they were in 2006, (March 2006 vs. March 2008). 
• Local radio host Mike Rosen added an important point to that statistic: if total listing inventories are lower, then the percentage of total homes listed is even lower than that.  After all, there are more homes in 2008 than in 2006, so the percentage of homes listed is comparatively lower in 2008 compared to 2006.
• According to the Government’s OFHEO Home Price Index, Denver homes only lost 0.5% of value last year, but are up 10.13% in the past 5 years – by the way, the 5 years subsequent to the 2001 – 2002 tech implosion. 
• That is UP despite a huge employment setback in the early part of the decade.
• The Denver market is at 5.6 months of inventory for homes less than $500k; that’s a Seller’s Market; at 5.6 months, that is just slightly favoring the Seller.  However, not strong enough to firm up prices. 
• Three market segments are already Seller Markets:
• Less than $100k – 4.7 months of inventory (and trending stronger)
• $100k to $200k – 5.0 months of inventory (and trending stronger)
• $200k to $300k – 5.1 months of inventory (and trending stronger)

• Current under contract activity for single-family homes in Metro Denver is running nearly double the trailing 12-months’ average.
• Homes under contract as of May 2, 2008:  6,299
• Average homes sold per month (trailing 12 months): 3,143
• Percent change: 100.4% improvement
• The Denver market is performing about 33% to 40% better than the national market; depending on the measurement used.
• Denver total months of inventory – 6.7 months  (6.0 months in the 20 main communities in the metro area)
• National total months of inventory – 9.9 months

So, what do these numbers tell you? I hear two things: Lowered supply combined with increased demand.  I will let you draw you own conclusions. Look at your local gas pump to use a meaningful analogy.