Wall Street's in turmoil, having taken its biggest hit since 9/11 with a 500 point drop, but things are looking stable for Denver's Real Estate market, according to the Denver Post:
Colorado's largest mortgage lender is making it easier for homebuyers to borrow money.
Wells Fargo Home Mortgage on Saturday upgraded the status of the Denver metropolitan area's real-estate market from "distressed" to "stable."
"The fundamentals in the Denver market are changing," said Greg Osborne, regional vice president of the mortgage company. "Inventory is being worked down, and as a result, prices are stabilizing."
There were 24,648 homes on the market last month, a 20 percent drop from August 2007's 30,827 homes, according to data released last week.
The improved status of the market means consumers can borrow 5 percent more than they previously could, Osborne said.
"I am hopeful that it will stimulate demand by increasing confidence in our market," he said. "We may have led the nation into the doldrums, but we're again leading out of the doldrums."
Jim Theye, managing broker for Kentwood City Properties, said the move could signal that the market has hit bottom and is showing signs of improvement.
"This will really help buyer confidence, and it will really help rekindle a positive market," Theye said. "Our brokerage is definitely seeing increased activity."
Dee Chirafisi, also of Kentwood City, said she expects other lenders to follow Wells Fargo's lead.
"If they loosen up on some of the guidelines and make it easier for people to get loans, that will start activating the market," she said.
Lou Barnes, owner of Boulder West Financial Services, said the negative perception of Denver's market has been misplaced.
Barnes points to the PMI Mortgage Insurance Co.'s risk index, which says Denver has a 1 percent chance of home prices falling. That's far better than the 35 percent chance of prices falling that PMI forecast for the region in 2003.
"Despite Denver's high foreclosure count, as a matter of price decline and underwriting risk, our greatest exposure was at the moment the tech bubble blew back in 2002," Barnes said.
Jerry Kaplan, vice president of capital markets for Cherry Creek Mortgage, said the Denver market has been stable since June.
"Fannie Mae and Freddie Mac removed Denver from their declining-market list several months ago," Kaplan said. "There are certain pockets around the area that have a higher concentration of foreclosures, which in that immediate area is driving prices down."
The Standard & Poor's/ Case-Shiller U.S. National Home Price Index dropped 15.4 percent for the one-year period that ended in June. Denver, however, was down only 4.7 percent for the period and has shown three straight months of price growth.
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