Are Happy Days Here Again?
We awoke Thursday morning to some very positive economic news-Wells Fargo reported a better-than-expected first quarter profit of $3 billion surging the company's stock by 32% and boosting shares of many other big banks as investors bet that Wells Fargo's peers may also post results that exceed Wall Street's estimates. The hope by all involved is that the banking sector is stabilizing. Much of Wells Fargo's recent success is in part related to the recent increases in mortgage loan applications which could be a strong sign that consumer confidence is on the rise.
Also revealed this week is the fact that new jobless claims fell more than expected. The Labor Department said Thursday that the tally of initial jobless claims fell to a seasonally adjusted 654,000 from a revised 674,000 the previous week. Analysts expected claims to drop to 660,000
This week there were so many positive headlines that, rather than provide you with my ongoing synopsis, I thought I'd give it to you straight from the horse's mouth. Yes, even the media is now on board with the positive headlines which tells me that the market is definitely changing.
- New jobless claims, trade gap fall; retailers see signs of hope; http://www.usatoday.com/money/economy/2009-04-09-jobless-trade_N.htm
- Big rally on Wall Street; http://money.cnn.com/2009/04/09/markets/markets_newyork/index.htm?postversion=2009040918
- The case for buying a home right now; http://online.wsj.com/article/SB123913901841798375.html
- With affordability up, home buyers are returning to the market; http://www.nahb.org/news_details.aspx?sectionID=0&newsID=9000
- Outlook on economy is brightening; http://www.nytimes.com/2009/04/07/us/politics/07poll.html?_r=1&scp=23&sq=economy&st=nyt
- Real Estate Outlook: Promising Numbers; http://realtytimes.com/rtpages/20090407_realestateoutlook.htm
- Denver: 10 Cities Where Americans Are Relocating; http://www.forbes.com/2009/03/30/americans-moving-cities-lifestyle-real-estate-relocating_slide_2.html?thisspeed=25000
And with that very exciting and uplifting news in tow, let's take a look at this week in real estate:
- Boulder/Longmont-Our Boulder office reported new listings continue to rise in the Boulder market, especially condos but sales are increasing as well. Sales in the Boulder market are up 36% from the week before. New listings are up 48% week over week. A front page story in the newspaper today shows 1st quarter single family home sales in the 1st quarter of 2009, down 50% from 2008. Prices up 0.4%. Prices also up in Louisville (0.9%), Superior (4%), Erie (4.2%) and Lafayette (6.9%)! Sales were up 15.9% in Broomfield, but prices were down 5.7%. Figure that out!
- Evergreen/Conifer-Our Evergreen office reported we had a total of four new listings for the week. Of the three listings that went under contract, two are short sales. There were 60 showings for the week. We had five buyers put under contract during the week, but only one was a bank owned property, the others were normal sales. One contract is for land ($400M), two are for homes priced in $175M range, one home is at $400M and one REO is priced at $900M.
- Denver Central-We have seen a big increase in activity in March/April. With interest rates so low, buyers and investors are purchasing properties. We continue to see a marked reduction in inventory. Number of days on the market continues to drop. Our office average is 82 days.
- Devonshire- Our Devonshire office reports that once again we are seeing a surge in showing activity which indicate that buyers are jumping off the fence and into the market. All of the economic reports and the news coverage seem to indicate that the bottom is here or near for home prices and buyers are hearing the news, therefore moving ahead in their search for homes. The federal government first time home buyer tax credit is helping to create momentum for buyers. As the listing inventory decreases, sellers are seeing that this is the time to get their own homes on the market. They don't want to miss this surge in buyer activity. I would say that this spring should show a considerable surge in sales. We look forward to a productive summer.
- Southwest Metro - Our Southwest Metro office reports that showings were down a little last week due to the weather, especially Friday and Saturday. We are still seeing buyers looking and writing on properties. We had several Agents that had buyers looking and then writing on properties. We had several Agents with buyers that wrote on properties where there were multiple offers. Recently we are seeing properties going close to their list price. Sellers are now looking into listing their home this month or in early May. Our mortgage rep is still very busy taking loan applications and approving buyers. Open houses and floor calls are still going strong.
- El Paso County-Colorado Springs reports that the weather has slowed the market a bit but board sales remain good, as do ours. Commercial vacancies are still growing and unemployment here is growing fast.
- Larimer County-Activity is up and multiple offers are coming in on well-priced homes. One Agent reported three offers on a new listing that had only been on the market for one day. Consequently, the property went for above asking and the sellers were thrilled. Buyers will come out of the woodwork to see well priced homes in the area. Showing activity has been steady and the spring season is bringing additional inventory to the market. Home prices are stable. Prices have been virtually flat or only slightly down for the last several years and with exception to short sales and foreclosures, the market appears to be at or very near the bottom. Given what has been happening on both coasts as well as Arizona/Nevada, we are fortunate our prices have remained comparatively stable. Homes in this area represent an excellent value for today's home buyer.
- North Metro-No information reported.
- Parker, Douglas and Elbert Counties- Although we set a new record for listings under contract for the month of March, our inventory increased slightly because we added another high producing team to our sales force. Showing activity has been the highest since 2006! Our number of showings increased by over 100 in one week! We still receive multiple offers on power priced listings. Last week's record was 14 offers on one listing within the first four days on the market.
- Southeast Metro-In the southeast area we are seeing a steady increase of activity in the luxury home market. Inventory overall is increasing and there is fierce competition in the price point $200,000 and below. Buyers are moving quicker to write offers. Spring has sprung!
- West Lakewood-Many sellers are still unreasonable regarding their price. One Agent in particular felt he priced a home well, however the feedback from Agents is that it is substantially overpriced. Another Agent would not take a listing because the seller was unwilling to price for the market. Buyers do not seem to know the market is changing. They still think everything should be a "steal." In the $200,000 - $300,000 range the market is still saturated with short sales and foreclosures. The stimulus package is working in the lower price points. It will take time to have it work upwards in the higher price points.
Now what should we do with these positive stories? Don't look a gift horse in the mouth! Spread the word. One of the biggest challenges hindering our sector right now is low consumer confidence. We've just finished three years of a very gloomy and challenging time in United States real estate. And while this optimism can't yet be explained by official statistics, which lag behind the current market by 30-60 days, pendings are up in many markets and units sold are certainly on the rise. It's time to target our family, friends and clients alike and educate them on the opportunities and possibilities in today's market. The time is right now. The market is poised for a rebound. With the $8,000 first time home buyer tax credit, the historically low interest rates, the high rate of affordability-we couldn't be in a better position for a rebound. Read my lips: spread the word! Tell your friends. Tell your family. If you're considering buying a home, now may just be the perfect time.
Next week I will be taking a brief hiatus from Weekly Market Watch. I'll return the following week with another exciting, robust edition.
Until next week,
Have a great one,
President and Chief Operating Officer
Coldwell Banker Residential Brokerage Colorado