Re Bubble

The activity in the Front Range market is causing us to hear the bubble question again.

People are curious to know, based on recent growth in price appreciation, if we are in a housing bubble.

This questions seems to crop up when prices go up.

While we do not believe that the current double-digit price appreciation is sustainable, we firmly believe we will not see prices crash or see any kind of a bubble bursting.

Here’s why we think that…

This past Tuesday we hosted a private online event for our clients which featured our Chief Economist Matthew Gardner.

Matthew is well-known and well-respected in the industry.  He is often quoted in leading real estate publications.

He sees four reasons why there is no real estate bubble that is about to pop in Colorado.

  1. Inventory is (incredibly) low. The number of homes for sale is down over 40% compared to last year. The market is drastically under-supplied.  Based on simple economic principles of supply and demand, inventory would need to grow significantly for prices to drop.
  2. Buyers’ credit scores are very high. The average credit score for buyers last month, for example was 759. So, by definition, average buyers today have excellent credit which means there is low risk of them walking away from their mortgage and causing a foreclosure crisis.
  3. Buyers have high down payments. On average, buyers are putting 18% down on their purchases. This means that prices would need to fall by a considerable amount in order for the average buyer to be ‘upside down’ on their mortgage.
  4. Owners are equity rich. Well over a third of property owners along the Front Range have more than 50% equity in their homes. This means that a severe economic downturn causing a slew of distressed properties to hit the market is highly unlikely.

Bottom line, as Matthew Gardner reminded us, what we are experiencing in the economy today is a health crisis not a housing crisis.

If you would like a recording of the private webinar, we would be happy to send it to you.  Just reach out and let us know.


Posted on October 9, 2020 at 1:03 pm
Paul Hunter | Posted in About the area, Blog, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , , , , , ,

Stat of the Month

We just completed a review of the September numbers in our market.

Here is the one number that is standing out to us- average price.

Prices are way up over last year.  Here are the specific average price increases in each of our markets compared to September 2019:

Metro Denver = 13.2%

Larimer County = 16.9%

Weld County = 7.4%

This change in prices has of course generated questions from our clients.

To help our clients answer questions about prices and other real estate topics, we have set up a private online event with our Chief Economist Matthew Gardner.

The event is set for Tuesday from 9:00 to 10:00.

Simply reach out to any Windermere broker to receive your registration link.

Matthew will be addressing these questions as well as many others:

What effect will the election have on the economy and on real estate?

How long can interest rates stay this low?

Can prices keep appreciating at their current pace?

This online event is for the clients and friends of Windermere.  If you would like to register, please connect with your Windermere broker.


Posted on October 2, 2020 at 12:59 pm
Paul Hunter | Posted in About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate | Tagged , , , , ,

Pendings are Popping

Temperatures may be cooling off but the Front Range real estate market is not.
Typically the market starts to slow down a bit in the Fall after a hot Spring and Summer.
Not this year.
The indicator we use to measure future closed sales is current pending sales.
Simply, we look at the number of properties under contract and scheduled to close versus the same time last year.
Current pending sales are way up along the Front Range when measured against 2019:
Metro Denver up 34.1%
Larimer County up 48.6%
Weld County up 50.2%
Based on these numbers, closed sales numbers over the next 60 days will be very strong.


Posted on September 18, 2020 at 12:42 pm
Paul Hunter | Posted in About the area, Blog, Buyer Tips, Friday Fun Facts, Real Estate | Tagged , , , ,

New Home Surge

Sales of new homes have jumped to their highest levels in 14 years.

The annualized rate of single-family new construction homes is now at 901,000 according to the new Census Bureau report.

This means that across the U.S., at the current pace of sales, there will be almost 1,000,000 new homes built and sold over the next 12 months.

This pace is 36% higher than one year ago and the highest it has been since the end of 2006.

Given the low inventory levels of previously-owned homes that most of the Country is experiencing, this uptick in new home activity is welcome news.


Posted on September 4, 2020 at 9:05 am
Paul Hunter | Posted in About the area, Friday Fun Facts, Real Estate, Uncategorized | Tagged , , , , ,

Start it UP!

Start it Up

As further evidence that the housing market is more than alive and well, new home starts have recently jumped across the U.S.

Building of residential properties is up 23.4% compared to last year and up 22.6% from last month.

Pre-pandemic demand for new homes was very high. Now, record-low interest rates are fueling the market to new highs.


Posted on August 21, 2020 at 8:40 am
Paul Hunter | Posted in About the area, Blog, Buyer Tips, Friday Fun Facts, Real Estate | Tagged , , , , ,

Rebound

The Case-Shiller Home Price Index tracks appreciation in the 20 largest real estate markets across the U.S.

Their most recent quarterly report was just released this week.

Metro Denver prices are up over last year by 3.89% which is just slightly higher than the average of the 20 markets.

It is interesting to see how the 20 locations have performed since the pre-Great Recession housing peak.

Turns out that Denver has done the best out of all the markets.

Since 2008, Denver home prices have appreciated 64.9%. Second-best is Dallas at 55.5% and Seattle is third at 41.2%.

Believe it or not, there are markets where average home prices have still not returned to their 2008 levels.

Las Vegas is 14.5% below 2008 and Chicago is 12.8% below.

These numbers are another indicator of the long-term health and performance of the Front Range market.


Posted on August 7, 2020 at 9:40 am
Paul Hunter | Posted in About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , ,

Spring in Summer

This year the Spring market is occurring in the Summer.

Typically the busiest months for real estate along the Front Range are April, May and June.

This year, because showing activity was restricted in the Spring months, we are seeing robust activity this Summer.

Here’s an indicator.  Sales through July 2020 versus July 2019 are up:

12.6% in Metro Denver

13.7% in Northern Colorado

To see double-digit increases in sales despite was is occurring in the National economy, is nothing short of remarkable.


Posted on July 31, 2020 at 8:30 am
Paul Hunter | Posted in About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate, Seller Tips | Tagged , , , , , ,

Housing Math

It’s interesting to look at what population growth means for housing.

On average, along the Front Range, 2.5 people live in each housing unit.

What that means is 4 housing units are needed for every 10 people who live here.

So, for every 1000 new people moving to our area, 400 new housing units are required.

The population of Metro Denver is just under 3,000,000 and the population of Northern Colorado is just over 650,000.

Assuming the Front Range grows in population at 2% per year, that means 60,000 new people in Metro Denver and 13,000 new people in Northern Colorado each year.

To house those people, 24,000 new housing units need to be built per year in Metro Denver and 5,200 in Northern Colorado.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously.  Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.


Posted on July 17, 2020 at 9:30 am
Paul Hunter | Posted in About the area, Blog, Friday Fun Facts, Investment, Real Estate | Tagged , , , ,

Not Taxing

Pop quiz…

Which state has the lowest effective property tax rates?

It’s not Colorado. But, if you guessed Colorado you’re close!

Hawaii has the lowest effective rate at .27%.

Colorado is ranked 3rd at .53%.

New Jersey is the highest at 2.47%

So, Colorado’s property tax rate is one fifth of New Jersey.

It’s also one third of Michigan and Ohio, and one half of Oregon and Washington.

The out of state clients we work with are usually pleasantly surprised that our local property tax rates are so much lower compared to where they are moving from.

It’s another benefit of owning real estate here.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.


Posted on July 3, 2020 at 2:39 pm
Paul Hunter | Posted in About the area, Buyer Tips | Tagged , , , , , ,

Caught Up

We’ve been waiting for June to catch up. It finally happened (almost).

Back in April, real estate activity was significantly limited and the showing of property was restricted which caused the number of closed properties in May and early June to be much lower than last year.

Bottom line, fewer properties going under contract in April caused fewer closings 30 to 45 days later.

Closed properties in May were down compared to 2019 by 44% in Northern Colorado and 43% in Metro Denver.

Then activity jumped significantly in May. The number of properties going under contract was way up compared to last year.

We’ve been wondering when we would see this sales activity reflected in the number of closed properties.

Well, it finally happened (almost).

The number of closings so far in June compared to the same time period through June of 2019 is only down 1.8% in Northern Colorado and 1.6% in Metro Denver.

In both markets, there are only a handful of closings separating activity in June 2020 versus June 2019.

By the end of the month, when all the transactions are tallied up, we expect that June of this year will out pace June of last year in terms of number of transactions.

This is significant not only because of COVID-19, but also because of the reduced inventory compared to last year. Quite simply, there are fewer homes to buy.
All of this speaks to the health and resiliency of the Front Range market.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.


Posted on June 26, 2020 at 1:35 pm
Paul Hunter | Posted in About the area, Homes for Sale, Real Estate | Tagged , , , , , , ,