Denver Metro Single Family Housing Stats:
Active Listings: 8,356
- Down 39% from Jan. ‘11
Under Contracts: 2,838
- Up 13% from Jan. ‘11
- Up 16% Jan. ‘11
Average Price: $272,328
- Down 2 Jan. ‘11
Average Days on Market: 103
- Down 14% from Jan. ‘11
Denver Metro Condo Housing Stats:
Active Listings: 2,087
- Down 50% from Jan. ‘11
Under Contracts: 648
- Up 2% from Jan. ‘11
- Up 10% from Jan. ‘11
Average Price: $146,544
- Down 2% from Jan. ‘11
Average Days on Market: 108
- Down 12% from Jan. ‘11
Real Estate News
A metric we like to use at RE/MAX Alliance to gauge the strength of the market in the upcoming few months is the number of showings that have occurred per listing per month in the current market. Put simply – the more showings per listing, the more interest there is from buyers to purchase a home (you can’t sell a house you don’t show!). It’s a very handy formula to determine what the sales volume will be in the following few months. For example, during the period before the tax credit of 2010 expired (Jan. – April, 2010) there were 8.8 showings per listing per month, which translated into strong demand for properties and a lot of sales the following couple of months (turns out if you pay people to buy a house they’ll buy a house!).
Immediately after the tax credit expired buyer interest plummeted and there were only 4.7 showings per listing per month. This of course preceded a dramatic drop in home sales post tax credit. The lack of buyer interest continued in the period Oct. – Dec. 2010 when there were only 5.2 showings per listing per month. In the past year this number has creeped back into the 7-8 range, accurately predicting reasonable but not overwhelming demand for homes.
Fast forward to the present time and something very dramatic has occurred. In January, 2011 there were 11.2 showings per listing! This is an extraordinarily high number of showings. It’s even more remarkable because it occurred in January, a traditionally slow month. This tells me that an unprecedented number of buyers are out looking at properties and, if history is any guide, this should translate into a high number of closings in March and April.
Over time, this metric has been a very accurate predictor of future closings. It will be fun to monitor the market in the months ahead and I’ll be sure to report back how closely it predicted the upcoming housing market!
The single most important number for a homebuyer is your credit FICO score. For the good or the bad of it your FICO plays a major role in your ability to finance your home purchase. Therefore, it’s critical you understand what it is and what you can do to improve it. In a nutshell, your credit score is a snapshot taken by the three leading credit bureaus, TransUnion, Equifax and Experian, to help lenders determine what sort of credit risk you are. The lower the risk, the better the terms of your loan.
Your FICO is a number between 300 and 850 and is calculated by a complex algorithm assessing your past credit history. Most home lenders will consider a score over 700 to be excellent while scores below 600 are considered poor. The better the score the more credit will be extended, at better terms, with a lower interest rate. The best credit terms are extended to consumers with scores above 740. Therefore, it’s critical to understand what your FICO is and what you can do to improve your score. When I work with buyers I help them understand the inputs to their score so they can work to improve them. I can’t think of a better investment in your future than to spend a little time working on your FICO score. Here are a few tips I give my clients:
- Don’t max out your credit cards. Even running high balances can severely impact your FICO.
- Continue paying your bills on time.
- Don’t apply for new credit or cancel an old card because length of credit helps.
- Pay down high balances.
- Dispute and resolve any inaccurate items in your credit report.
As we enter the peak buying season of late spring and early summer, sellers are well positioned to take advantage of the market. We are currently at a 12-year low in inventory, with the least inventory clustered on the lower end of the market. While a “normal” market will have about 6 months of inventory, the Denver Metro area currently has only 3.1 months of inventory. What this means for you as a seller is that there are not many choices for buyers. When I speak to my friends and clients I ask them whether they think it’s a seller’s market or a buyer’s market and universally they say it’s a buyer’s market. Not so! The truth is it’s a strong seller’s market because inventory is at historic lows and prices are rising in the under $300k segment. So if you’ve been wondering if this is a good time to sell give me a call so I can research your area and give you a custom report on how this market is impacting your home.
Recently, a study was performed to determine the Return on Investment (ROI) for a variety of home improvement projects. Not surprisingly, some projects paid back more than others. What’s interesting to note is that almost NO projects had a positive ROI. Here are some of the improvement projects and the cost recouped at resale:
Attic bedroom – (converting unfinished attic space into a bedroom with bathroom and shower) Cost recouped at resale: 73%
Minor kitchen remodel – (including new cabinets and drawers, countertops, hardware, and appliances) Cost recouped at resale: 72.1%
Deck addition (wood) – Cost recouped at resale: 70.1%
Siding replacement (vinyl) – Cost recouped at resale: 69.5%
Replacing the entry door with a steel door – Cost recouped at resale: 73%
The very low ROI on remodeling projects might surprise you but it’s a truism in the industry that you make your money when you buy the property. There is no substitute for finding a great deal and executing on it. In today’s low-inventory environment it’s more difficult than ever to find that deal but this is what I do! Let me know if you’d like me to show you how I find great properties for my clients.
YCRE in the News
Your Castle continues to lead the industry in free, informative real estate education. We have a wide variety of classes on subjects like Denver Metro Real Estate Trends, First Time Home Buying, How to Invest in Denver Real Estate, Improve Your FICO Score, Home and Investment Driving Tours, Investing in Your IRA, and much, much more! Our classes are always free of charge and we NEVER sell anything – we just like to talk about real estate! To see our whole training schedule go to www.yourcastle.org and click on Training/Seminars. Or, call me and I’ll send you one email a week with our upcoming training calendar.
The mortgage market continues to remain strong for purchase and refinance loans, with interest rates still at historic lows. Low rates combined with historically low home prices are giving our buyers unprecedented opportunities to purchase first-homes, second-homes, and investment properties. In addition, the new HARP refinance program coming out in March will help many “underwater” homeowners refinance to today’s low market rates.
The Sloan’s Lake neighborhood is anchored by the beautiful 177 acre Sloan’s Lake where you will find residents year ‘round running, biking, playing tennis, fishing, water skiing, and generally taking advantage of this wonderful city playground. Bordered by W. 29th Ave., 17th Ave., Federal Blvd., and Sheridan Blvd., Sloan’s Lake has become a premiere community on the west side of town the likes of its neighbors Potter Highlands and Berkeley. With the majority of the homes built with old world craftsmanship it features many stunning 19th century homes that make it a home connoisseur’s delight. An easy 10-minute drive to downtown Denver and only 20 minutes to the mountains help make Sloan’s Lake such a convenient neighborhood to live in. Boasting mature trees, quiet streets, and well-maintained homes, it’s no wonder Sloan’s Lake is such a popular neighborhood!