Market Headlines - Are You Worried?
July 14th, 2008 categories: Market Trends, Real Estate News
Yesterday afternoon, I got a text alert from The New York Times about the federal government’s plan to shore up Fannie Mae and Freddie Mac. Strange to get a NYT alert on a Sunday, just after their big edition hit the doorstep.
Maybe Not so Strange
The government worries about markets all over the world, not just in the U.S. They often time announcements around the opening bell at the Hong Kong market. After Hong Kong opens, markets begin opening in succession. Clearly, the government wanted to send a signal - don’t sell off U.S. securities, we’re handling it.
Eye on the Media
Today was a day we all kept our eyes on the market. What would happen to stocks? Bonds? Banks? Indy Mac was taken over by the FDIC, Fannie and Freddie needed government intervention and predictions of more bank failures followed.
As I said in my recent post The Good News and the Bad, I’m not so sure I always trust what the media has to say regarding the housing market. They do seem to have a bad news ax to grind. Today was an important day to pay attention though. Ax or not, when George Soros speaks, people listen. Soros was interviewed by CNBC and clearly believes that our economy is faltering. While times are definitely uncertain, remember that the more bad news we hear and read, the more likely it will become a self-fulfilling prophecy. Isn’t that what a bank run is? If you see 3 people lining up to withdraw their funds, don’t you line up too? Then there are four in line, then there are five. No one (understandably) wants to be the last one in line - and thinks, “I might as well be safe as sorry.”
The public good is served by the Fannie Freddie handout today. These quasi-public institutions bolster nearly all of the mortgage and housing markets. Left to falter, there would certainly be a crisis of unpredictable proportions. I read one article today stating that some home buyers are rushing to lock their loans thinking that mortgage rates will be going up soon. Put into perspective - I bought my first home for 9.5% and thought that was great - rates will probably tick up rather than race up. And hopefully won’t hit the highs of the 70’s and 80’s anytime soon. That will depend on the Fed’s reaction to inflation along with this banking crisis.
At the risk of sounding Pollyanna and head-in-the-sand, I’ll repeat what I’ve written here several times. Real estate is local and Denver’s market is out pacing most of the U.S. Our days on market are shrinking for certain segments of the market, and there have been several instances where I’ve heard of multiple offers.
People need a place to live, to call home. Worry too much and you may make uninformed decisions. Let the headlines inform you, not paralyze you.
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Denver Real Estate Stats - June ‘08
July 11th, 2008 categories: Market Trends, Real Estate News
Where is the Denver real estate market headed?
We’re asked this on a daily basis, and with the frenetic pace of the news reports, it’s sometimes a moving target. What I can tell you is that in my office, we’re processing more under contract files in the $300,000 to $800,000 range these days. Last year, it seemed like the high end properties were sustaining us. This year, the mid-range properties are selling best. Perhaps the jumbo loan rates has slowed down the high end market a bit, perhaps some people are electing to stay in their homes and remodel them.
That’s not to say high end isn’t selling at all, just that the more mid-range homes are the properties that are getting multiple offers and are moving more quickly.
In-town residences are still selling more strongly than suburban homes - In the medium and entry prices.
If you’re interested in finding out the walkability of any address just go to the Walk Score web site and enter an address. Central Denver residences are more walkable, and the price of oil will undoubtedly continue to influence the home buying decision.
The Metrolist market stats are out for June and you can see that we’ve shaken out a lot of the inventory we were carrying last year with actively marketed properties dropping 13.72%. With prices adjusting downward, numbers of pending sales are improving.
The number of closed properties increased from May, but decreased from this time last year. I’m betting the decrease year-over-year is due to a lesser amount of inventory. With the rising number of pending sales, we’ll likely see that number go back up next month.
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Colorado in Top 5!
July 9th, 2008 categories: Market Trends, Real Estate News
America’s Top States for Business
CNBC announced this morning that Colorado ranks #5 for top states doing business. This is the first time ever that Colorado has been in the top five. We love our state, our lifestyle and those of us who sell real estate here can tell you that we feel the optimism and enthusiasm in the market.
Colorado’s ranking qualifications were:
- Business friendly
- Energy economy
- Wind and solar
- Unemployment 4.9% compared to the national average of 5.5%
- Corporate tax rate 4.63%
- Largest industry - corporate and professional services (even without Arthur Andersen)
- Largest employers - Allstate Insurance and Lockheed Martin (Space Systems Divisions)
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The Good News and The Bad
July 6th, 2008 categories: Market Trends, Real Estate News
My husband is fond of saying, “I’ve got good news and bad news, which one do you want first?” Now, I tell him it’s all news to me, just deliver!
I think the Denver real estate market is full of good news and bad news too. About a week ago, I was asked to appear on ABC’s World News Tonight in a story about the real estate market. They told me it was a story stemming from the Case Shiller Report issued earlier that day. Denver was up nearly 1%, so they wanted a broker from Denver in their story.
Silly me, I thought it was going to be about the “turning” real estate market. That’s even what the assistant producer said to me on the phone. I gladly participated, and submitted to a lengthy interview. Fun and nerve wracking! Yes, it’s true, the camera does put on an extra 10 lbs. Or maybe those extras were already on…
They talked to me in front of one of my listings that had just received two offers, and then they followed me around another home nearby with a buyer in tow. 15 - 20 minutes of camera time was boiled down to 15 seconds in the story. My son and I sat down to watch - it was the lead story. In the intro they said, “Worst Real Estate Market Ever!”
My heart sank, “what have I done?” I asked. I’ve participated in prolonging the media obsession with how terrible the market is. The silver lining to the entire story is that I was the “silver lining”. Denver’s real estate market isn’t as unhealthy as other areas and buyers are making offers. The well priced, well located and beautifully staged homes are even getting multiple offers.
The media is going to pick up on the bad news and gloss over the good. Ask your Realtor what the true lowdown is, and get to know your own particular market. There’s good news and bad, but the truth lies somewhere in the middle.
| Discussion: 3 Comments »
Selling Your House for What You Need!
June 22nd, 2008 categories: Market Trends, Relocation Tips, Selling Strategies
In today’s Wall Street Journal section of The Denver Post is a column written by Jeff Opdyke. “A Trip - And a Change of Heart” tells the story of his unfortunate experience in trying to relocate to Hong Kong. Unlike the New York Times, WSJ blocks out online readers unless they subscribe, so I don’t have a link to the column.
Opdyke tells of the difficulties of selling his home, of finding the proper school situation for his children, and of locating a suitable apartment in Hong Kong. It sounds like is was a heart wrenching decision for his family, but they decided to pass up the opportunity after a fraught trip to settle the details.
There are probably many reasons why the decision was the right one for this family - international relocations can be difficult.
The rewards for some are huge, but it still causes upheaval. Much of my client base are relocating families, and several have been posted in China and Hong Kong. They describe such an acute lack of closet space that the extra shower becomes suitcase storage. They also describe the joy of finding peanut butter in the small local grocery mart.
A Realtor friend of mine, Bill Dolan, was so moved by Opdyke’s column that he wrote the author a letter in response. Bill noticed some very telling things about the comments Opdyke made regarding the sale of his home in Louisana. He’s given me permisson to reprint his comments, but I’ve edited them down a bit. You’ll get the gist.
Having worked with many corporate transferees over the years, I couldn’t help but take special notice of some select sentences from your article:
- “Nor can we afford to reduce our house price by the amount we’d need to move it quickly.”
- “We can’t afford to throw away tens of thousands of dollars in equity to facilitate a rapid sale.”
- “That leaves us no choice but to wait out the market.”
Real estate values have declined in every single area of the United States. In my opinion, before you even entertained the idea of moving to Hong Kong, you should have contacted three brokers and/or an appraiser to ascertain market value of your home and used that as a platform: if I jump, can I make it to the other side of the gorge? I am amazed at how few sellers are willing to accept or even try to understand the concept of “fair market value.”
- Your house would move quickly if you priced it at “fair market value.”
- You are not throwing away tens of thousands of dollars in equity to facilitate a rapid sale. You can’t throw away something that isn’t there to begin with. What you paid for your house, and what you owe against it are not relevant. The definition of fair market value is what a ready, willing and able buyer pays for a commodity. (As an aside, what do think the current fair market value of a large SUV is these days? Same as last year, or the year before?)
- You don’t need to wait out the market. If you are not willing to accept today’s “fair market value,” then take the home off the market until the market tells you that you have the equity you want or need to make a move.
I love this article from the New York Times. It is now part of my listing presentation. Over the years I have come to the conclusion that if a property is on the market for more than 30 days or has had 15 showings without an offer, then the price is too high (There are certain exceptions when it comes to very high-priced multi-million dollar properties.)
Good luck with your future relocations.
I’d like to call Bill’s comments an open letter to sellers. This is such a tough conversation to have with sellers. We Realtors aren’t without sympathy for your plight. We certainly wish you could “get what you need”.
I’m a little more patient than Bill seems to be. I generally say 20-25 showings and at least 30 days on the market is the test period. If you don’t have an offer after 25 bona fide buyers have walked through the door, then the price is too high. Your broker is doing his/her job if you’ve had that many lookers. The broker’s job is to expose the property and get traffic.
I’ve had sellers say to me, “Well, you’re just not convincing them to write an offer.” What should I do? Put a gun to their heads? Often the feedback is just disguised price objections. If the Buyer’s agent says that the house is on a busy street or needs too much work or looks outdated, then that’s a disguised price objection. A seller’s choice it to pick up and move the house or drop the price; update the house or drop the price. Sellers don’t like to hear this, and delivering the news isn’t the fun part of our jobs. It’s probably even worse than putting out open house signs…
So, thanks for sharing Bill. Good luck!
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Denver Real Estate Stats - May ‘08
June 18th, 2008 categories: Market Trends, Real Estate News
The Denver real estate market is like the old saw about a riddle wrapped in a conundrum wrapped in an enigma. I wish my crystal ball was working better, but I’ll have to rely on instinct, experience and my best guess.
Here are some statistics taken from the Denver MLS for May 2008:
The upshot is that we have 9 1/2 % fewer properties on the market than we did a year ago, and just .62 % more than the month before. The dreaded “over-supply” of inventory seems to be diminishing during the season one would expect to see more properties coming on the market, not less.
Days on Market
The number of days homes are on the market is shortening as well. The average number of days a house is on the market right now is about 100. This equates to a 3 month supply - what analysts consider a balanced market.
In the late 1980’s our market really took a tumble, mainly because the oil shale business dried up. As we look back on that time now, one of the leading indicators that the market was beginning to turn the corner was when number of days on the market shortened. First - fewer days on the market, next - less inventory, finally - prices stabilized.
Multiple Offers
One of the statistics you won’t see in the chart is that many homes are getting multiple offers. In fact, last night I received two offers on one of my listings. Check out LifeStyle Listings and see if you can guess which one, but I can’t tell you yet. One agent wrote a decent offer that still needs to be tweaked a bit, but we can work with it. Another agent brought an offer in excess of $100,000 off of the offering price. She said her clients wouldn’t reconsider their offer because they’d read in the papers that it’s a buyer’s market. I wonder how many offers that agent will be writing up for them…
Average Price
Yes, the average price is still down from last year. We’re pulling out of the slump, but we’re not out of it yet. It’s just a turning of the corner right now. We’ve also experienced a lower price point of homes getting offers than we did in 2007. In our office, the price point of homes that are selling quickly has recently been between $300,000 and $800,000. Last year our higher priced listings were selling much better. This fact alone could be what’s driving down the average sale price, rather than an actual decline of prices.
Stay tuned, these updates will follow monthly! If you like what you see at LifeStyleDenver, subscribe by email or RSS. It’s easy - just click on the buttons at the right of your screen.
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Buyers Beware - Market Turnaround Ahead
June 8th, 2008 categories: Market Trends, Real Estate News, Relocation Tips
Multiple offers? New listings gone in under a week? Is this the Denver real estate market?
Yes! In our medium price ranges, $250,000 to $800,000, things are going fast. I’ve had several brokers in my office tell me that they’ve been in competitive bidding situations recently. More than one - sometimes they’ve actually had two or three competitive bids on houses for the same buyers. That must be surprising for buyers who read the main-stream media and think they should still be underbidding for everything.
Buyers - you need your broker’s advice more than anytime now. Ask to see recent comparable sales in the neighborhood you’ve identified before you make an offer. Sometimes a house is already competitively priced, or at least well-priced. Sometimes there’s room for a bit of negotiation, sometimes there’s room for a lot.
Another important piece of information to know about a house is how many days the house has been on the market. A short time on the market usually indicates less room for negotiation. A short time on the market and well-priced means very little room for negotiation.
If the house you love is also in tip-top condition, recently remodeled or brand new, then there is more of a chance it will sell quickly.
When we see multiple offers, there are usually 3 things in common:
- They’re well-priced.
- They’re in Central Denver neighborhoods - not so much the suburbs.
- They’re in top showing condition.
Buyers who buy today are going to look back a year from now and find they’re sitting in the cat-bird seat. That’s when we’ll all realize the market turnaround began in the summer of 2008.
| Discussion: 4 Comments »
8 Ways to be Green
May 27th, 2008 categories: Market Trends, Random Thoughts
1. Use Reusable Shopping Bags
Switch from paper and plastic and bring your own bags. This one change will have the most immediate and dramatic impact on the environment.
- The oil it takes to produce 14 plastic bags will power your car for a mile.
- Paper is not better. Annually 10 million paper bags consume 14 million trees.
Check out: www.reusablebags.com and www.betterbagscolorado.org. If you’re a client of mine, I have Kentwood reusable bags for you! Just let me know how many you need.
2. Replace Your Light Bulbs with Compact Fluorescent (CFL) Light Bulbs
They last 10 times longer and use 1/4 less energy. Dispose of the CFL bulbs properly, they contain trace amounts of mercury. You can take them to Ace Hardware stores. Also try LED’s (Light Emitting Diodes) - no mercury. Remember to turn off the light when you leave the room.
Start with your porch: www.porchbulbproject.org.
3. Use Earth Friendly Cleaning Products
The EPA says air pollution indoors may be 2-5 times higher than outdoors. Try making your own cleaning products to cut down on chemicals.
All Purpose Cleaner: 1/2 cup Borax (look in the laundry aisle) to 1 gallon hot water, mix in a pail or use smaller amounts in a spray bottle (1/8 cup Borax to 1 quart hot water). Dissolve the Borax completely and wipe surfaces clean. This also works with Arm & Hammer washing soda to 2 cups very hot water.
Glass Cleaner: 1/4 cup white vinegar or 1 teaspoon lemon juice to 2 cups water in a clean spray bottle. Wipe surfaces with newspaper.
Soft Scrub: Mix liquid detergent to 1/2 cup baking soda until it’s the consistency of frosting. Use on sinks, showers and stainless steel.
Buy Seventh Generation or Clorox Green products.
4. Save Water
Turn off the water when brushing your teeth and you’ll save about 25 gallons of water a month.
Limit your showers to 5 minutes.
Implement xeriscaping (not zero scaping!) 35% of our water is used for lawns.
Check out low flow shower heads, toilets and faucets.
Only run your dishwasher when it’s full.
5. Calculate Your Carbon Footprint
What is it? How big is it? Flying, driving and tossing out garbage emit greenhouse gases. You can measure your household’s impact on the environment and learn how to reduce it.
Learn more at: www.carbonfootprint.com and www.begreennow.com.
6. Recycle
Take advantage of your neighborhood recycling programs and buy recycled products whenever you can.
Here’s more: www.rbrc.org and Colorado Recycles.
7. Conserve Energy
Turn down the temperature on your hot water heater to 120 degrees. Unplug your appliances or plug them into a “smart” power strip and turn it off when you’re away.
Clean your furnace and change the filters, and consider having your home audited for energy use.
Park your car for one whole day a month.
Set your thermostat at 68 degrees or cooler in the winter and 78 degrees or warmer in the summer.
Find additional savings and rebates at: Energy Star and Excel Energy.
8. Gardening Ideas
Find a place in your garden to compost your trash. Compost helps keep weeds at bay and saves water. Water lawns early in the morning and mow late in the day.
Look for xeriscape plants.
Avoid synthetic fertilizers and pesticides.
Have fun being green ~ it’s good for you and not as hard as you may think!
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Harley Tells it Like it Is!
May 16th, 2008 categories: Market Trends, Random Thoughts
I’m in Washington, DC this week at the NAR Mid-Year meetings. This is the 100th year of the National Association of Realtors and the 105th anniversary of Harley Davidson.
Yesterday, I opened the hotel’s USA Today and this is the ad I saw on the back of the Business Section:
We Don’t Do Fear
Over the last 105 years in the saddle, we’ve seen wars, conflicts, depression, recession, resistance, and revolutions. We’ve watched a thousand hand-wringing pundits disappear in our rear-view mirror. But every time, this country has come out stronger than before. Because chrome and asphalt put distance between you and whatever the world can throw at you. Freedom and wind outlast hard times. And the rumble of an engine drowns out all the spin on the evening news. If 105 years have proved one thing, it’s that fear sucks and doesn’t last long. So Screw it. Let’s Ride.
An article in Milwaukee Journal Sentinel online reviews this brilliant ad campaign, and Harley Davidson’s counter to the bad news in the press.
I’m hanging the full-page ad in my office work room when I get back to Denver!
(I originally posted this earlier today over at Active Rain)
| Discussion: 5 Comments »
Ambulance Chasers Attack Realtors
April 24th, 2008 categories: Market Trends, Real Estate News
I got this email today regarding an underhanded maneuver by the Colorado Trail Lawyers Association (aka Ambulance Chasers):
Before you read about it in the paper, we wanted you to be aware of a new ballot initiative filed that would limit commissions for real estate brokers. It’s a sliding scale but still no good. Here’s the breakdown: 6% = up to $250k; 3% = $250-500k; 1% = above $500k.
This initiative is brought by the Colorado Trial Lawyers Association. They filed #109 and seven other initiatives as a response to another initiative dealing with capping attorneys fees.
You wanted to be there. See Gretchen blow her top.
Here are my thoughts on this unfortunate ill-advised action. Go sell your house yourself! Pay upfront for the marketing, the photography, the brochures, the website(s), sit the house open weekend after weekend. Call yourself and explain why the market is flat and you haven’t had a showing in weeks. Network with all of the Realtors you know because most likely the buyer will be the result of a co-op from a broker. Work for a bank and watch them already cut your fee (I’ll bet they don’t for your representation of their foreclosure actions).
Trial Lawyers fight every year when legislators and the general public try to put caps on awards or damages. They certainly don’t want their fee cut. Do you know what the routine percentage a lawyer earns if a case goes to trial? 40% of the award or damages. 50% if there’s an appeal, and 33% if the case is settled. Joe Blow gets run over by a truck and his life is ruined. He’s awarded $1 million to live the rest of his life. His lawyer walks with $400,000.
Is this a reaction to the mortgage crisis? Are the lawyers in the pockets of the banks who for the most part got us into this mess? Lawyers are representing banks everyday in foreclosure actions, and getting paid hourly. I get paid peanuts for the hours of work I put in. We’re spending money on our credit cards to market properties that may take months to sell, and then we pay a co-op to the buyer’s agent and a split to our company. Lawyers representing banks have a vested interest in this crisis stretching out for as long as possible. Realtors are actually trying to alleviate the problem by getting properties sold.
I don’t make money off of other people’s misfortune. I actually lost money last year when I helped a friend/client out of a mortgage mess brought on by a divorce and job loss. It was such a stressful time for my client that not only did I advocate for him with the bank to take a short sale, I marketed his house and paid for his inspection items out of my own pocket to get him out of the home. I am not a vulture. I am paid a fair wage and deserve to make a living just like an ambulance chaser does.
Something seems wrong with this picture. The CTLA, the alleged advocate for the underdog, is attacking Realtors in favor of banks and mortgage companies?
If this initiative passes, I’m sure the lawyers will be waiting in line to represent us to overturn it as unconsitutional. I’ll ask, “will you take 1/6th of your fee?”
| Discussion: 9 Comments »
