Denise Wambsganss
Realtor
303-880-8771
dwambs@msn.com







Thursday, October 28, 2010

Denver Housing Market update

Case-Shiller: Denver down 1.2%
http://insiderealestatenews.com/2010/10/case-shiller-denver-down-1-2/#more-8240

John Rebchook

The Denver housing market was near the middle of the pack in August, ranking No. 11 of the 20 metropolitan statistical areas tracked in the closely watched S&P Case-Shiller Home Price Indices released today.

The Denver housing market posted a 1.2 percent decline from August 2009, compared with a 1.7 percent gain for the 20 cities in the index and a 2.6 percent gain for its Composite-10 index. The index tracks "matched-price pairs" of single-family homes.

In August from July Denver's overall housing market showed a 0.1 percent decline, compared with a 0.2 percent drop for Composite-20 index. Denver's drop was the same as the 0.1 percent decline for the Composite-10 index.

High unemployment remains the culprit

Larry McGee, principal of the Berkshire Group, said the lull in the market comes down to unemployment and a lack of consumer confidence.

Currently, there are 14.8 million unemployed people in the U.S, compared with 7.2 million three years ago, according to government statistics.

In addition, about 7 million people nationally are having "some degree of difficulty," with their home loans, McGee said.


7 million more jobs needed


"What is the psychological and financial impact of that? Really, there is nothing else to say beyond (the unemployment numbers)," McGee said." It is what it is. I think all of the reports and statistical reports like Case-Shiller - or any other one you might read - will reflect the impact of unemployment and the lack of consumer confidence. I think if those 7 million people were put back to work, we would sell a lot of homes."
McGee notes that the Denver market has weathered tough times before.

"Things were pretty bad in '88 and '89," McGee said. "Back, then the saying was the last one out, turn out the lights. I think Denver is in pretty good shape today. I really do. I'd like to say that we are selling as many homes as we possibly could, but that wouldn't be true. But sometimes we take too much of a myopic and narrow view of things."

Bitter elections a distraction

He also said that he thinks when the mid-term elections are over in a week, it also will remove one distraction from the market.
"This political season has been particularly divisive, and it hasn't helped anyone," McGee said. "I think we all will be better off when we can put that behind us."

Denver's ranking in the Case-Shiller report in August was the same as in July, noted Gary Bauer.

"We maintained our position," said Bauer, an independent broker who prepared reports based on monthly Metrolist data.


American Dream takes backseat to economic fears

He added that prospective buyers in August were focused on "only today," and not the long-term prospect of buying and owning a home, a trend that has continued.

"Consumers are concerned what is going on with the economy and what is going on with their jobs," Bauer said. "They are not looking long-term. The consumer has lost sight of the American Dream of buying a home. But I think that is a short-term change. Once they see a turn-around in the economy, and for a lack of a better word, "enthusiasm" about the economy and everything else, the focus will return to long-term goals, such as purchasing a home."

Charles Roberts, an owner of Your Castle Real Estate, said he thinks that market is still getting over the tax credits, which required a home to be placed under contract by April 30. That boosted sales in the early part of the year, but it was not a sustained boom.


"They did not help us, in my opinion," Roberts said. "They were not a good use of taxpayer's money, as far as I am concerned."
He noted that closings in the Denver area remain down about 20 percent so far this year from 2009, and that is a trend that will not likely reverse itself anytime soon.

"We had such a very tough summer, I thought maybe things would kind of invert themselves, and we would have a really good fall and winter, but I do not think that is going to happen," Roberts said.
And despite a Denver-area unemployment rate that is still relatively high, but below the nation's; mortgage rates at record lows; and plenty of bargains in housing; few people are willing to buy, he notes.

Mentality shift

"I think there has been a change in the mentality of buyers," Roberts said. "There was this over-euphoria five to seven years ago, that you've go to buy to be part of the American Dream. Now people are saying that they can't take any risk, because they saw what happened to Uncle Max. Clearly, the answer is somewhere in the middle."
What it comes down to, he said, is that homes are a much safer bet as an investment today than they were five years ago, yet people were taking on too much risk back then, and not enough today. "The pendulum has swung 180 degrees," he said.

Buying beats renting

Roberts said that he is advising his brokers to show clients "10 different ways they can buy a home and it will be less expensive than renting, which it is true, especially for homes under $200,000."
He said that what "enormous fallacy" is that it is too difficult to qualify for a home.

Just last week, Robert said, he closed a deal on fix-and-flipper that an investor bought and sold in 96 days to an owner-occupant, who received a Colorado Housing and Finance Authority loan. He said between CHFA and the FHA, there are plenty of opportunities of buyers out there who might have FICO scores of 620 or 650.
"That is basically government money, and the government will continue to print money until someone turns the lights out, or we all move to Canada or something," he quipped.

And despite of all the talk of qualifying for a loan being too stringent, he said if anything, there might be too many loans being made that are requiring almost no down payments. Buyers without any "skin in the game" helped fuel the foreclosure crisis in Denver, and especially in places such as Nevada, Florida, Arizona and California.


Nationwide, the Case-Shiller portrays a "disappointing report," according to David M. Blitzer, Chairman of the Index Committee at Standard & Poor's." Home prices broadly declined in August. Seventeen of the 20 cities and both Composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows. Over the last four months both the 10- and 20-City Composites show slowing growth, after sustaining consistent gains since their April 2009 troughs."


"The month-over-month growth rates tell the same story," Blitzer continued. 'Fifteen of the 20 MSAs and the two Composites saw a decline in the month of August as compared to July levels. The 10- and 20-City Composites fell 0.1% and 0.2%, respectively. Indeed, the housing market appears to have stabilized at new lows. At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers' tax credits."

Tuesday, October 12, 2010

365 Things to do Around Denver

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http://livingsocial.com/cities/26-denver/articles