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The next 45 days will tell us a lot about the state of the State.  Or, more precisely the state of the Denver area in terms of the real estate market.

A quick historical overview.

• The Denver Real Estate market started to flatten out in 2001.  15% annual appreciation slowed to less than 6%.
• The Denver Real Estate market had very little appreciation from 2003-2005
• From 2005-2007 the Denver market dropped at a fairly steady pace.  Prices corrected over this time by over 15%
• From March 2008 to September 2008 the Denver Real Estate market appreciated, or stayed even, each month.

Analysis of 2008

I’ve been saying since January of 2008 that the Denver Real Estate market was on the mend.  We had hit bottom, and were ready for the eventual upswing.

In February 2008, we were finding many GREAT values for investor clients to purchase.  Values of homes that were 20%-30% below that of 2005.  Today, these deals are few and far between!  There are still some great deals to be had, but the weeding out process is much more difficult, and the competition stiff.

The recovery process has been slower than I anticipated, but the numbers are bearing out this prediction.  The Denver Real Estate market has been bouncing off the bottom for 7 months, and the upswing is near.  Or, is it?

The past 2-3 weeks have seen a dramatic DECREASE in activity. Historically the Real Estate Market takes a breath before an Election, and the gravity of this Election, along with the National Economy and the woes of Wall Street, have inflated the problem.  There is a definitely a “Wait and See” attitude in the buyer population right now.

So, in my opinion, the next 45 days will tell us everything about this market that we will need to know. The election will be behind us, and the country, along with consumer confidence, will no longer need to worry about the leader of the free world for the next four years.  Americans can get back to work, and back to living.  And, we can all move on from the uncertainty, fearmongering, and mudslinging that comes standard with Presidential Elections.

I think we will see the months of November, December and January be some of the best months for home sales in many years (compared to the same months in years past.)

The reason for this is there is HUGE pent-up demand from home buyers. There are 1000’s of first time home buyers in the market with month to month leases, looking for the right opportunity to jump into the market.  There are 1000’s of people, who have a home to sell, that would love to buy up, or buy down, and take advantage of the depressed pricing.  This group has been sidelined because they have been unable to sell their current property for what they believe it is worth.  These people are looking to VOLUNTARILY move, and as such, have decided to “wait it out” rather than take the necessary beating to sell over the past year.

If I’m wrong, and the next 45 days don’t show any improvement, it’s my fear that we will be looking at late spring, early summer to see the rebound begin in earnest.

So let’s get this Election over with already!

What do you think?  Do you believe the Denver market is ready to rise?  How about Nationally?

photo credit: Ricardo Carreon

For Denver area Real Estate, the number of unsold homes in September dropped to the lowest level since December 2005 and the number of homes placed under contract jumped almost 22 percent from September 2007, the best September for sales in three years.

The average and median sale prices of homes, meanwhile, have fallen back to 2002 levels.

Certainly we’re not out of the woods yet, but this data continues to confirm our belief that the end of this down cycle is near!  My 17 years of experience have been telling me for months that we are in recovery mode.  Since March of this year, the Denver market has actually seen appreciation.  Less than 1%, but it’s certainly better than depreciating at 3%-5% per month like some other markets!

GOOD NEWS for the Colorado Market… act now before it’s too late

For Colorado as a whole, prices rose by 1.82% in the past year and by 0.32% in the second quarter please see the attached article from the Denver Business Journal for more detail.

As a mortgage professional in the industry I have the opportunity to talk with all parties involved in the transaction- both buyers and sellers and Realtors. The vibe is positive out there. People are feeling good about the inventory going down and the increased number of “SOLD” signs in their neighborhoods.

As rates remain in the low 6’s for a 30 year fixed mortgage it is a wonderful time to take advantage of Real Estate in Denver. Consult your Realtor and your Mortgage Professional on how to buy with 0% down before the down payment assistance programs are no longer available.

Seller funded down payment assistance programs

will be available until September 30, 2008.

YES- we can close the loan this fast!

First-time buyers and people who have not owned a home in the past three years may get a $7,500 tax credit if they purchase a home on or after April 9, 2008 or if they purchase one before July 1, 2009.

Please feel free to contact me with any additional questions you might have.

Happy house hunting.

Rebecca’s Email

PMI, Private Mortgage Insurance, is required on most mortgage loans in which the borrower has less than a 20% equity position.  These insurance companies charge the borrower a premium to benefit the mortgage lender in case of default.  Part of their insurance rate analysis includes an in-depth analysis on the potential for property value decline.  Obviously, a large concern for everyone today.

From The PMI Group, Inc.

Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years. The Summer 2008 Risk Index is based on first-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.

The Great News, Denver is one of only only 14 areas in the country, with a less than 1% risk of prices dropping in the next two years!

To see the other 13 areas, click here.