Consistently consistent – Denver Housing Market Rebound

1. Consistent growth in number of homes sold.

2. Consistent increase in Average Sold Price.  

3. Consistent low inventory.

One or two months of this type of activity is nice, but 4 or 5 months – to me that illustrates a true trend.

For the past few months I have been writing about the strength of the current market, reporting that the statistics were corroborating we real estate professionals hear day-to-day, and what businesses affected by real estate (contractors, vendors, other re pros) were reporting as well – busy, busy, busy.

John Rebchook’s  recent blog post about activity in July neatly sums up what we are seeing on the streets:

Home sales activity sizzles in July

What this means for you depends on who you are:

Thinking about selling?  Well, get ready to move -and quick.  In many neighborhoods, I am seeing homes sit on the market for 1 to 2 weeks.  In this environment it is critical to price your home in a way that maximizes your proceeds, is attractive to buyers and can pass muster for appraisers and lenders.  Balancing this equation is tricky and it helps to have a broker who has a window and understanding into each of these worlds – such as Cherry Point Properties! : )

The trick about selling is that you will need to find a replacement in a low inventory environment.  I am suggesting that sellers begin their home search at the same time they begin the listing process – if your home sells quickly, you will have a leg up on getting a replacement under contract, eliminate a lot of stress and avoiding risk to your contract.  I also suggest that buyers not limit their search to homes that are actively listed – I am employing unique search strategies to find homes for sellers, and if all else fails, if you see a house you like, as your broker, I will approach the homeowner on your behalf to find out if they are interested in selling.

Buyers – Smart real estate pros know that money is not made on the sell side, but on the buy.  With prices still reasonable and with mortgage rates at never-before-seen lows, this is an unbelievable time to upgrade your home.  You can lock in a super low rate (in some cases a 15 year mortgage, with rates in the high 2’s makes tremendous sense), and pick up a new home as the market is on the upswing then sit back and enjoy the ride.

Investors – Buy and Hold – although many of the foreclosure deals are gone, home prices are still reasonable and with mortgage rates low and the rental market tight, you can still cash flow a property and enjoy leveraged appreciation (the CoreLogice Home Price Idex for Denver-Aurora-Broomfield was up 7.2% from June ’11 to June ’12).

Investors – Fix and Flip – the fix and flip is back!  With the tight inventory, if you can find the right opportunity, get in low and quickly bang it out – you will have a ready market.  As the supply of entry level homes drys up, they fix-and-flip opportunities are moving up into the higher price ranges.  Cherry Point

Staying Put?  – If you have no plans to move in the near term, this might be a great time to re-finance you home.  30 year rates are hovering in  mid-3% territory.  One caveat I would throw out is that several people I have spoken with have indicated that they have not been getting the appraised value they expected – always review your banks appraisal – in some cases, it may not reflect actual changes in value and the current market (more on this later).  If you don’t think the appraisal is  right – tell your lender (but have some supporting evidence to explain why!)

As always, there are risks to the market – unforseen events, political change or grid-lock and global economic conditions can play a big role.  Thanks to the looming “fiscal cliff”  our lawmakers once again are in a position to destroy any recovery momentum – the effects of this fiscal cliff  on uncertanty and employment  are already starting to show.  I tend to be an optimist and  think that this will all get worked out and the Denver housing recovery will continue.  However, if you are not optimistic – this might be a good time to adopta a get-out-while-the-gettins’-good  approach and sell your home while the Denver market is hot.