The Denver Metro Real Estate Market is ON FIRE!

In October, there were 4,095 homes sold.  Compared to October of last year, this is a 28.7% increase!

At the end of October, there were 9,719 homes on the market, down from 14,156 at the end of last October.  This represents a decrease of 31.3%.

 In October, homes sold in an Average of 66 Days on Market.  A year ago, it took an average of 102 days.

All statistics are saying one thing; this is a SELLERS market with raising prices.

It seems like every buyer offer is met with 'multiple offer situations' and sellers asking for 'best and final' offers.

This Spring season could be CRAZY!

foreclosure filings

Year-to-date (thru 7/30/12), foreclosure filings are up over the same period last year. Both Arapahoe ounty and Denver County are up 6%. Arapahoe County currently has 2,492 active foreclosures, Denver County has 2,242 active foreclosures - active foreclosures are properties that have received a Notice of Election and Demand (NED) but has not been completed through either auction or cure.

The market is screaming for investment inventory, but anecdotal and personal experience is that the banks are really dragging out the foreclosure timeline.  By statue, the time between filing the NED and the foreclosure auction is 110 – 125 days.  In reality, this timeline is often more than a year long...

Negative Equity - Shadow Inventory

Shadow Inventory is measured in many ways.  I like measurements that consider mortgages that are 120+ days late in addition to homes that are in the foreclosure process.  Core Logic provides the only report that I am aware of that tracks underwater homes, or Negative Equity (Neg-Eq).  The following is from a recent report:

According to a new report by Core logic, 11.4 million (or 23.7%) of all U.S. mortgaged residential properties are in “Negative Equity” (when a borrower owes more on their mortgage than their property is worth).

These figures are down from 25.2% in Q4, 2011. The Negative Equity share is at its lowest in nearly three years.

Here are some details from the report. This is good news, slight as it may be, but good news!

• Negative Equity declined to $691 billion in Q1, 2012, down from $742 billion in Q4, 2011.
• More than 700,000 households returned to positive equity in Q1, 2012.
• 2.3 million borrowers had less than 5% equity, i.e. near Negative Equity in the Q1, 2012.
• Negative Equity and near Negative Equity mortgages accounted for 28.5% of all residential properties in Q1, 2012. This is down from 30.1% in Q4, 2011.
• Nevada had the highest Negative Equity percentage with 61% of all mortgaged properties underwater.

Decline in home values or an increase in mortgage debt is the cause of increase in Negative Equity. Negative Equity improved, in large part, due to improvements in home price levels. Additionally, sell through of existing inventory is fast and furious as we enter mid-summer.

Denver Market Update

All signs are to a rapidly recovering real estate market. 

Comparing January – June of 2012 to the same period last year:

Median prices are up 7.9%
Days on market are down 32 days to an average of 72
The share of total sales that are distressed (REO or short sale) is down 31%
Total sales are up 20.2%
Total inventory is down 20.4%

Every single statistic is positive.  When this is coupled with recent studies showing the Denver market to have among the lowest overhang of Shadow inventory of any large city, it certainly looks like this market is turning around quickly!

New Construction in Highlands Ranch

We were out previewing Highlands Ranch last weekend, South of E470 and South of Lucent Blvd.  There is a surprising amount of new development going on; commercial, residential, a strip mall.  We stopped in to preview the Spaces development by Shea Homes to see the latest trends.  I was impressed.  Price points ranged from $240k – low $300k.  The designs provide a loft feel, with a very open main and all the bedrooms upstairs.  Basements and garages are mostly downstairs – sort of like detached townhomes.  Outdoor spaces are usable, but very limited to a side/back patio that is designed to be very private.  Front lawns are maintained by the HOA, so it is ideal for people who do not want to do yard work but also don’t want to share walls.  I like the idea…

Another Short Sale goes back to the bank...

I’ll start with a little bit of history.  I met this home owner as a result of the bank filing a Notice of Election and Demand, the first step of the foreclosure process.  This client had lost their job, their spouse (widower), and most recently a parent.  Unable to make the payment, the bank began foreclosure proceedings.

 As a listing agent, I put the property on the market in an attempt to complete a short sale.  This is NOT the easy out for a person in foreclosure – the house has to be prepared for showings, allow agents and their buyers to come through your home, prepare and disclose your finances and deal with the emotions related to another loss.  It is not an easy process…  and the result is the knowledge that you did your best to do the right thing.  That’s it – you don’t receive a financial reward, just the vague promise of a less damaged credit report.

 After 45 days of marketing the property, 27 showings and 4 price reductions, the bank has decided to complete the foreclosure process.  The mortgage holder is going to complete the foreclosure on this South Aurora home with the thought of renting the home.  

 What a frustrating, waste of time for all involved.  From the time that I began listing this home, I have been in weekly communication with the bank’s representatives.  It was not until an offer was submitted that they decided to tell me that they were not interested in completing a short sale.  Instead, they wasted my time, my client’s time, the time of all the showing agents and their clients (27 different groups), the time of my title company representative.  And still, the banks wonder why people are mad at them…

Miller Moths

It looks like another Miller moth season is upon us.  It’s funny how a small, non-destructive insect can cause so much consternation.  At our house (we recently moved to Saddle Rock North), nobody sleeps until the bedroom has been cleared of these guys.  With vaulted ceilings, this can be a bit of a challenge – thank goodness for the extension hose on the vacuum cleaner.  We have also set up a soap water bucket trap in the basement.  Nature is not going to beat us this year.  Thanks to Google, I now have a new respect for this critter.  They migrate from the plains to the mountains in the spring.  They hang out in the mountains all summer, returning to the plains to lay their eggs in the fall.  The eggs hatch and an Army Cutworm is born, spending the caterpillar phase munching alfalfa and winter wheat crops.  In this phase they are a major pest.

Sure, the Miller moth is unimpressive when compared to the Monarch butterfly when it comes to migrations.  But still, it’s only a an inch or two long and it completes 2 migrations of up to 100 miles during a 4-5 month adult life.  That seems like quite a feat – dodging vacuum cleaners, soapy water traps, and a variety of other predators every step of the way…  Makes my day seem uneventfully safe…