Everyone is always looking for encouraging signs when it comes to the economy. After all, the economy is the number one topic on everyone’s mind these days and with the Holiday season here, people are looking at retails’ numbers as one sign to gauge if the economy is getting better.
In real estate, there are a number of factors one could use to take the pulse of the market. Let’s take a look at few indicators that spell good news for the Denver Housing market.
1) At the beginning of October, Standard & Poor’s closely watched S&P/Case-Shiller Home Prices Index showed that the average home price in Denver rose for the fifth straight month ending July. Overall, Denver was creeping up to the prices of 2008.
2) According to the National Association of Realtors Chief Economist Lawrence Yun, at the end of October, pending home sales had increased for eight straight months. This is the longest series since the index began in 2001. Yun says that there is no doubt that the first-time home buyer tax credit helped fuel the streak.
3) According to real estate mogul Barbara Corcoran, homes nationwide are at least one third cheaper than they were three years ago, and as Barbara says, “anyway you want to slice that, it is a bargain for buyers.”
4) Rents are coming down. Why is that important? Remember, home sales and rents go in opposite directions. If rents are going up, people are not buying and vice versa.
So where does that leave us as we close out the year? If you are in the 300K and below market, it’s a much tighter, more competitive market. You may have to offer full asking price for a great home. In the luxury market, there are still deals to take advantage of because the inventory here is high. Will prices go down further? It’s hard to say because there are a lot of factors that indicate if prices will drop further like the job market in that area and inventory. One little test I like to do with clients is drive around a neighborhood that they are interested in living and count the ‘for sale’ signs. If there is more than one for sale sign per two blocks then chances are, prices are still moving down in that neighborhood.
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost