October 16, 2009
WOW is this a sign that things have turned around?
With all of the bad news, the gloom and doom that has been force fed to us the past year I wanted to share some good news! The real estate market is a small part of the “trouble” in our world today but for the ones of us reading this it is probably a pretty big part of our lives. I am not a proponent of the camp that like to spin the numbers to make things seem better than they are, actually I think that does more harm overall than good. I believe it is best to just say what is actually happening and then believe there is good in it somewhere for somebody or at least it will get better. The past 6 weeks or so the real estate market has really picked up steam. For most of the year the only bright spot if you could call it that was in the lower priced homes in the market, those below $400,000. (It still amazes me that we consider a $350,000 home as being basically entry level) Since Sept 1 the market in general has really shown promise. Here is a list of homes under contract or ones that have actually sold since Sept 1.
$0 – $250,000 22 under contract - 10 sold
$251,000 – $500,000 33 under contract - 26 sold
$501,000 – $750,000 6 under contract - 8 sold
751,000 - 1,000,000 14 under contract - 1 sold
Over $1,000,000 6 under contract – 3 sold
These are remarkable numbers when you consider we had only 10 homes close from January 1st until Sept 1 from $750,000 to over $1,000,000..
I have clients ask me ok, what does this mean. I tell them this is a very encouraging sign, an indicator that the mood or the general perception is better. The typical person who is purchasing a home, or second home in the higher price range typically had the ability to purchase anytime this year, they chose to wait. Some may have waited to see how the economy was going to affect their business, their stocks or some other income producing asset, while other just wanted to make certain they were not buying “too soon” or before it hit bottom. The spike in real activity (contracts and closed deals) the past 6 weeks is a clear indicator that these buyers are more comfortable with the overall economy in regards to their circumstances and or they feel the market is at the bottom. The next question asked is usually, well are we at the bottom? I like to respond this way, “I am not sure we are at the bottom, I do not think anyone can say that in certainty, but I think virtually everyone will agree we are in the bottom ¼ of the market. Is it about to hit and then bounce, or has it just hit and we are seeing it bounce up now? Either way it is clear the buyers that could have bought at anytime this year have picked now to jump in.” This is great news for all of us both buyers and sellers. Buyers have a little more assurance that they are purchasing at a great time and they feel confident they are making a very good investment and purchasing wisely. Sellers know that if they price their homes correctly, the chances are far greater than they have been in a long time that a real buyer with real money is willing to purchase their home.
If you have any questions or comments please email me david@chartergroupdurango.com
Just a thought – go out of your way to help someone today, it can be big or small it doesn’t matter just do something that will make someone’s day better!
Rangey said,
October 20, 2009 at 11:49 am
There are definitely encouraging signs in many markets. Here in Fort Collins, small homes (less than 1200sf) have appreciated almost 5%, although larger homes (greater than 2800sf) have declined somewhat. There are strong indicators in many areas that “downsizing” is a significant trend–not just because of the 8K tax credit, but as you have pointed out, simple affordability. Also baby boomers moving down to small space, Generation X’ers not buying into the bigger is better idea. Tighter credit is clearly part of this, too, as well as new conservatism in response to the recession. Borrowing the down payment is no longer an option due to tighter credit of course, but that then impacts buyers who must have cash in hand to make the purchase. Going forward, there is LOT to be said for smaller square feet, including lower utilities, maintenance, and ease of living.
Gail Speer said,
October 23, 2009 at 4:24 pm
Money is reporting a 9% jump in existing home sales for September, and the number of contracts/sales you show is consistent with these sales being probably dominated by first time home buyers taking advantage of the tax credit. (lower priced homes) There is talk that this credit may be expanded. Any opinion on this David?
Rangey
Rangey said,
November 16, 2009 at 12:53 pm
Do the latest October sales figures for La Plata County indicate the “bottom” in your market? The new tax credit legislation for existing home buyers should make a difference in Durango, as well as across the nation’ I would think.
Gail Speer said,
November 20, 2009 at 3:10 pm
Yesterday’s Wall Street Journal reported the fear of Double Dip in the housing market due to the expected number of home owners not yet in foreclosure but expected to be foreclosed. And the uncertainty of the economy overall.
Now that they have extended the first time home buyer credit maybe it will help with the lower end sales. DAAR was positively giddy about the October sales–how are November sales so far?