Now that summer is officially here, how is the Denver Real Estate market doing and what should we expect going forward? It is a great question and I wish I had a crystal ball to tell you exactly how it is doing and what will happen in the future. Unfortunately, no crystal ball in sight but I can give you insight from my own personal experience as a Realtor, what I am hearing in my office which is often the best barometer of of the market, and also plenty of statistics to back it all up.
In my own experience, I am definitely feeling the push of amarket I feel is firmly on the up-slope and getting better. In the past two weeks, I have listed four homes. I have asked all four sellers why they decided now is the time to sell and the answers have all been the same. In a nutshell, they are confident the market is doing well and with interest rates so low, there has to be lots of potential buyers out there who might be interested in their home.
I find this answer very insightful since three of these sellers I have been speaking with me the past three years about selling and like clockwork, all three decided to sell their homes because they finally feel confident they will sell. And as a Realtor, I feel consumer confidence is a more important indicator of the direction the market is heading than any statistic I can ever provide.
I have heard the same general confidence spread across our office as more and more listings are popping up on our website and selling very quickly. Buyers are taking advantage of these insanely low rates and they too feel confident that our market has bottomed out and the only place we can go is up.
So how about some "boring" numbers to back it up as well? To start, foreclosure filings are at a 30 month low and foreclosure sales are down 24% from last year at this time. This means that fewer homes are being foreclosed on which will certainly help hold home values in hard hit areas. And without as manyforeclosures to turn to, more home buyers are buying traditionally sold homes from actual sellers with equity. The upside of this is the domino effect of home buying. A transaction no longer ends at the bank as you see with a foreclosure. Instead, if a first time buyer buys from an actual seller instead of a foreclosure, the seller will then buy again, and that seller will buy again, and you get the picture, a lot more sales and activity in our market.
Next, if you look at rentals, you see how out of control this market is. With less than a 1% vacancy rate in Denver right now, and rental rates rising, those that never thought about buying are taking a second look. With an interest rate of 4.25%, I can honestly say I have clients buying for less than they would be paying in rent and getting twice the home.
And finally, for those that question if we are going to have a double dip in the recession or housing market, evidence points to the opposite. We did have a bit of a dip in March, but sales and prices have recovered sinceand according to the experts, the latest dipping is just an indicator of the start of another housing cycle.
In the end, it really comes down to confidence in the market. The numbers indicate the confidence we have been seeing around town lately is justified and with these rates, I expect it to be a very busy and productive year for Denver Real Estate.
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