Today, we would like to welcome Mary Steinmeyer, Certified Mortgage Lender, from Denver’s Mountain Crest Mortgage. She shares TeamCox Realtors’ positive outlook on the Denver housing market. 

Denver Real Estate Market Commentary

 

I understand why many potential first-time homebuyers are sitting back waiting for some good economic news before buying a home. I also know many home buyers are sitting back waiting for the "bottom". We are definitely in the middle of a historic economic crisis. Just watch the news — reports abound. I’ve heard our current climate compared to the Great Depression. For me from a real estate perspective, it reminds me of the savings and loan crisis of the late 1980s.

 

I purchased my first home during that period in 1990. As a 21-year old professional, I purchased a condo with a 7.5%ish interest rate for $36,000. In five years when the market had recovered, I sold that same property for $78,000 — giving me a down payment on a new house! A house a then sold 5 more years later for more than its asking price because we’d entered a "buyers market." A 10-year cycle that changes my financial situation. 

 

Now can I guarantee the same results today? No. No one can. But do we know that historically all markets cycle? Yes. And we are in a down cycle. The upside is ahead.

 

Now I can also tell you that historically Denver has entered the down cycle before the rest of the nation and also exited it sooner. So while nationally talk of recession abounds, there is good news for Denver.

• Thousands of jobs are being added throughout the state; check www.jobopenings.net for a complete list.
• The Metro Denver Economic Development Corporation is reporting:
• Denver job growth is 1.6% while the national average is 0.2%
• Denver-area employers added 3,800 jobs between July and August
• Education and Health Services are Denver’s fastest growing job sectors
• 32% of Denver area employers plan to hire
• Metro Denver’s foreclosure filings declined dramatically between July and August, down by 35% to 68% by county.

To quote the report "these more positive indicators suggest that the framework for stable housing markets could be in place. Market fundamentals — including home prices, invetory, and job growth — are already stronger in Metro Denver than they are nationwide."

In my opinion, it’s a great time to become a homeowner. Do buyers need to be cautious? Of course. Only work with licensed, reputable real estate agents and lenders who can help you navigate this market. The timing is good for the right purchase.

Mary Steinmeyer
Licensed MB100017382
Certified Mortgage Lender
(720) 339-0526
FAX (303) 583-8832
mary@marysteinmeyer.com
www.marysteinmeyer.com
 
Mountain Crest Mortgage
724 South Pearl Street
Denver, CO  80209
www.mountaincrest.com

Search for Denver Real Estate

I am a strong believer of always looking on the bright side. Here is a positive spin on the current sluggish Denver real estate market. While things may seem a bit dismal in the current Denver real estate market, conditions are far worse in other parts of the country.

The Denver Post reported this week that there was a one percent decrease in Denver area home prices from 2006 to 2007. To put this in perspective, a $300,000 home may have depreciated around $3,000. This just isn’t so bad when you take into the account the national mortgage meltdown and real estate slump.

While we drooled over the double-digit percentage appreciation that many other western states saw over the past few years, this is the main reason why Denver home values aren’t falling as much right now. In this case, slow and steady appreciation seems to be winning the race.

Just to give you an idea of market conditions in other parts of the country, The Denver Post article reported that homes in Detroit depreciated eleven percent from 2006 to 2007. During the same period, Las Vegas’ home values depreciated over five percent, Phoenix’s home values fell over six percent and home values in Tampa Bay, San Diego and Washington DC fell over seven percent. Ouch! I’ll take Denver’s mere one percent depreciation any day compared to those numbers.

What will it take for the Denver and national real estate market to rebound? The mortgage meltdown needs to get straightened out. The real estate market is reacting to the tightening mortgage constraints and is jittery over the mounting problems in the industry. In addition, the Denver market will benefit as other markets begin to rebound. In particular, we have witnessed many Californians, hoping to move to Colorado, having a hard time selling their properties. It will also help for interest rates to come down, the lofty amount of foreclosures to decrease and the overall economy and job market must remain relatively strong.

While the Denver real estate market has seen better days, look on the bright side and be thankful that our landing has been a rather soft one. If you have questions on the current conditions of the Denver real estate market, please don’t hesitate to contact TeamCox Realtors. 

TeamCox is noticing some amazing changes in the Denver rental market.  For the past five to six years, rents in Denver have been very stable with little upward movement. In 2000 and 2001, vacancies were high and apartments and homeowners with properties to rent cut some amazing deals.  Signs hung on every apartment building.  One month free.  Free T.V with one-year lease.Anything to fill the empty places.
2007 in Denver is quite a different story.  Rental vacancies are under 5%. There are no more "deals" to be had.  Rents are on the rise. When interest rates were at an all-time low, renters were buying homes at a record rate.  Renters all wanted to become first-time homeowners. Mortgage companies not only were offering low rates, there were products that allowed buyers to get in with less money than the apartments wanted with security deposits.           

What has changed?  Well, for starters, interest rates are not at their lowest point.  Homeowners facing foreclosure have rented homes and apartments.  When vacancies were high, many apartments were converted to condos–absorbing a significant amount of supply.  

With an anticipated rental increase of  7 to fourteen percent, maybe this is the time for you to consider adding one or more rental properties to your investment portfolio??

Give TeamCox a call.  A team member will be happy to talk to you about this or other possibilities.