YES, the slowdown in our market has slowed down, and properties are beginning to move again.
The real estate market is affected by supply and demand just like any other market. The supply is the inventory of other homes on the market. When the supply is too high, prices come down. We have been in a buyer’s market for some time, i.e. there are more homes on the market than there are ready buyers. However the number of unsold homes in the Denver area dropped by 20% in August from a year earlier, the largest percentage drop in five years. While we are still over-stocked, that is evidence that we are trending toward a better market for sellers.
Interest rates recently dropped again. When interest rates are lower, there are more buyers in the market; i.e. more demand. Rapidly falling mortgage rates are bringing consumers seeking a mortgage out in droves, according to the report released yesterday (September 15. 2008) by the Mortgage Bankers Association. The association’s Weekly Mortgage Applications Survey, which measures week-over-week volume of people applying for a mortgage to either purchase a home or refinance an existing mortgage, showed loan application activity increased 9.5%.
Wells Fargo Home Mortgage, Colorado’s largest mortgage lender, upgraded the status of the Denver metro area’s market from declining to stable. This allows buyers to get loans easier.
The National Association of Realtors, chief economist, Lawrence Yun said, “Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years.”
Let’s hope he is right!!
Vicki S. Porter
http://www.PorterHouseRealty.com
This is good news. Also of note is that an investor down payment requirement may go down to 10%, provided the appraiser indicates the market area as nothing less than stable and indicates the area does not have a surplus inventory of homes for sale. This is according to Wells Fargo/Stacey King (one of our members here in 'Colorado Real Estate'.
I am so excited that Wells has upgraded some areas to stable. I think this is a big indication that the market is starting to turn around. In addition to what Stefan mentioned (thank you Stefan) we will also require a credit score of at least a 720 in order to do 10% down on investor loans. The Denver real estate market is definitely alive and well!