Dave Liniger at a RE/MAX convention in Denver.

Dave Liniger, co-founder of Denver-based RE/MAX is predicting that the nation’s real estate market will begin to rebound this year, as the economy begins to shake off the aftermath of the worst economic and housing crisis in memory.

Liniger’s crystal ball shows mortgage rates staying at or near their historic lows.

“Interest rates will remain at or near historic lows and home prices will stabilize and start to rise by the end of the year,” said Liniger, chairman of RE/MAX. “There’s no question, the housing recovery will be slow and steady, but for many cities the turn-around is already happening.”

With interest rates lower than most people have ever seen, and prices lower than they’ve been in years, the current marketplace has created a unique environment that may not be repeated for decades.

“Informed and savvy consumers and investors recognize there’s great opportunity in this market and they are leading the way to recovery,” Liniger said.

Liniger’s top 10 real estate predictions for 2012:

• Continued low interest rates.
• Home prices stabilizing and starting to rise.
• Increasing numbers of home sales.
• Rising inventories, mostly due to increased foreclosures.
• Distressed properties will make up about half of all sales.
•  An improved short Ssle process to help avoid foreclosure.
•  Homeownership rates continue to fall.
•  Foreign and domestic investors will buy 25 percent of homes.
•  Increasing reliance on real estate agents to sell homes.
• Increased use of mobile and social technologies.

Related Posts:

• Hick’s house sale fails
• RE/MAX promotes exec
• Hornung: Rates trump price on home buying
• Military honors RE/MAX
• MDC cuts losses by $11 million

This year’s Top Twenty was selected from a pool of more than 5,000 large companies and RE/MAX was the highest ranking real estate company in the survey.

“We’ve always supported members of the military and their families,” said Gail Liniger, RE/MAX co-founder and its vice-chairman. “It’s part of our effort to give back to the communities where we do business. Our offices hire military spouses because they make dedicated, organized employees who work hard to get the job done right.”

Each of the companies were assessed on a variety of factors, including:

• The number of military spouse employees.
• Efforts  and results to recruit military spouses
• A firm’s willingness to find new jobs for military spouses that are relocating on orders from the military.

Operation RE/MAX has been helping military spouses and former military personnel find jobs in real estate for the past five years. Created in cooperation with the Department of Defense, the program matches members of the military community with volunteer RE/MAX brokers, who have made a commitment to coach, train and mentor military personnel.

RE/MAX is joined on the Top Twenty list by other high-profile organizations such as USAA, T-Mobile, Kelly Services and Sears Roebuck & Co.

As a result of the success of Operation RE/MAX, the company was honored with the Office of the Secretary of Defense Exceptional Public Service Award in 2007. Operation RE/MAX has enlisted the support of more than 700 individual RE/MAX offices. The Top Twenty list is featured in Military Spouse magazine’s October 2011 issue.

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Gail Liniger honored by SIU
• Military honors RE/MAX
• Liniger: low rates sticking around
• Hick’s house sale fails
• RE/MAX promotes exec

The prospective buyer of Gov. John Hickenlooper's house has decided to pass on purchasing it.

The developer who had Gov. John Hickenlooper’s rental home under contract in northwest Denver, today told InsideRealEstateNews that he has decided not to buy it.

Mike Mathieson, principal of Form + Function Development, said after looking at the home again on Sunday at 4564 W. Moncrieff Place, in West Highland, he decided today that he had too much on his plate at this point to tackle the home’s needed renovation to re-sell it for a profit.

“I decided to pass on it today,” said Mathieson, who earlier had developed a duplex down the street from the governor’s rental, in which each each unit sold for $575,000. He also has a number of other high-end spec homes on the market in northwest Denver and Platt Park.

Concentrating on the new

“It was just going to require too much work and I decided I should concentrate on my new construction projects at this time,” Mathieson said.

Mathieson said he was planning to buy the home for $325,000, which what the listing broker, Juanita Chacon of RE/MAX Alliance had planned to ask for the home at 4564 W. Moncrieff Place. Mathieson estimated the renovation cost of the home would be in the neighborhood of $75,000 or $80,000.

“I think I could have then sold it for the mid-$500,000s,” Mathieson said, who has fixed and flipped home before, although recently he has been concentrating on new, infill developments from about $500,000 to under $700,00s. Mathieson has more than $13 million in new homes in some stage of construction in northwest Denver and Platt Park. They includes homes at 3538 and 3602 Raleigh St.;  3524 and 3526 Stuart St.; the Zuni 6 development in LoHi, 1915 and 1925 S. Clarkson St.;  and 1626 and 1628 S. Grant St., in Platt Park.

“All of our homes are built green,” Mathieson said. “I call them organic modern.”

If he wasn’t so busy with new projects, he would have found the house that Hickenlooper has owned for almost 30 years – he bought it in 1983 for $69,500 – as a wonderful renovation project.

“It’s a cool home,” even if it needs work, Mathieson said. “It probably would have taken some reconfiguration of the interior. And I really love the ground. It’s the highest point in northwest Denver and it has a third floor, so it would have great views.” According to Google Earth, the site’s  elevation is 5,479 feet – more than a mile high.

Realtor Chacon said she probably will have the home officially on the market within 10 days. She said she thought Mathieson was going to close on it when he put it under contract.

“He was pretty aggressive and I had no reason to think he wouldn’t end up buying it,” Chacon said. “But he did have a due diligence period and decided it wasn’t right for him at this point.”

She said she isn’t disappointed the deal wasn’t consummated, although she said she thinks Mathieson’s take on what it could fetch after it was gutted and renovated is right on the money.

“The way it happened was kind of unexpected,” because it wasn’t officially on the market yet, she said. “We were kind of unprepared, the governor was out of town, and the tenant was still living in it. He only moved out last Saturday. This way we can take our time and really be prepared. This way, we can really showcase the brick walls and the original moulding Were going to move the governor’s personal stuff out of the basement. It’s really a nice house on a nice block. There’s a really a lot of charm to it. Once it is remodeled. And interest rates are likely to remain extremely low, so that shouldn’t be a a worry. People are getting $600,000 on up for new attached homes on the market, so I think once this is gutted and renovated, it will be very appealing for someone who appreciates old homes and wants a big lot with a two-car garage.”

Setting the record straight

However, Mathieson would like to set the record straight on one point.

“I know Juanita told you that I knew it was the governor’s home when I first looked at it,” Mathieson said. “But I didn’t. I knew he had a home on Moncrieff, but I thought it was the home next to it on the corner – the one with the pretty garden.”

Hickenlooper’s home made headlines last year because of high weeds in the front yard. The tenant, who recently moved out, was supposed to have maintained the lawn, but was unable to do so because of health problems.

However, Realtor Chacon was accurate when she said the prospective buyer was a big fan of Hickenlooper’s.

“Absolutely,” Mathieson said. “I supported him when he was mayor and now as governor. I thought he was a great mayor and is a great governor. I’m a big fan.”

Contact John Rebchook at JRCHOOK@gmail.com.

To see what else is available and what has recently sold in West Highland, please visit this COhomefinder.com link.

Related Posts:

• Grassroots group preps for tonight’s meeting
• Hick’s rental home has buyer
• Case-Shiller: Denver No. 3
• Overlay district proceeds
• Metrolist unveils updated search engine

RE/MAX veteran Mike Ryan is taking on new responsibilities.

RE/MAX, LLC today announced the promotion of a key executive as the Denver-based global real estate franchise company.

Mike Ryan will assume the role of Executive Vice President, Global Communications and Branding. He also will be in charge of the company’s expansion into Distressed Property projects, oversee government relation efforts and continue to supervise Brand Marketing, RE/MAX University, Event Management and Corporate Communications.

“Mike has been a valuable asset since he joined us 17 years ago,” said Margaret Kelly, CEO of RE/MAX. “His leadership is even more critical now as we take on new challenges, new markets and new technologies.”

Ryan joined RE/MAX in 1994 and was instrumental in the creation of the RE/MAX Satellite Network, which has been recognized with more than 150 international film and video awards. RSN recently became the on-demand educational platform, RE/MAX University. RU encompasses all RE/MAX educational and training functions, including classroom courses and streaming videos that cover every facet of real estate productivity. RU is available on television, online and on mobile devices.

On behalf of RE/MAX, Ryan has worked with U.S. government officials on housing policy to address challenges facing homeowners. He also serves on the blue-ribbon education panel of the National Association of Realtors®, with the goal of establishing industry wide standards for real estate training and education.

About the RE/MAX Network:

RE/MAX was founded in 1973 by Dave and Gail Liniger, real estate industry visionaries who still lead the Denver-based global franchisor today. RE/MAX has offices in more than 80 countries.

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Foreclosure class on tap
• Liniger: low rates sticking around
• Hick’s house sale fails
• Koelbel listing Parker project
• Hornung: Don’t limit your home search

The report released today by independent broker Gary Bauer, who basis his monthly report on Metrolist data, showed there were 3,645 homes placed under contract in September, compared with 5,228 in September 2009. Under contracts were down 8.1 percent from August, when there were 3,966.

In the first nine months of the year there were 38,814 homes placed under contract, compared with 44,791 in the first three quarters of 2009, an 11.1 percent drop.

Closings off 23.1 percent

Closings, by contrast, did not show such a big drop off.

Last month, there were 2,958 home closings, a 23.1 percent drop from the 3,846 in September 2009, and a 3.9 percent drop from the 3,979 in August. In the first nine months, there were 30,286 closings, a 4 percent drop from the 31,554 during the same time period last year.

Downturn reflects season, economy

“I expected September to be slow,” Bauer said. “The economy and seasonality reigned. The economy is soft and consumer confidence is low. The consumer is focused on today and not really looking at tomorrow. In my words, they are hunkering down.” Other outside factors impacting the local Denver-area market include the mid-term elections, less than a month away, and the national unemployment rate released today, which was unchanged at 9.6 percent.

He expects the market to remain sluggish for the remainder of the year. “There is no light at the end of the tunnel,” Bauer said.

On the other hand, mortgage rates are at record lows, averaging about 4.25 percent for a 30-year-fixed loan and 3.75 percent for a 15-year mortgage. “They are just amazing,” Bauer said.

Despite the record-low mortgage rates and affordable housing prices, there is no urgency in the market, said Xenia Matteson, a broker with RE/MAX Alliance Central.

Still, borrowers will bite, if the home is priced at the market, she said.

“It’s a beauty contest and a price war,” Matteson said. “This is not the time to try to test the market.”

Price homes to sell

For example, she said she previewed more than a dozen large homes before putting a home in Littleton on the market for $1.2 million, and quickly had a contract, since it was priced right. At the other end of the spectrum, she also quickly sold a home for $165,000 at Pecos Street and West 36th Avenue in northwest Denver.

Meanwhile, the average and median-prices of homes sold and closed last month rose from September 2009, but are down from August. The mix of homes can impact the prices, especially on a month-to-month basis.

The average price of a single-family home was $290,025 in September, down 1.8 percent from $295,516 in August, but up 5.7 percent from $274,433 in September 2009. Year-to-date, the average price of a home closed was $282,416, up more than 7 percent from $263,518 in the first nine months of 2009.

The median price of a single-family home was $230,000, compared with $225,000 in September 2009 and $239,900 in August.

Inventory rising

And the number of unsold homes on the market rose 17.6 percent to 23,332 (including pending sales) from 19,834 in September 2009. However, if pending sales aren’t included, the number of unsold homes on the market last month fell to 22,800, which is still 15.3 percent more active listings on the market compared with a year earlier. The inventory of unsold homes was largely unchanged from August.

Overall, showings are down and “it has been a quieter than normal summer,” Matteson said. “But there are a lot of opportunities out there with short sales and foreclosures. There is no tax-credit deadline anymore for first-time home buyers, but there are deals out there for buyers who are patient. But if someone wants to sell their home, they have to check out the competition and price it right.”

Dave DeElana, a broker with Coldwell Banker, said he represents a number of clients who have moved out-of-state, many of them to the Washington, D.C, area to take jobs with the Department of Defense and other government agencies. Their Denver-area are sitting vacant.

“It could be a long winter,” DeElana said.

Not even super-low mortgage rates are convincing people to sign on the dotted line.

“I think that interest rates can only drive the public interest to a certain degree,” DeElana said. “Job uncertainty has a greater impact by far.”

He said clients unable to sell their homes who have left the Denver area either are renting homes out-of-state, or have moved in with family.

“If they can’t sell their homes, I’ve advised some of them to take their homes off the market around Thanksgiving and before the Christmas holidays,” DeElana said. “The number of people who are going to buy homes at that time are pretty slim. And those people who are looking to buy homes during the holiday season are really looking for bargain-basement prices.”

Bucking the trend

But Dee Chirafisi, co-owner of Kentwood City Properties, said she is surprised that the market is as gloomy as the overall numbers show, because her company had a good September.

“I would say that we had a very strong September with over $31 million in closed sales,” said Chirafisi, whose company focuses on downtown and surrounding neighborhoods.

“This is a very strong month and I think we are bucking the trend because if our diversity in price ranges and neighborhoods and property types,” which included single family homes, condos and commercial properties.

Related Posts:

• Best October on record for Denver home sales
• Luxury home inventory plunged 35%
• Bauer tracks ‘Signature’ home sales
• Market-picks up, post tax credits
• April home market a roller coaster

“Military spouses make excellent, dedicated employees,” said Dave Liniger, RE/MAX Co-Founder and Chairman of the Board. “They are sacrificing for our country, and RE/MAX hopes to make the lives of military families a bit easier at a most difficult time.”

Working hand-in-glove with the military

The innovative military employment program, Operation RE/MAX, has been helping military spouses and former military personnel find jobs in real estate for the past four years. Created in cooperation with the Department of Defense, the program matches members of the military community with volunteer RE/MAX brokers, who have made a commitment to coach, train and mentor military personnel.

As a result of the success of Operation RE/MAX, the company was honored with the Office of the Secretary of Defense Exceptional Public Service Award in 2007. The  award is one of the highest given to civilians, and was presented to Gail Liniger, Co-Founder and Vice Chairman of the Board, in a special Pentagon ceremony.

Operation RE/MAX has earned the cooperation of more than 500 military installations and enlisted the support of more than 700 individual RE/MAX offices. Most importantly, it has placed more than 1,100 military spouses in jobs all over the world.

Military spouses shine

“Military spouses have a desire to perform well, a dedication to get the job done, and they honor their commitments,” says Liniger. “In the real estate profession, military spouses have a built-in clientele because they have a personal relationship with many families who are moving regularly and trust them.”

RE/MAX is joined on the Top 10 list by other high-profile organizations like USAA, Home Depot, T-Mobile and Kelly Services. To make the list, companies were required to produce at least $1 billion in annual revenue, and have specific military employment programs in place.

The annual list is a “who’s who” of large corporations that were evaluated on their efforts to recruit military spouses, which make up a talent pool of more than 1.1 million; 93 percent are women. The Top 10 list is featured in Military Spouse magazine’s October 2010 issue.

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Liniger: low rates sticking around
• RE/MAX honored by military
• Gail Liniger honored by SIU
• Hick’s house sale fails
• RE/MAX promotes exec

The Denver metropolitan area ranked No. 8 of the 20 areas tracked by the closely watched S&P/Case-Shiller Home Price Indices released today. Overall, homes in Denver appreciated by 3.6 percent in the one-year period ending in May, compared with a 5.4 percent gain for homes in the 10-Composite list and 4.6 percent for all 20 of the areas, according to the report.

“I like what I see,” said Peter Niederman, chief executive officer of Kentwood Real Estate.

Niederman noted that some of the California markets shot the lights out in May, according to the index. For example, San Francisco showed a gain of 18.3 percent and San Diego home prices rose by 12.4 percent.

California skews stats

“Those California markets were well into the double digits,” Niederman said. “If you remove those, Denver was right up there. I think Denver is a very sustainable market. Those California markets are really a lot of noise.

They’re very volatile. They have big drops, followed by big gains. Denver does not have these violent swings up or down.”

Niederman, and others, however, cautioned that the May numbers still reflect the impact of the tax-credit buying that took place prior to April 30, so the market should brace for a drop.

Still, sellers are increasingly willing to bargain on prices, especially at the higher-end, and mortgage rates are at historical low, providing an ideal buying opportunity for those financially able to take advantage of what is a buyer’s market, except at the lower-end.

Jobs key to housing

“Only the third-leg of the stool is missing,” Niederman said. “We need to see strengthening in our employment. When we see some improvement in the employment numbers that will bring consumer confidence back. No one buys a home when they lack  confidence.’

On the other hand, he said that consumers could miss the buying opportunity of a lifetime if they wait, because as the economy improves, it is likely that both home prices and interest rates will rise.

“I do understand there are a lot of people out there who realize this is a great buying opportunity, but aren’t willing, or can’t take advantage of it, because of their job situations,” Niederman said. “Or maybe they lost money in the financial markets, and they can’t make a decision to buy now, even though they know it is a great time to be buying. I remain cautiously optimistic about the market.”

Independent broker Gary Bauer also was encouraged by the Case-Shiller report.

“Once again, I think it shows that Denver is a market on to itself,” Bauer said. “This is another example of how relatively strong the Denver market is. I think it is a positive.”

Bauer, however, cautioned that the May numbers still reflect closing activity from the home buying tax credits, which required buyers to place a home under contract by April 30 and close by September 30.

Frenzy gone

“We’re still seeing the frenzy of the tax credits in the May numbers,” Bauer said. “I think the June numbers are likely to be flat.”

Greg Geller, principal of Denver-based Vision Acquisitions, agreed that tax-credit buying drove a lot of the activity in May, and that has to be taken into consideration. Next month, Geller is likely to be named as the president of the Denver Board of Realtors for 2011-2012.

“The tax credits just brought first-time home buyers out in drove,” Geller said. “Without the tax credits, the market might be far worse and not as bloated, and I’m saying that for across the country. Not only did the tax credits bring out more first-time buyers, but it also likely led to more sellers testing the waters. “If you were planning to sell your home next year, you might very well have tried to sell it during the time of the tax credits,” Geller said.

Falling off the earth

John Sullivan, co-owner of RE/MAX of Cherry Creek, said that “while I can believe” the Case-Shiller report was a pretty good indicator of what happened in May in the Denver area, he said he expects the downturn to be quite severe later this year.

“I think the housing market is going to fall off the face of the earth in July or August,” Sullivan said. “I have six or seven listings right now and nobody is making any offers. And some of them are considerably cheaper than they were of the pre-expiration date,” of April 30 for the tax credit deadline.

He even told his son not to rush out and buy a home before the tax credits expired, as he expected that prices would fall when the tax-credits expired.

Not only have home prices softened in many cases, but interest rates fell from an already low level. While that may help existing homeowners that can qualify to refinance, it seems to be doing little to get jump-start the home buying market, he said.

Low interest rate not enough

“I think if they would drop the rate to 3.5 percent it would not make that much difference,” Sullivan said. “Well, a 3.5 percent rate would drive some people to buy a house, but not that many. If 4.5 percent rates aren’t doing it, I don’t know that a lower rate would make that much of a difference. If you don’t have a job, or you are not secure about your job, you’re not going to buy a home no matter how low interest rates are.”

He said that buyers are pickier than they have ever been.

“Everyone wants the good stuff,” Sullivan said. ‘They want the granite and the stainless steel, the location and the ‘Wow’ factor. The prices of the homes that have all of these things, have held up reasonably well. But if you have an average or below-average home, the price might have dropped 10 percent since May 1,” since the tax credits have expired.

The May numbers also broke the streak of consecutive month-to-month improvements in appreciation. November 2009 through April, the appreciation rate had increased from the previous month, topping out at 4.4 percent in April. The market also increased by 3.6 percent in February, from February 2009. Case Shiller uses “paired sales” of homes closing, in an effort to remove the bias of bigger homes closing, thus driving up the overall percentage increases.

National market bouncing along the bottom

Nationally, the overall market, for the most part, appears to have bottomed more than a year ago, but could continue to bounce along the bottom for quite some time.

“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” says David

M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The two Composites have

improved between 5 and 6% since then, but this is no better than the improvement they had registered as of October 2009. The last seven months have basically been flat…It still looks possible that the housing

market might bounce along the bottom for the foreseeable future, before showing any real improvement that will filter through to the rest of the economy.”

[table "113" not found /]

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Related Posts:

• Under contracts plunge 41 percent following end of tax credits
• Home sale sweet spot below $300,000
• Case-Shiller ranks Denver No. 3
• 2009 Denver home market: At least it's not Vegas
• Liniger: low rates sticking around

Buyers wrote contracts on only 3,883 homes in the Denver area in May, a 41.3 percent drop from April, when consumers scrambled to take advantage of the federal home buying tax credits that required a house to be placed under contract by April 30. In April, a record 6,616 homes were placed under contract, while last month marked the worst May since 2004 when 3,529 homes were placed under contract, shows a report released today by independent broker Gary Bauer, based on Metrolist data.

Under contacts were also down 27.3 percent from May 2009, when 5,343 homes were placed under contract.

“They were record drops,” Bauer said. “They were the largest percentage drops from 1990 going forward for any month, both for the consecutive months and year-over-year comparisons.”

Sales fell with tax credits

Bauer and other experts agree that the drop was because the $8,000 tax credit for first-time buyers and $6,500 for qualified existing owners expired at the end of April and require that the homes close by the end of June.

“April was such a frenzy; the numbers were inflated by the tax credits,” Bauer said. “Realtors were working up to midnight on April 30 to get homes placed under contract.Buyers are making multiple offers on homes and sellers were dealing with multiple offers.”

Still, Bauer believes the tax credits were worth it.

“I think we did steal some future sales,” Bauer said. “But in my opinion, it was a worthwhile program. And it has ended while we are coming into the prime selling seasons of the year – June, July and August. I think we are going to have a good prime season, but not a great prime season.”

Deja vu all over again

Peter Niederman, CEO of the Kentwood Co., wasn’t surprised that under contracts fell so precipitously when the tax-credit deadline passed.

“I think I mentioned to you in 2009, when it looked the tax credits were going to expire in November, that November was the only month last year that reported higher sales on a year-over-year basis from 2008,” Niederman said. “In my opinion, that is what happened in April. You had this huge pent-up surge in April, so under contracts were anticipated to fall in May.”

He noted that at Kentwood, the number of showings dropped in May from April, but not as much as the under contracts dropped.

Niederman, in a letter in his upcoming Gallery, a glossy magazine that highlights expensive listings by brokers at Kentwood and Kentwood City Properties, quotes Lawrence Yun, the economist for the National Association of Realtors.

Tax stimulus worked

“The second round of surging sales from the tax credit extension looks as strong as the original tax credit,” according to Yun. “Evidently, the tax stimulus, combined with the improved consumer confidence and low mortgage interest rates, are contributing to surging sales. The housing market now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs.”

Niederman said he couldn’t agree with Yun more. And he is not dismayed that the market nose-dived in May, as far as under contracts.

“One month doesn’t make a trend,” Niederman said. Indeed, there were 24,510 homes placed under contract in the first five months of the year, a 4.9 percent increase from the 23,366 during the same period in 2009.

“If you want to look at where the trend is, you need to look at the year-over-year numbers,” Niederman said. “I am encouraged that we are about 5 percent ahead of where we were last year. When you look at the first five months of this year compared with the first five months of last year, we are still ahead of the game.”

Economist Patty Silverstein said that everyone knew that the tax credits would have an impact on home sales activity, but until today’s report, no one knew how big of an impact the market would experience.

“Obviously, from the under contract values, we lost some of the momentum we had in the market,” Silverstein said. “The market was sort of front-loaded. But we are now moving into the prime home sales season, and so we will know in the coming months how much we are moving into a steadier, sustainable pace.”

In fact, she said what is happening in the housing economy is not much different than what is happening in the overall economy.”If you are focusing on a little broader measure, and not just on the residential market, this whole economic recovery is going to see some fits and starts. The recovery, whether you are talking about the entire economy, or the residential market, is not going to be healed in just one year..”

Silverstein said she is more concerned about the 27 percent drop from May 2009 than the 41 percent drop from April. “That does kind of concern me,” Silverstein said. Indeed, May 2009 was not a stellar one for sales activity,with under contracts down almost 16 percent from May 2008. While this was the worst May in six years, there were other dynamics fueling the market in 2004, Silverstein said.  “Keep in mind 2004 was when those outrageous mortgage products started to come on the scene,” Silverstein said, fueling sales until the summer of 2008, when the house of mortgage cards collapsed the entire industry.

Realtors are people, too

Chris Mygatt, president of Coldwell Banker Residential Colorado, said the drop off in under contracts last month were “very predictable,” and the obvious culprit was the end of the tax credits.

But there also was a human factor in play that many people will overlook, he said

“People have to realize that real estate agents are people, too,” Mygatt said. “They have to manage their time like anyone else. They were extremely busy showing properties in April, evidenced by the fact that was the best April on record for under contracts. In May, the agents’ job was to get those contracts they wrote in April closed. So they were working with existing clients to get those homes closed before the June 30 deadline and did not have as much time to spend on drumming up new business. I think the June numbers are going to be very important. I think we may see a little bounce back in showings and under contracts in June.”

Mygatt was pleased to see the number of unsold homes on the market last month to rise 6.2 percent to 22,016 from 20,734 in May 2009, and increase by 2.1 percent from the 21,565 homes in April

Pragmatically, however, sellers would have been better served to have their homes on the market earlier, to take advantage of the tax credits.

“Yes, they should have, and that was what agents were telling them,” Mygatt said. “We did not have enough inventory in April, which was frustrating for buyers. But a lot of sellers just couldn’t get organized in time. If you aren’t involved in selling and buying homes all of the time, you don’t realize that it can easily take one or two months to get a home prepared to sales. You have to replace the carpets and paint it and clean up the clutter.”

Still, with the exception of May 2009, the current unsold inventory is the lowest May since 2002, when only 14,173 homes were on the market.

“That shows we do not have an excessive inventory of homes on the market,” Mygatt said. “We can easily absorb the extra homes on the market, without creating an imbalance between supply and demand and hurting pricing. We’re heading towards a more normalized market.”

Most metrics smoking

David Simonson, of RE/MAX Professionals, said the tax credit drove sales in the lower-priced part of the market. “It stimulated a lot of people looking in the $100,000 to $200,000 range into the low $300,000 range,” Simonson said. “Realistically, we are looking at a little wave – a little up, a little down. If you look at everything but the the under contracts, everything else was great.”

For example, the average price of a single-family home that closed last month was $273,285, about 4 percent higher than the $262,066 in May 2009, and the median price of a single-family home rose 4.5 percent to $230,000 from $220,000.

And the 4,365 home closings represented a 20.3 percent increase from the3,628 closings in May 2009 and a 4.2 percent increase from the 4,188 in April.

Also, the 2.1 percent increase in the supply of unsold homes in May from April, bodes well for the market, he said.

“I’m surprised in a good way,” Simonson said.

Market on upswing?

Jack O’Connor, a principal of RE/MAX Professionals, said that May marked the third consecutive month of continuing year-over-year increases in monthly sales. “Historically, three straight months of increased sold-data would signal a market on the upswing,” O’Connor said. “Since the tax credit artificially increased sales in April, watching this data over the next three months will confirm whether Denver is truly on the rebound, or if we are still bouncing along the bottom of the market.”

Meanwhile,  although job growth during the first half of the year failed to live up to expectations, Denver is now being widely cited as a city that will out-perform the national market in job growth and job stability for the next several years, O’Connor said.

Jobs key

“When there is a pool of jobs, people move to take advantage, which lowers inventory and drives prices up,” O’Connor said. “In this particular market, those buyers would have the additional advantage of buying at historically low conforming rates, at a time when average prices look comparatively favorable. That prompts properties to move and for appreciation to occur.”

O’Connor, who analyzed the market using a different methodology than Bauer used, found that there were 4,237 closed sales in the eight-county area in May, 10.4 percent higher than the 3,782 in May 2009.  O’Connor’s research also found that there is a 5.1-month supply of homes on the market priced below $500,000.  At current absorption rates, that would be considered a seller’s market, he said. By contrast, there is currently about a 30-month supply of unsold homes priced at more than $750,000, O’Connor said.

“The upper end phenomenon hasn’t been seen in 50 years,” O’Connor said. “It creates an unusual opportunity for a buyer that has been waiting to move up from a lower price range, to be able to get a sale at close-to full price on the seller side, and to pick-and-choose on the purchase side at very favorable interest rates.”

Year	Under Contract	Closed	Single-family Average Price
2010	3,883	4,365	$273,285
2009	5,343	3,628	$262,066
2008	6,338	4,664	$228,500
2007	6,353	5,081	$318,904
2006	6,459	5,010	$315,257
2005	6,735	5,013	$305,730
2004	3,529	5,241	$294,040
2003	2,773	3,914	$275,879
2002	3,247	5,140	$268,952

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

Related Posts:

• Forbes takes second look at Denver's housing market
• Spring home sales likely to surge
• 2009 Denver home market: At least it's not Vegas
• Under contracts drop by 30%, but homes prices up
• Niederman pushes for statewide MLS