Wednesday, December 26, 2007

2008 MARKET UPDATE - THERE IS “PENT-UP” DEMAND IN THE MARKET

When there’s little appreciation and minimal confidence in the market, people tend to stay put. But life circumstances change. Kids are born, children go to college, adults retire. In short, our housing needs change as our life circumstances change. An improving housing outlook may unleash years of backlogged demand.

I certainly saw this phenomenon in California in the late 1990s... and I saw how a little confidence in the market went a long ways toward creating a positive "snowball" effect in the housing market.

For the past few years, moving hasn't been "cool" - not when you have no equity and you're fighting just to make a mortgage payment. But when your home starts to act like an "investment" again (i.e., actually appreciating in value), people become much bolder and much more willing to take the next step.

Psychology has always been a huge factor on Wall Street - watch and see if that same psychology doesn't help propel housing in a big way throughout Colorado in 2008.

Friday, December 21, 2007

2008 MARKET UPDATE - RENTS ARE RISING

Residential vacancy rates fell from 6.7% in the third quarter of 2006 to 5.3% during the third quarter of 2007, a reflection of the increased number of renters (from the high foreclosure rate) and an overall healthy economy. Vacancies are now at their lowest level since 2001 – it’s a good time to be a landlord!

Sunday, December 16, 2007

2008 MARKET UPDATE - A STRONG LOCAL ECONOMY

With unemployment hovering around 4%, Denver’s economy is healthy. High oil and gas prices continue to fuel a major boom in our coal and mining industries (especially in Western Colorado), and retail spending is up almost 10%, according to Mile High Market Watch. Additionally, the 2008 Democratic National Convention will pump another $150-200 million into the area economy.

Friday, December 14, 2007

2008 MARKET UPDATE - HELICOPTER BEN

30-year fixed rates at 6%??? That’s what we have as I am writing this post tonight. And it's likely the Fed is going to start whacking away on adjustable rates over the next few weeks. Which leads to one of the funniest cartoons I've seen on the web - if you haven't met him already, let me introduce you to "Helicopter Ben"...

There's a lot of criticism brewing in the financial community about the fact Ben Bernanke might be a bit "panicky" when it comes to stabilizing the markets. And that his past writings and speeches suggest that flooding the economy with money is an option... that makes those low fixed rates of today mighty attractive.

Thursday, December 6, 2007

2008 MARKET FORECAST - AFFORDABILITY

The NAR projection for the Denver Metro Area as a "Top 5" market for 2008 shows that we still live in one of the most affordable major markets in the country. A median priced home in the Denver Metro Area at 80% LTV at today’s prevailing mortgage rates consuming just 16% of average household income. Median priced homes in San Diego, by comparison, require 45% of average household income to service an 80% LTV mortgage.

Monday, December 3, 2007

2008 MARKET FORECAST - MORTGAGE REFORM

Colorado real estate commissioner Erin Toll has aggressively tackled the issue of mortgage and appraisal fraud. In 2007, Colorado has moved to a mortgage broker registration program, and for 2008, a full licensing program is in place. Although it’s hard to track exact numbers (because there was no way to count how many people were actually doing loans in an unregulated system), estimates are that the number of brokers doing loans in Colorado has fallen by as much as 50% since 2006.