The first decade of this new millennium was one of contrasts. It began on loose footing with the dot.com fiasco and the events surrounding 9/11. Then followed the years of unbridled economic growth, where people’s thoughts were centered on early retirement, travel abroad and procuring more adult toys. The decade limped to a close as the government attempted to pump new blood into an ailing economy by offering tax credits to homebuyers and salvaging the banking industry; home mortgage interest rates fell to historic lows.
As we enter the next decade, there exists no definitive picture of where the economy is headed. National unemployment rates continue to reside slightly below double figures. Bank foreclosures and short sales continue to be an integral part of the housing market. Home mortgage interest rates have trended-up slightly over the holidays.
There are some positives: (a) Lenders are willing to lend to “qualified borrowers”. More documentation is required from borrowers these days than in the past and appraisals are more tightly scrutinized by underwriters, but there are funds available. (b) Despite the up-tick in mortgage interest rates, the traditional thirty-year fixed rate loan is currently available for less than five percent. (c) Home values have stabilized in most geographic areas across the Front Range. In fact, in nearly all the Denver Metro market areas, the average sold price of a single family home was up in 2010 when compared to 2009. (d) Home sales have improved in several markets across the Denver Metro area when comparing the last two years sales figures. (e) New home construction, for entry level and mid-range homes, has shown some new life over the course of the past year. Some new home builders have even taken the risk of building spec homes again. (f) Absorption Rates (the time it takes for the market to fully churn) have actually dropped as home sales have improved and the inventory of available properties has shrunk.
The Jefferson County real estate market continues to show declines in sales activity for attached units, but the number of single family homes sold in 2010 was comparable to 2009 and the average sales value of single family homes was up in 2010. Click here an overview of sales activity for the past two years for single family homes (chart 1) and attached units (chart 2) for the Jefferson County area, courtesy of MetroList – the Denver Metro MLS.
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