READY TO REBOUND!
Home prices are stabilizing while interest rates are at an all-time low. Good time to buy OR sell!
Real Estate experts across the country are reporting that the worst of the housing crash is over. Within 5 years, median home prices plummeted almost 40% however the real estate industry is taking a collective breath as the last of the excess valuations from the housing bubble have been stabilized.
But what does this mean for Colorado and Commerce City?
Evaluating the market requires looking at a variety of topics including consumer attitude, market trends, home prices, real estate activity and supply/demand. So we asked life-long Commerce City resident and Chairman of the Denver Metro Association of Realtors, Justin Knoll, to break down the local housing market for us.
The most highly publicized inventory the last few years came from foreclosures – increasing inventory and lowering home values across the country. The good news is that foreclosures in Metro Denver are down in 2012, however Commerce City is still well-above the state foreclosure rate. In March there were 699 homes in foreclosure process in Commerce City. The average foreclosed home sale price is $105,287. (1)
U.S.: 1 of every 662 housing units is in foreclosureColorado: 1 of every 591 housing units is in foreclosureAdams County: 1 of every 371 housing units is in foreclosureCommerce City: 1 of every 276 housing units is in foreclosure
Realtors are anticipating a strong spring and summer, but there are still uncertainties out there that make it hard to predict the market. Realtors are concerned about what they call “shadow inventory”. Shadow inventory are the homes that are bank owned or entering the foreclosure process – inventory that realtors can’t see or predict.
“We don’t know all the inventory that could hit the market in the next few months,” Justin explained. “But if we start seeing an influx of HUD inventory or bank owned properties, it could change the whole landscape. We know there are about 100,000 homes out there waiting to hit the market but we can’t predict when that will happen.”
According to Justin, the Denver Metropolitan Area is currently seeing a 15 year low of inventory of homes for sale. There are only three months of inventory sitting on the market right now, where six months is considered a normal, balanced market. Less supply combined with pent-up demand and stabilizing home values means that if a home is priced appropriately at market value it will have multiple offers within the first week.
According to the Denver Metro Association of Realtors: “Particularly hot is the market below $225k which has only two months of inventory. It’s not uncommon for a listing to have 10 showings and a full price offer in the first week. Even in the $300k - $500k we’re hearing report after report that buyers are getting out-bid and multiple offers are becoming the norm.” (2)
The busiest market in Commerce City is the $150,000 and under price bracket (found largely in the Southern Core). This price range is wide open for investors or first time buyers. The Northern Range has survived through short sale activity in recent years, however the city is starting to see an increase in the number of new home permits pulled for the Northern Range.
Justin explained, “We’re seeing the importance of a community having the basics. The opening of King Soopers on 104th & Chambers will increase demand up north. We’ve already had people saying they are ready to make the move once it’s open. So that is exciting and can only lead to positive things for the housing market up there.”
There are visible trends in the home buying market. The majority of sales are coming from non -contingent buyers, meaning they don’t have anything they are waiting to sell. This translates into first-time buyers, investors, or people buying a second home. In addition, purchasers are buying smaller than they would have in the past, focusing on both financial and space economies. Consumers are buying fewer objects to fill the homes, want smaller utility bills, and higher efficiency homes. And with gas prices continuing to rise, they want to rely less on driving for transportation. Additionally, the people entering the home buying market are more qualified than they have been in the past.
Commerce City is primed for growth. The affordability of homes in both the North and South, the quality of the Northern Range community, and the city’s convenient location between DIA and Metro Denver have put Commerce City on the map for home buyers.
For additional information, visit the Denver Metro Association of Realtors at DMARealtors.com.
(1 )RealtyTrac(2)The Denver Metro Realtor, published April 2012