The Double Comma Club
Episodes

Friday Jul 08, 2022
Friday Jul 08, 2022
Inventory exceeded demand in June for the first time since the same month in 2020. Spiking 94% year-over-year and 66% month-over-month. Price reductions, according to Redfin, increased to 40% of homes on the market in Denver. If the story ended there, it might concern me. Sellers flooding the market giving homes away at discounted prices. But the story is much different than that. June ended the first half of a transitional 2022 and it did so with a bang. Cryptocurrency is down 60%; the stock market had its worst first half of a year since 1970, inflation hit a 41-year high and housing.. well, so far this year, housing is up 16.5%. 2022 year-to-date median price growth is only 1% lower than we experienced during the first half of 2021. With all this inventory, though, buyers and sellers “feel” like it shifted to a buyers’ market. Get the full story in this episode of The Double Comma Club, "Inventory is double last year, but it is not enough."

Friday Jun 03, 2022
Friday Jun 03, 2022
Months of Inventory for May landed at 0.67% or 20 days. A balanced market, when supply equals demand, is defined by 6 months of inventory. Yet, on the street, real estate agents and buyers “feel” like we are headed towards a balanced market. Close to List came in at 105.33% telling us buyers are still paying more than asking on average. If you look at over $1 million dollar homes, those went for 107.12% close to list. And median days on market were still a hot 4 days. Yet some listings had few to no showings their first weekend on market and the median closed price actually dropped 0.24%. 197 more homes sold and 631 more homes went under contract than last month, while 72 fewer homes came on the market to choose from. Given these numbers it’s obvious that the active listings count pulled on the last day of May, on a Tuesday, would jump 14% from last month and 76% from last year giving buyers 3,652 homes to choose from. Right? Buyer demand as measured by the United States MBA Purchase Index dropped 12.3% during the month of May. Mortgage purchase applications softened as interest rates hit an average of 5.62% for a 30-year fixed mortgage on May 7th per the Mortgage News Daily survey. Application numbers remained muted even while rates dropped 0.5% during the 2nd half of May. With all the graduations and holidays, did buyers not notice? Buyers and sellers alike are trying to figure out how to time this market. A market in transition is sending mixed messages. Inventory is still painfully low. Closing 5,445 units last month means we need 32,670 homes for sale for a balanced market, an unrealistic number given Denver’s propensity for being a sellers-market. I’d be thrilled with even the 10,527 average active listings we’ve seen in May from 2008 through 2022. There is a third of that today. But rising inventory will be the tell-tale of an easing market. And we would expect to see rising inventory given consumer inflation of 8.3% and mortgage rates above 5% should cool buyer demand. Mortgage rates are expected to stay above 5% through 2022 as the Federal Reserve kicks off quantitative tightening on the 1st of June and plans on raising the Fed Rate by 0.5% in June and again in July. We will know more as the Fed releases their Dot Plot Map at their June meeting; giving us clues as to where they see the Fed Rate going for the rest of 2022 as well as 2023 and 2024. Many economists expect rates to stay where they are or even go a little higher as inflation continues to prove less transitory and weighted more on longer-lasting wages, housing, and the geopolitical events happening around us. These higher borrowing rates on top of our 18.42% year-to-date higher median closed prices could and should yield us longer days on market, higher active inventory counts, and softer month-over-month price growth as buyers become more decerning and slower to pull the trigger. Sellers will need to adjust their strategies to continue to attract more buyers. 8.3% of closed transactions this May reduced their asking price prior to receiving an offer. This compares to 6.9% in May of 2021. Those properties that reduced their price spent a painful average of 28.4 days in the MLS compared to 7 days for those with no price reductions. Sellers with homes on busy streets, odd layouts, or deferred maintenance might have missed their winning opportunity. But for the rest of the sellers, pricing right and staging well will continue to reap rewards given our current months of inventory and close-to-list. Because buyers are still buying and willing to pay a premium. Despite consumer confidence dipping 2.2 points, retail sales are up 0.9% month-over-month and 8.2% year-over-year. Luxury sales, travel, and housing are all winners in the eyes of today’s buyers. As the number one hedge against inflation, housing will continue to remain strong even as we move inches towards a balanced market. Because while the wealthy are spending $195 million on Andy Warhol prints of Marilyn Monroe and $143 million for 1955 vintage Mercedes Benz as hedges, the rest of us can count on a good home continuing to grow at a good pace providing stability and financial security as our hedge against inflation. Until next time, that’s a wrap for this month’s Market Trends update. It’s my pleasure to keep you updated, Nicole Rueth of The Rueth Team of Fairway Mortgage

Friday May 06, 2022
Friday May 06, 2022
Did we peak in February? Both average and median price growth slowed in April. Looking back, month-over-month median price growth started out flat in January, yet low inventory and strong pending home sales provided a strong close-to-list of 102%. (meaning the average buyer was paying 2% over asking) In February, prices rose a strong 6.5% in one month, as active listings stayed depressingly low, pushing close-to-list up to 105%. March saw a swell of much-needed inventory if you can call 6,020 newly listed homes a swell, giving buyers a few more choices but no extra days. Days on market stayed at 4; while the close-to-list increased to 106.5% even while median home prices softened to a 4.8% month over month increase. April’s data reflected a slowing median home price growth again as it increased only 3.81% from last month with almost 7,000 homes hitting the market, yet the close-to-list continued to increase to 107%.

Monday Apr 04, 2022
Monday Apr 04, 2022
A recession is exactly what we need right now. And it's good for housing. So what am I talking about? The two in tenure treasury yield had a small 0.05 spread as March ended. This is on the verge of inverting, which is a high validity recession indicator of five of the last six recessions that were all proceeded by an inversion. However, today we also have incredibly strong labor market. The unemployment number just came out at 3.6%, which is a post-pandemic low. In fact, unemployment has only been lower than 3.6%, three times since 1950 non-farm payroll saw robust 431,000 jobs added, which is alongside 11.3 million job. If you remember an inventory in 2018, when rates pushed above 5%, 1,827, new listings came on the market during March that's a 44% month of a month increase, but more than half of those new listings were scooped up as pendings increased by 1039 and closed homes increased by 941. While more inventory might give buyers a little more breathing room, they are not giving up with more inventory. We have more sales. This additional inventory is partially due to seasonality. I mean, some of it is investors taking their winnings off the table and others are looking at this intense demand and talks of a bubble and wanting to play the timing game. I think as prices rise, high prices are a bit of a cure for high prices. The appreciation much like inflation will slow down, but talks of a bubble assume high prices themselves are the tipping point and they aren't homeownership, equity of 69.2%, a vacancy rate of 1.6% and a high birth rate. 30 to 33 years ago, all starve off the bubble talks 75,000 annual equity gain for an average Colorado. In addition to a 0.01% Colorado foreclosure rate, and a 1.9% 30 day rate tells me that struggling homeowners don't have to sell at a discount just at market,

Friday Mar 04, 2022
Friday Mar 04, 2022
Denver appreciated 19.1% over the last year alone. 60% of all homes are selling over asking prices. The Denver Real Estate Market came in strong and fast in 2022. That fact, coupled with Russia's global actions is going to have an impact on our housing market more than just the liquidity we see circulating. It will continue to put upward pressure on a rising inflationary market, increasing the cost of everything. 2022 housing buzz words will include terms like global impact, market velocity, inventory shortage, shifting interest rates, insatiable buyer demand, rising inflation, and affordability. So, what are mortgage rates doing and where do we go from here?

Friday Feb 04, 2022
Friday Feb 04, 2022
Interest rates have been on a downward trend since 1981 when the 30-year fixed rate hit 18.5%. Just three years ago they were almost 5%. Now, news cycles are headlining rates jumping from 2.625 to 3.25% in 2021 and climbing from 3.25 to 3.5% in 2022. If you bought your first home in the 80’s, 90’s, or even 2000’s, you're laughing out loud when the words “jumped” and “climbing” are used with rates in the low 3’s. The low rates in 2020 and 2021 both propelled and offset the insanity which was extreme housing demand with a limited supply. I don’t have to remind you of what happened, but it does beg the question… Where do we go from here?

Wednesday Nov 03, 2021
Wednesday Nov 03, 2021
Comparatives are funny because they can tell any story you want. The market is slowing down? The market is still nuts! The idea real estate is hyper-local is at its epitome in times like these. Nicole dives into the Denver Metro local numbers and a bit about the economy but let's start with a story because perspective is everything."One of our clients this past weekend put in an offer and the listing agent and friend, Maura Putnik, called me and shared the seller side experience. Her $890,000 listing had 80 showings, 18 potential offersSix of those retreated when they heard where the price was headed, 12 written offers of which a few improved their offer, to have that one get the deal. In addition, four agents offered to submit a backup."

Friday Aug 20, 2021
Friday Aug 20, 2021
The July DMAR Market Trends data was released this week, and there are two notable trends. First, when comparing 2021 to pre-covid 2019, our seasonality is falling back into normal ranges. We have a healthy influx of listings which were up 8 percent, 2 percent more homes went under contract, and there were 7.5 percent more closings when compared to 2019, yet we continue to see three times the price growth. If I return to our current month-over-month or year-over-year and stop there, we are bleeding red. But the real story is in the green. Green month-over-month active listings are eluding to hope that more balance is on its way, yet green double-digit annual closed prices say that balance may not arrive too quickly. The second trend that stuck out is that year-to-date, homes priced over $500,000 are flying off the shelves compared to 2020 and 2019, with more homes at higher prices coming on the market, going under contract, and closing. Year to date 54 percent of all homes sold in the Denver market were over $500,000. In July, that number spiked to 74 percent. Where did all of the under $500,000 priced homes go?

Friday Jul 30, 2021
Friday Jul 30, 2021
Buyers and sellers are exhausted by the extremes. Nationwide, new listings are up a strong 5.5% year over year and an even more impressive 11% from last month. In the Denver Metro, our new listings were up 6% from last year, and 24% from May. This added 7,826 homes to the Denver market last month, lifting our 2,000 active listings to a less than healthy, but certainly welcome 3,122 at the end of June. That's a 50% lift in one month, although it's still shy of a healthy market. The average active listings for June is 16,098. Days on market is still 4 for both detached and attached.Mortgage purchase applications dropped to a 5 month low. Pending home sales slowed down to a 2% gain from last month's 17% month-over-month increase.

Tuesday Jun 22, 2021
Tuesday Jun 22, 2021
The second half of May seemed to open up a bit. But, sorry, it was a false peak. Less inventory came on the market and more buyers went out looking for it. Inventory was down 6% from last month, and down 14% from last year inventory. 6718 homes went under contract, which was up 17% last month, and up 3% from last year.Active listings dropped last month. In fact, there was a 20% drop and inventory fell below 2000 homes for sale the second time this year. Listings are spending and average of four days on market. You have to be ready to pounce, offer 30K over asking, without any contingences and ready to close in 2 weeks. 26% higher close - higher end homes.23% higher close -medium priced homes.$700,000 average closed price detached. We are nowhere near the peak. Same with rates. Rates turned up mid-month.Inflation jumped 4.2% - the highest in 13 years. Core inflation jumped to 3%. This was the highest monthly gain - EVER. Get the rest of the insights by listening to this 9 minute episode. More false peaks are expected.