The Double Comma Club

The Double Comma Club header image 1

Today’s Real Estate Market – I know. I wonder. I’m boggled!

The Rueth Team DMAR January 2021 - Denver Market Report

There are things I know, things I wonder about, and things that boggle my mind.  Here are a few… I knew demand was about to explode before 2020 began. Demographics told us that.  8.8 to 9.2 million first-time home buyers were coming and they wanted a piece of the American Dream. With the largest age cohort numbering over 23 million, Americans aged 25 to 29 are looking to start families and buy homes.  And once someone has a child they are twice as likely to purchase a home. 

I knew that a recession was coming, or at least I was pretty certain. America was on a Recession Watch at the end of 2019 and beginning of 2020 tracking slowing manufacturing, shipping, business spending, and job creation as well as declining consumer confidence, talks of trade wars, and political unrest. The two and ten-year yields had also inverted pointing to a longer-term financial instability.

Housing inventory was low coming into 2020, down 10 percent year over year with active listings a paltry 5,025 homes for sale. Yet, buyers were not budging.  Forty-five percent of sellers at the start of 2020 had to reduce their price to get their home sold even though we only had 1.13 months of inventory.  Consumer spending similarly was the very thing that was keeping our economy afloat. Since spending is 70% of the GDP, consumers were determined to not allow the U.S. to go into a recession.

Then, spending stopped because jobs stopped. COVID-19 shut the economy down, and to no one’s surprise the recession began, but then it ended just a few months later. There was political and social unrest, and lives changed forever. The mortgage market was a mess and public enemy #1 Mark Calabria, the head of the Federal Housing Finance Agency, became a target.  But here’s what boggles my mind, consumers wanted to spend. But they couldn’t, not on hotels and airfare, nor concerts and restaurants but they could on homes, cars, and oh yea, on stocks. 

Housing remained resilient as we quickly defined “essential” and adapted to a work from home economy. Houses became bigger, more suburban, with 2 offices, and a place to work, play, workout, educate and relax. They became everything and everywhere to all of us. Coloradans who had jobs, saw weekly wages increase 8.7 percent. Counties like Denver saw the juxtaposition of 11 percent unemployment and 11 percent weekly wage increase in the same period.

Meanwhile, the Federal Reserve continued to support the markets, dropping the fed rate to zero, and injecting trillions through the purchase of mortgage-backed securities and treasuries. As long as they continue, we will continue to see mortgage rates low and equities high. 

So I wonder, will the economy sustain while we distribute enough vaccines to realize herd immunity?  Will the stimulus package keep small businesses afloat or add to the equity market gains?  The Fed predicts unemployment at 5 percent, spending to increase 3.7 percent, and GDP rising to 4.2 percent in 2021. This is good! So, will they be able to justify a zero fed rate and quantitative easing until 2023?  And if they can’t, will rates start to go up?  By how much? I also wonder once people go back to work, ballgames, concerts and travel; will they find things to buy other than houses?  Easing demand slightly and putting us back towards seasonal normals.

January’s DMAR Market Trends report is anything but normal. With 0.4 months of inventory, the visual of our trending closed homes to active inventory tells the story we are all feeling… there are not enough sellers to satisfy the spending hunger of the demographic swell. Year to date, we’ve sold 6.95 percent more homes than last year for a total volume of 15.44 percent more, yet 1.79 percent fewer homes came on the market. Active listings hit an all-time low of 2,541 homes for sale, which’s down 49.55 percent from last year. Consider that there are 1.2 million households in DMARs 11 county area (per the census bureau). 0.2 percent of available homes are for sale. At the last census, Colorado’s 2020 population growth was 2.63 percent year over year. Where are they all living?

What boggles my mind is how our average and median prices did not move this month. We are all hearing of 5, 10, 42 offers per home with appraisal gaps and inspection waivers. Realtor friends are stumped at how to even price a listing in today’s market. Per the report, single-family homes sold at 100.11 percent close to list. Yet, our prices stalled at 7.14 percent for our median close price growth and 7.94 percent for our average. Our market feels on fire, yet this is only 1 percent higher than the historical average.

There is no doubt in my mind this year will be another incredibly strong year for housing. Low rates, favorable demographics, rising wages, and the wealth effect created by a staggeringly out of control stock market will be the story of 2021. With interest rates hitting record lows 16 times in 2020, buyers and investors alike are taking advantage of increased purchasing power and are willing to pay what a seller asks to get their own piece of real estate!

 

Supply Isn’t the Story, Demand Is.

Denver Market Area Report - The Rueth Team

DMAR’s December Market Trends Report was released this morning and provided numbers supporting what we already knew. Demand is strong! Inventory hit an all-time low of 3415 active listings at month-end. Compare this to the average active listings for November month-end of over 14,000 and a happier place of 6,000 units.  Sellers are exceeding the typical seasonal holiday slowdown of decreased supply. The added fears of job security, prospective buyers entering their homes, and finding a replacement home are adding to their resistance to sell. Potential Sellers are also starting to face what will become more widespread, something called rate lock where the appeal of staying in their current home with a lower rate and monthly payment will outweigh their desire to move. We will continue to see tenure increase from its current average of 10 years as well as homeowners holding onto their primary homes with low-interest rates and choose to convert them into rental properties.

Buyers, Sellers, Agents, this is not the time to rest.

No rest for the agent, the buyer the seller

November’s DMAR report highlighting October data reflects just how important the home has become by producing nearly as many records as we saw in last month’s report. Now is not the time to sit on the sidelines in fear that the bubble will burst; it is the time to stay engaged. Finding the right home might be challenging, but waiting will only cost you more.

Nicole Rueth
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500 Englewood, CO 80110
303-214-6393
www.TheRuethTeam.com

Connect on social media:
Follow me on FB:
https://www.facebook.com/theruethteam/
Twitter:
https://twitter.com/nicolerueth
Linkedin:
https://www.linkedin.com/company/the-...
YouTube Channel:
https://www.youtube.com/channel/UCPMd...

Resurgence of HOME and how it affects the Denver real estate market

DMAR How the resurgence of home is affecting the Denver real estate market

It’s become infinitely more important as it’s our refuge, our workplace, classroom, meeting room, restaurant, escape and for some, our isolation. The Denver Metro Association of REALTORS® (DMAR) October Market Trends Report highlights how this resurgence in our home has played out in the stats. 

  • We have the lowest amount of homes for sale for any September at 5,301 homes, which consequently is only a mere 950 homes more than Denver-area’s all-time inventory low
  • Buyers put your sneakers on because homes are selling in six days, the fastest for any September on record
  • Be ready to pay more. Denver’s median closed price hit a record high at $461,000. Consequently, that’s more than the sellers were asking, as the close-to-list price for September was 100.41%
  • Even with this low inventory, we sold 5,850 homes, more than any September on record
  • With another record 6,376 pending sales teed up for October
  • Sellers, I see you are trying. 6,376 new listings came on the market; but with demographics and interest rates favoring buyers, it simply isn’t enough

Denver’s real estate market has not only recovered from March and April’s loss; it has picked up the pace from January and February. As of the end of September, year-to-date closed homes were up 1.61% over last year and sales volume was up 7.53%. The median close price was up 6.9% - that’s an incredible equity win for our homeowners. So the question is when will this end? Or worse, will it POP?

Nicole Rueth
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500 Englewood, CO 80110
303-214-6393
www.TheRuethTeam.com

Connect on social media:
Follow me on FB:
https://www.facebook.com/theruethteam/
Twitter:
https://twitter.com/nicolerueth
Linkedin:
https://www.linkedin.com/company/the-...
YouTube Channel:
https://www.youtube.com/channel/UCPMd...

DMAR for August - Real Estate Did Not Surprise; It Delivered

DMAR report for August from The Rueth Team

Real estate has not only taken a position of favor because it’s now where we are spending most of our time, but it’s also giving homeowners stability in a shifting market.  What keeps me up at night?  The stock market.  As CNN’s Fear & Greed Index moves further into Greed and Citigroup’s Panic/Euphoria Index points towards extreme Euphoria; both point to lower stock prices within a year.  The recent news of COVID deaths breaking 155,000; COVID cases doubling in July; jobless numbers and continuing claims both breaking trend and increasing; and Yelp’s business tracker showing another 15,742 businesses closed permanently in July alone all point to a long recovery. Real estate, however, continues to show strength with a sneak peek into next month as pending home sales in July another big number of 7,122, 27.47 percent higher than last year. 

Read the rest of this entry »

Denver Metro Market Trends July 2020 - Get Those Sellers Moving!

1200x600-tdcc-dmar0720.png

Get me off this COVID-19 rollercoaster! Cases are resurging closing businesses that just opened while risking the recent good news of job creations and lower unemployment we saw from economic reopenings in May and June. The Fed is poised to act to keep rates low and urged lawmakers to accelerate the fourth stimulus package before programs end July 31st. Locally, Denver's housing market remains strong with growing pending home sales, almost full recovery of closed homes compared to 2019, and appreciating values due to scarce inventory. 

Read the rest of this entry »

Denver Metro Market Trends June 2020 - Whose Market Is It?

1200x600-tdcc-DMAR-20200603.png

2020 has been a year of historical proportions (what else could possibly happen?) and it’s changed the real estate market. Buyers and sellers alike are no longer only asking, “Do we love this home,” but are now asking questions like, “Is it big enough to work from home?” “Does it provide opportunity and space for my children to play if schooling at home?” And, ultimately, “Is it safe?”

Read the rest of this entry »

Buyers and Sellers are Ready, but on Their Terms

1200x600-tdcc-DMAR-20200505.png

We see red numbers on this month’s Market Trends Report and this is no surprise, but there are a few silver linings buried in there as well.  Let’s start at the top and what’s going on in the economic market, the consumer confidence, and then how it intersects Denver’s real estate market. COVID-19 has impacted us all, some more deeply than others. The loss of jobs and the requirement to stay at home forced many transactions and businesses to a screeching halt. 

Join us for this episode covering Unemployment, GDP and Consumer Confidence Rates, In Person Showings, Appreciation, Demand is Strong, Time to Navigate. These insights will help you respond to the current market and prepare for what's coming up.

Your partner,

Nicole Rueth
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500
Englewood, CO 80110

303-214-6393

www.TheRuethTeam.com

Connect on social media:

Follow me on FB: https://www.facebook.com/theruethteam/
Twitter: https://twitter.com/nicolerueth
Linkedin: https://www.linkedin.com/company/the-rueth-team-fairway-independent-mortgage/
YouTube Channel: https://www.youtube.com/channel/UCPMdb94tUNMMsUTgdWRMDKw

Housing Was, Is and Will be Strong -DMAR April 2020

1200x600-tdcc-dmar-0420.png

DMAR’s April Market Trends Report highlights the strength of the overall housing and economic market going into what will be known as one of the most surreal experiences you and I have – and, likely, will ever have - in our lifetimes.

Let me first acknowledge the human tragedy of COVID-19.

To those who lost loved ones, jobs, financial stability, and so much more; I hope you find the strength to help us all move past this dark chapter in history.

As optimistic I am about the future long-term future of our economy, the significant downturn and its effects will be felt throughout every industry throughout the short-term. The effects will be felt for the long-term in some industries, but I stand convinced the economy will race to normalcy once COVID-19 withdraws and we fully reopen the economy from social isolation.

Read the rest of the blog at https://theruethteam.com/Market-Trends

Your partner in building wealth through Real Estate,

The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500
Englewood, CO 80110
303-214-6393
www.TheRuethTeam.com

Connect on social media:

Follow me on FB:https://www.facebook.com/theruethteam/ 
Twitter:https://twitter.com/nicolerueth 
Linkedin:https://www.linkedin.com/company/theruethteam/
YouTube Channel:https://www.youtube.com/channel/UCPMdb94tUNMMsUTgdWRMDKw

DMAR Market Trend 0320 - Housing Gain, Recession Fears

1200x600-tdcc-dmar202003png.png

Denver Housing to Gain Despite Coronavirus, Recession Fears

Low Inventory, Again Out of the 5,122 new listings that came on the market in February, 5,083 homes were under contract in DMAR’s 11 county area, highlighting the metro area’s low inventory market dynamics. The low inventory trend seems to continue as we ended February with just 4,835 active listings, down 2.15% from January. Just what do you think is going to happen to home prices in a metro area of about 2.8 million people? Where is the Inventory? My hunch is 2020 might bring the biggest housing inventory shortage in US history.

Currently, 55.2% of all owner-occupied homes are owned by people age 50 or older. An increasing number of Baby Boomers are aging in place, unlike their parents who sold their homes to downsize or move ahead of retirement. It’s not just Baby Boomers. Homeownership tenures have reached new highs at an average of 13 years - the highest average in 18 years! Nationally, new construction just hit a 12 year high but only caters to the upper tier of housing, which leaves an estimated gap of 3.8M homes needed to meet market demand across the United States.

In Colorado, housing permits are down year-over-year as builders try to shift from large homes to smaller, more affordable homes, townhomes and condos. The lack of inventory is creating appreciation. Metro Denver’s February year to date is already 6.25% and primed to continue, whereas median home prices in metro Denver increased only 2.46% in 2019. A recent CoreLogic report shows 4% year over year gains and homes reported by FHFA showed a 5.2% increase year over year.

Coronavirus to Slow Down U.S. Economy

The Coronavirus is a threat not just to public health, but to the global economy. As China scrambles to contain the outbreak, we’re already seeing effects on global trade, supply chains, and manufacturing. In China, workers and truck drivers are being ordered to stay at home to limit the virus’ spread, grinding manufacturing and logistics to a halt. Shipping companies are also canceling routes from China to the U.S., further limiting the number of Chinese products reaching the U.S. Read the rest of the article at https://theruethteam.com/Market-Trends

This podcast is sponsored and produced by The Rueth Team

Your home purchase has a long term impact on your ability to build financial wealth. We at the Rueth Team will continue to be alongside you well beyond the closing table. Whether helping to refinance a loan,  transitioning to your next home, or building multigenerational wealth through investments, we are committed to finding YOU solutions other lenders can’t… or simply won’t.

We look forward to helping you build wealth through real estate by generating passive income for a more financially secure future.

Get started by visiting theRuethTeam.com 

Play this podcast on Podbean App