Market Update

We are experiencing, as you may know from the national news, forest fires throughout Colorado, with several local fires here in La Plata county. Most likely in relation to those fires, we are seeing a slow down in general market activity. However, most of Colorado and most of Colorado will survive these fires with the help of our amazing firemen and women and we are so grateful to them for their extraordinary service.

I recently did research on what the market has done statistically so far this year. At the end of the year 2011 transactions were 718. At the end of March 2012 annualized transactions were 757 which represented a 5% increase through the 1st quarter. Since then, the market has been stable, neither increasing or decreasing significantly. Yesterday the annualized transactions were at 748.

On the pricing front, statistics show that median prices are equivalent to median prices in 2005. We have continued to see a downward trend in pricing through the first half of 2012.

If you have any questions, please do not hesitate to call me. You can reach me, Don Ricedorff, at The Wells Group 970-375-7014, don@frontier.net, or at my website at durangorealproperty.com.

Don Ricedorff is a licensed real estate broker in the State of Colorado, with 18+ years of experience, and he resides in Durango Colorado.He has numerous real estate designations, which have provided him with an unparalleled education to assist his clients. The designations include:

CRS, Certified Residential Specialist
CRB, Certified Residential Broker
CCIM, Certified Commercial Investment Member
CDPE, Certified Distressed Property Expert
ABR, Accredited Buyer Representation
GRI, Graduate of Realtor Institute
RSPS, Resort and Second Home Property Specialist
CIPS, Certified International Property Specialist
SRES, Senior Real Estate Specialist

He is also an active volunteer in the community and his church. His highest aspiration is spending time with his wife, Janet, and his three children Kelly, Katie, and Kyle. His other interests include playing tennis, fly fishing, hiking, boating, and water skiing.

Good News for the Housing Market

This week we'd like to share an article with you from Bloomberg Businessweek.  While the article references the National Real Estate market, it is important to remember that all markets differ.  Our market has shown increased activity levels in the last quarter, especially in the lower price ranges. 

Good News for the Housing Market

By Karen Weise on June 14, 2012

The housing market’s been giving mixed signals, flashes of hope mixed with sudden bad news. There’s no sign yet that a real recovery has taken hold, but some new data are optimistic.

Home prices and sales are on the rise. DataQuick says the average sale price for the past 30 days was $189,500, up $7,000 from a month earlier. Sales are also up 8.2 percent during this time. In Southern California, for example, DataQuick says the market is continuing its “step-by-tiny-step trek back toward normalcy.”
Shadow inventory is shrinking quickly. The so-called shadow inventory refers to distressed properties that aren’t listed for sale but probably will be—homes on which borrowers are grossly delinquent or already in foreclosure, or that banks have already repossessed. CoreLogic says in April, 1.5 million homes were in the shadows, which equates to a four-month supply, down from a six-month supply a year earlier. A smaller shadow inventory can be positive for prices because it means there are fewer distressed homes poised to come on the market.
Foreclosures are up. In the fall of 2010, the robo-signing scandal erupted over how banks were using faulty paperwork to evict borrowers. They cut back on processing foreclosures, building up a backlog of distressed properties. In March, banks agreed to a $25 billion robo-signing settlement, and new data show banks are restarting the foreclosure machinery. In May, banks filed to foreclose on 205,990 properties—a 9 percent increase during April, according to RealtyTrac. The foreclosure pickup hurts the people who are losing their homes but helps the housing market in the long run because it lets banks get through the backlog and eventually move on.
Borrowers are building more equity in their homes. Our colleagues at Bloomberg News report that homeowners have made the biggest jump in home equity in more than 60 years. Half of borrowers who are refinancing are paying down some of their debt and reducing their loans. They’re also refinancing into shorter-term loans that have higher monthly payments but let them pay down principal quicker. Overall, mortgage debt is down 7 percent since 2007—a small consolation for the decline in home values, which are down 23 percent over the same period.
Finally, if you’re looking for more data and a big-picture view, check out Harvard’s annual State of the Nation’s Housing report that’s out today. It also sees signs of recovery in the market and says unless something comes along to dent the broad economy, the housing picture should become even brighter.
Weise is a reporter for Bloomberg Businessweek.

We hope you have a great weekend.  As always, if you would like to discuss the local market trends, feel free to contact our office.

New Durango Welcome Center Opens on Main Ave.

If you are going to be in Durango check out the new Durango Welcome Center on the corner of Eighth Street and Main Avenue, in the former Durango Music space, that opened its doors on May 25, 2012. Designed to be a central, one-stop resource for tourists and locals alike, the Welcome Center is ready to give directions, offer eating and lodging recommendations and sell tickets for upcoming shows and events.  It’s a handy resource in our business of selling real estate because there are numerous questions daily from the multitude of visitors to our town who want to know about the town and its attractions as they pursue that perfect property to buy.

I thought you might also be interested this week in some findings just released by The Census Bureau on new single family residential construction built in 2011. Here is a table comparing  last year to 2006:

If you have any questions, please do not hesitate to call me. You can reach me, Don Ricedorff, at The Wells Group 970-375-7014, don@frontier.net, or at my website at durangorealproperty.com.

Don Ricedorff is a licensed real estate broker in the State of Colorado, with 18+ years of experience, and he resides in Durango Colorado.He has numerous real estate designations, which have provided him with an unparalleled education to assist his clients. The designations include:

CRS, Certified Residential Specialist
CRB, Certified Residential Broker
CCIM, Certified Commercial Investment Member
CDPE, Certified Distressed Property Expert
ABR, Accredited Buyer Representation
GRI, Graduate of Realtor Institute
RSPS, Resort and Second Home Property Specialist
CIPS, Certified International Property Specialist
SRES, Senior Real Estate Specialist

He is also an active volunteer in the community and his church. His highest aspiration is spending time with his wife, Janet, and his three children Kelly, Katie, and Kyle. His other interests include playing tennis, fly fishing, hiking, boating, and water skiing.

2012 May See More Shadow Inventory

In the sale of any kind of commodity one of the keystones of market analysis is the concept of supply and demand.  In a balanced market there is an inventory of the product that is in line with the demand for that product.  In real estate we have been in a buyers market over the last several years because the existing inventory of property (i.e. sellers) in La Plata county has far exceeded the demand (i.e. buyers).  We are beginning to see a more balanced inventory as shown in recent statistics showing that inventory and days on market are going down and transactions are going up.  If you would like to review recent Residential Market Statistics for La Plata County that delineate these trends please contact me and I will send you a copy.

One of the things we want all of our Sellers to continue to have front of mind is the concept of the shadow inventory of distressed properties (foreclosed properties or short sale properties) that most probably will be coming on the market later this year.  Just within the last 60 days a road map was published by the federal government that will cause/allow the banking industry to start releasing their foreclosed properties into the marketplace.  According to an article published this week at dsnews.com it will take 46 months to clear the market supply of distressed homes nationally according to estimates from Standard and Poor's Rating Services based on first quarter 2012 data.  There have been at least 3 other major news articles in the last 30 days about this issue, including Reuters on April 4, 2012 that indicated that Americans are bracing for the next foreclosure wave and CNN Money just a couple of days later with their own story about the  flood of foreclosures expected to hit the housing market in 2012.  And then ABC News on their blog on April 26, 2012 put it right to the pricing situation in their article: “More foreclosures drag on home prices.”  I'm putting the cites for these articles below if you are interested.

Although we don't know how many more distressed properties will be coming on the market in La Plata county this year there is no doubt that there will be some.  The below chart will give you a visual as to why we think this could have a fairly significant impact on supply and demand.  We are not suggesting that this wave of possible foreclosures and short sales will really "sock" our market again and put tremendous downward pressure on prices, but we do think that it will be a factor causing pricing not to increase over the foreseeable future.

citations:  http://www.reuters.com/article/2012/04/05/US-foreclosure-idUSBRE83319E20120405

                    http://money.cnn.com/2012/04/13/real_estate/foreclosures/index.htm

                    http://abcnews.go.com/blogs/business/2012/04/more-foreclosures-drag-on-home-prices

•   http://www.dsnews.com/articles/shadow-invento..

Bears Turn Bull

We get asked at every gathering we attend "How's the market?"  And, for the first time in several years, we are excited to report the overall good news that the Durango real estate market is looking good.  We still face some hurdles, and Don has discussed those with you as you've gone through the listing process and we've also tried to highlight some of the remaining market issues in past communications.  But, we believe that the worst is behind us.  We aren't the only ones who think so.  Below I am reprinting a chart that shows the sentiments of four separate national economists all of whom who are now bullish on the real estate market.  The gears have slowly turned and the American public has better consumer confidence and as a group is realizing that now is the time to buy.