Compliments of our Coldewll Banker Colorado President Chris Mygatt:
The Tax Credit Deadline is Coming! Buyers and Existing Homeowners: Don’t Miss Out!
Since the tax credit was extended and expanded in November, I’ve had the pleasure of visiting several of our offices. What I’ve heard during my visits is the following:
- Business has been up slightly over the last year
- First time home buyers are active
- Move-up buyers are not yet active…at least not now
And yet, from what we know, this is largely because they don’t know about the tax credit or don’t understand the importance of this recently expanded legislation. My goal, through my conversations with my Agents, through my blog and through any opportunity I receive, is to end that trend.
Buyers and sellers: I’ve been in this business for more than 20 years and in that time, I honestly haven’t seen a better time to buy a home, nor move-up into a new home. The reason for this is what I call the “perfect storm” in real estate. It’s what I call the three Is and P:
- Inventory: There are an overwhelming number of markets where inventory is down, but even with a decline year over year, there are still plenty of homes for buyers to choose from.
- Interest Rates: Mortgage rates remain at all-time near historic lows. This means higher purchasing power for buyers.
- Incentives: Along with tax incentives, the U.S. government has provided further extension and expansion of the first time home buyer and now existing home buyer tax credit but it is slated to expire on April 30, 2010.
- Prices: Affordability remains at an all time record level nationally and in many of our local markets here as well.
So knowing this, what can consumers do?
It’s time to act. And act quickly. With the April 30, 2010 tax credit deadline approaching, move-up buyers and existing homeowners must act almost immediately to ensure they may take advantage of the credit. In order to do so, they must prepare their home for sale, list the property, get it sold and get it under contract – all before April 30, 2010. And, might I add, close on their new property by June 30. If you’ve ever purchased a home you know how lengthy the process can be so if you are considering a move, now truly is the time.
When you are ready, I encourage you to visit ColoradoHomes.com to find a professional Realtor in your neighborhood who may help you. It’s important that you choose a professional Agent who knows the market and the inventory to ensure your listing and sale success.
I honestly can’t emphasize this enough. Over the last year we have seen the first time home buyer respond to the tax credits and incentives – upwards of 2.4 million first time home buyers entered into the market in 2009 – that’s close to half of all homes sold last year, according to NAR. But the move-up market has been somewhat stale. If you are someone who is considering purchasing a home, now truly is the time.
For our Agents, we can’t assume our clients know and fully understand the benefits of the tax credit. It is now more important than ever to get out there and share with the world just how many opportunities are available to our buyers.
And with that, let’s take a look at this week in real estate:
- Boulder/Longmont—Boulder reported the Boulder county market started 2010 with a bang, with sales and showings up sharply and listings following suit. This coming after two holiday weeks, so no big surprise but showings are up 105% over the preceeding weeks. Happy New Year! Longmont reported there was a major jump in showing activity. Up 43% week over week!! The price point for homes being shown is creeping higher and higher. Homes listed in the $350,000 range are among the top ten shown properties. Short sales are still a large part of those being sold. These short sale transactions are taking two to four months to close. It is a special buyer that can wait this long. Banks/lenders are getting a little better with approval processes on these deals. Homes in the upper price ranges are showing up on the foreclosed market. Some of these homes are amazing deals. Now is the time to purchase that dream home at a great price.
- Evergreen/Conifer—Evergreen reported we’ve had a total of 9 new listings so far in January. Seven listings went under contract during the last two weeks and a total of 146 showings during this two week period. There were four buyers put under contract, including a property listed at $2,500,000. Overall, activity has increased significantly since the beginning of the year over all price ranges, not just first time home buyers or short sale/foreclosure activity. Buyers that have been sitting on the fence for long periods of time now seem to be taking action. Conifer reported showing activity has increased significantly compared to December with a total of 88 showings for the month to date. Listing activity is increasing with tree new listings plus several listings in the pipeline. Two listings have gone under contract with four additional offers received over the weekend, two of which had multiple offers. Price ranges for under contracts are from $350,000 to $450,000 with several local buyers, an early indication of some movement in the move-up buyer category.
- Denver Central – Overall sold units were down from 2008 to 2009 but overall inventory was down at a greater % than were resales. The drop in inventory in 2009 is a very good sign for the Denver market & its future. Unemployment continues to be lower than the rest of the country which is helping the Denver market. With the extension of the tax credit to April 30, 2010, there has been an increase in first time home buyers looking for property. We’ve also had several existing homebuyers contact us for information on the $6500 tax credit. If you want to take advantage of these credits, time is running out. The inventory shortages in the lower end market has created multiple offer situations in that market. The inventory is substantially lower than it’s highpoint in 2007. Over 50% of the home sales in the Denver metro area continue to be under $250,000 price point. If you’re looking to sell a home, now is the time.
- Devonshire— Happy New Year! We’re all looking forward to a new year and a fresh start for the real estate market. We are definitely seeing the need for more inventory in most price points as buyers seem to be waiting for the “new” homes on the market. With the buyer incentives going away in late spring, February & March should be much better than January is shaping up to be. It seems slow & our showing numbers attest to this. With new inventory coming on the market, price & condition are still very important. Sellers should use this time to be sure that their homes are in tip top shape. The upper end of the market is still very slow but as we get closer to spring we’re hoping to see movement in this sector. We are looking forward to a steady improvement in the market as a whole.
- Douglas County— Our Southwest Metro office reports showings are increasing and buyers are ready to buy. We’re seeing an increase in activity in our listing inventory as Sellers are ready to list their homes and buy. Our agents are very busy with their clients, not only first time buyers but those that are ready to make the next move. We’re still seeing homes in the low $200,000 moving quickly as well as homes in the $400,000 range having an increase in activity & offers. Open houses have been terrific this month. Agents have been very happy with the activity & the potential business that they are receiving from their open houses.
- El Paso County— Colorado Springs reports the activity in Colorado Springs is steadily increasing week over week in January. With rumblings of more troops being moved to the area, we expect this trend to continue.
- Larimer County— The first quarter is starting to really rev-up the last two weeks. Showings have more than doubled since the last week of December & buyers are coming out in droves to see the new inventory. Most of the action is taking place in the lower price range from $250,000 & under. In fact, the median price is now roughly $215,000. Look to see a bump in closings & new listings this winter due to the tax credit extension. If you are hoping to sell before the credit expires on April 30th to take advantage of the additional buyers available, you should really have your home on the market no later than the first two weeks in February. Northern Colorado has been fortunate in that we’ve not seen the huge decline in prices. In fact, the average sales price in Fort Collins has increased every year with the exception of 2008 (-0.9%) & 2009 (-4.7%). It goes to show that over the long term, investing in a home in this area is a pretty good idea!
- North Metro— The new year is starting out well in the North Metro office. We have 23 new listings on the market in the month of January so far. The lowest price $60,000 and the highest at $1,600,000. The average list price is around $300,000. We’ve put 32 homes under contract this month. The average under contract price is $202,000. The list to sale price is averaging about 90%. Some of the new listings from our office are coming from sellers who previously tried to sell their hom on their own. Our agents are able to meet with them & to explain the benefit, especially during this type of market, to list with a Realtor who is familiar with the market & has numerous marketing materials available to them.
- Parker— The buyers have been apprehensive, it seems at the start of the year. The number of showings is increasing gradually. We are seeing more relocations to the area and we’re seeing a little more activity in the bank owned sector.
- Southeast Metro— The SE Metro office is seeing a steady increase in buyer traffic. Our showings have increased over 55% since the first of the year & we set over 500 property viewings last week. It’s a great time for sellers to get their homes on the market as buyers are having somewhat of a challenge finding homes to fit their needs. Our luxury properties are experiencing a slight increase in traffic as well. One of our top agents successfully closed a $2,200,000 home in the final week of ’09. We’re confident that this market in the se metro area will see an increase in sales for the 1st quarter of 2010. Yes, sellers, there is no need to wait for Spring…..with less competition & a healthy buyer pool, now is the perfect time to position your property for a successful sale.
- West Lakewood— December sales were great to end the year. Now we’re looking forward to a great 2010. Seems as though the first week of January was slow, but it’s picked up since then. We have 35 under contracts for the first two weeks of January. Go tax incentives!!
I can’t emphasize enough the importance of acting on today’s opportunities. The three “Is” and “P” are helping to drive this market but the opportunities won’t last forever.
Thank you Chris for the Great INFO!
Northern Colorado Real Esate Specialist