Jan 2008 Market Update - A Silver Lining?
As is typical during the fourth quarter, showings for the last three months of 2007 were slow. Our showing service averaged less than 10% of the listings being shown daily during November and December. These numbers are similar to 2006,
which was impacted by our back-to-back blizzards.
MLS inventory remained fairly static with 24,603 homes and condos on the market in December up only .26% from the same time last year. A positive sign was Days on Market (DOM) which has fallen about 5% from last year, to 107 days. Now for the bad news ----- prices have dropped more than 10% from this same time last year. And, more than 51% of the Showing Service's Inventory is vacant.
Looking at the national picture, HSH Associates (hsh.com), the nation's largest publisher of consumer loan information, reports the Mortgage Bankers Association is predicting the residential market will bottom out in '08 before beginning its recovery in 2009. And, the infamous Case-Shiller Index reports the largest one-month decline in resale home prices since records were kept for the period September-October 2007.
On what is hopefully a brighter note, since the first of the year, weekend Showing Activity has increased dramatically. The FED cut rate in mid-December, mortgage rates dropped shortly after Christmas and home buyers seemed to finally realize it about New Years. Saturday, January 12, 2008 was the busiest day for our showing service since June 2007. There were 1077 showings, which is almost 20% of the active listings and the previous Saturday was similar with 18+%.
Financial prognosticators continue to predict a gloomy 2008 while Wall Street tries to figure out the real impact of the implosion of the subprime markets. But since Colorado has NOT experienced the speculative home price appreciation that other parts of the country are coping with, we can, reasonably, expect to see a firming of values and a positioning for a more positive 2009. On the population front, Tucker Hart Adams, noted local economist (who correctly forecast the nation's current downturn several months ago) is predicting a Net Migration of 63,000 up almost 10,000 from 2007. It is anticipated our statewide population will top 5 million - a positive for the real estate market.
9NEWS reported on Wednesday, January 16th "Only 12 major markets in the country provide a more secure housing market than Denver", this, according to a risk report by PMI Mortgage Insurance Company. PMI Mortgage says there's less than a five percent chance that home prices will decline two years from now. The risk index considers the number of foreclosures, homes for sale, unemployment rate, housing affordability and past changes in home prices when making its rankings.
Denver's low unemployment rate likely helped the cities solid ranking.