Market watchers, economy watchers and skeptics alike are making noises about the overall economy looking up; well, the local real estate statistics for the first quarter of 2012 support that view.
If you were looking for the bottom of the housing market, it may have come and gone in January of this year. See the graph below provided by Heritage Title Co. of residential median prices to note that the lowest median price in the past five years was three months ago. To be more specific, the median home sales price in December 2011 was $154,000 while the graph shows March 2012 $10,000 higher at $164,000.
Coupled with that good news is the fact our market has swung back into what the real estate industry refers to as a seller's market. If, for example, there are an average of 250 homes selling per month and there are 2,000 on the market, that is said to be an eight-month supply of homes to sell. In a perfect housing economy, it would take eight months to sell those 200 homes. Anything more than a five- to six-month supply of houses for sale is referred to as a buyers' market.
As recently as December, there was a 5.3 month supply of homes. Statistics today indicate homes for sale have slid to a 3.6 month supply. In a meeting of Realtors this week, I heard of three homes sold in less than one week on the market, two properties that have recently received two or more competing purchase offers and many, many "buyer needs" requests because there just are not enough of the "right" homes on the market for the currently motivated buyers to purchase.
In terms of numbers of homes sold in the first quarter of 2011 compared to this year, there is a 618 to 696 advantage to 2012 sales - a 12.6% increase. In terms of dollar value of those homes sold, the 2012 increase over the preceding year is 4.9%.
Foreclosures still have to be part of the "homes for sale" conversation. The percentage of foreclosures filed in the first quarter is up 24% in 2012 over the previous year - 344 compared to 276. Of those properties where a foreclosure notice is issued, about one-third of the property owners "cure" their past due payments and hang onto the house. Small handfuls are sold at the weekly foreclosure auction held each Wednesday. The remaining foreclosures went through the whole process and were returned to bank ownership. That is where one of the mysteries of our local real estate market resides: There are currently only 95 homes listed for sale in the Multiple Listing Service as being bank- or government-owned.
Sale of foreclosed property will continue to drive prices down. Low numbers of homes for sale will try to drive prices up. More buyers are purchasing lower priced than higher priced homes. Interest rates continue to hover in the 4% range. Countywide employment numbers are reported as steady.
Where are you? The market indicators may be looking up on the whole. The market is looking up for you if you are a real estate investor. The market is also still ripe for you if you are a homebuyer who can take the time for that right house to come on the market and who is ready to make a strong purchase offer quickly.
The market appears to be on the upswing; jump on now and come out a winner.
Your comments and experiences about our local real estate market are appreciated. Send your comments, real estate questions or personal experiences to the Free Press for inclusion in a possible future article.
Source: Heritage Title Co. of Grand Junction
Doug Van Etten is an associate broker with Keller Williams Colorado West Realty in Grand Junction. For nearly two decades he has been working for and with homebuyers, sellers and real estate investors to meet their needs and accomplish their real estate goals. Van Etten is also the founder of the Real Estate Investors Network of Western Colorado (REIN).