Real Estate Q&A
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q: Last weekend I was at a party where there was lots of small talk going on. The weather ceased to be cocktail conversation after a few sentences, then conversation turned to local real estate sales. One fellow said a Realtor told him “now is a great time to buy.” A couple in the conversation said their neighbor’s house sold last month for about the same price as another neighbor had sold for almost a year earlier. So, what gives with this local real estate scene?
A: Many of us have heard the long-used phrase that “all politics is local.” Well, the same applies to real estate sales. When you listen to or read national news, you will hear the median house price being quoted as $199,000. According to local real estate tracking reports put out by both Advanced and Heritage Title Companies, the 2013 median home price here, depending on exactly which data they compiled, was either $167,000 or $178,000. In either case, each company’s analysis showed those prices to be about a 3.75-percent increase over the previous year’s median.
When you hear Denver real estate numbers, they really confuse understanding of our local market facts and trends. Denver is one of the fasting appreciating home sales markets in the country right now and prices there are exceeding 2008 values on most home sales. Median sales price there is $267,500, with an appreciation of about 10 percent over the past year.
When the couple in your conversation said neighborhood sales a year ago were nearly the same as a sale that closed last month, we do not know if a 3.75-percent sales price increase seemed large or small to them; or, it might be that particular 2014 home sale may not have appreciated from last year. After all, there have to be prices both higher and lower to determine either an average or a median. Another way to look at the good news is that the median prices for home sales in 2011 and 2012 sat almost pancake flat with prices those years stagnant at $159,500 and $160,000, so we have now seen positive movement in home prices at any rate of appreciation.
From an optimistic seller’s point of view, the real estate market is better than a year ago because we have seen:
• A 3.75-percent increase in home values as a whole.
• A 30-percent decline in foreclosures being filed and a 23-percent drop in those sales in their neighborhoods, helping stabilize neighborhood prices.
• The total dollar value of real estate sales rose by 13 percent from a year earlier.
• Homes valued in the $300-500,00 range sold in the same numbers in 2013 as 2007 — not meaning that a lot of them sold, but some are definitely selling.
On the good-news side for buyers:
• 18 percent of 2013 home sales were foreclosures, where buyers sometimes purchased for lower than market prices.
• New construction permits increased by 12 percent and most of that new construction was in the entry level price ranges.
• Nearly twice as many homes in the $100-150,000 range sold in 2013 as did in the boom year 2007.
• Interest rates get volatile when the stock and bond markets fluctuate, like they have been doing the past couple of weeks; however mortgage interest rates still hover for many buyers in the mid-4-percent range.
• New regulations on mortgage lending will not make getting a loan easier, though few are predicting qualified buyers will have any more difficulty getting a loan than under older regulations.
• Grand Junction overall housing prices continue to be the most affordable of any population center in the state; much more so than most of the Front Range.
Next time you are at a party, you can spike the “how’s local real estate” conversation with the tidbits you’ve learned here.
Doug Van Etten is a local Realtor with Keller Williams Realty. Since 1992 he has been helping buyers, sellers and investors accomplish their real estate goals. If you have questions you would like addressed, send them to the Free Press or reach Van Etten at DougVE@kw.com.
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