Posted on 04/10/2006 9:22:21 PM PDT by ex-Texan
Rising foreclosures are driving the supply of unsold homes in the Denver area to near-record levels, experts agreed on Thursday.
There were 27,309 unsold previously owned homes on the market in March, nearly 18 percent more than the 23,214 unsold homes a year earlier, and 5.7 percent more than the 25,848 in February, according to reports released on Thursday.
The reports, based on Metrolist Inc. data, were released by independent broker Gary Bauer and Steve McGuire of RE/MAX Professionals.
The record inventory of 27,798 homes was set in June 2004. McGuire adjusted the 2004 numbers for a change in the way they were calculated by Metrolist, which tracks sales of homes sold by Denver-area Realtors. Unadjusted, the record was 28,043 homes in June 2004.
Either way, it's likely that the record will be shattered next month, McGuire said.
"And then it likely will be broken again in May and again in June," he said, because that is when more homes historically hit the market.
"After that, what will happen depends on other contributing factors," such as the economy and mortgage rates, he said.
McGuire and a number of other Realtors said the number of foreclosures on the market is driving up the supply of unsold homes.
Foreclosures in the first quarter are hovering near 4,800, about 31 percent higher than a year ago.
"The increase in the number of foreclosures is putting additional homes on the market," Bauer said.
Rising mortgage rates, aggressive refinancing in which owners pulled out all or most of their equity, and homes bought with no down payments are driving foreclosures, said Ed Jalowsky, owner of Classic Advantage Realty.
"It's almost been a perfect storm," Jalowsky said.
He said many buyers of homes priced under $300,000 who locked in adjustable rate mortgages within the past few years are finding their monthly payments rising by $100 or $200.
"When they go to sell the home, they're finding that their home is worth less than their mortgage," he said.
Kelly Posiviata, a broker with K P Properties, Metro Brokers of Arvada, agreed that the glut of homes is being exacerbated by foreclosures hitting the market.
"A lot more (foreclosed) homes came on the market at the end of February and the first part of March, and I think that this nonstop flood of foreclosures is just pushing up the unsold inventory," Posiviata said.
She said home buyers who took advantage of huge incentives by home builders thought they were getting great deals. But if they've owned their homes for only a couple of years, they're finding that the market value is less than the sales price.
Posiviata advises buyers to stay in their homes for a minimum of three years, and preferably five years, if they want to be able make a profit, she said.
However, there are a few "hot spots," such as Cherry Creek, Bonnie Brae, Crestmoor and neighborhoods near the Denver Tech Center, where homes are bucking the trend and appreciating, she said.
It wasn't all bad news for the market, however.
A total of 6,102 homes were placed under contract in March, 24 percent more than the 4,914 in February. However, such large increases are typical for seasonal reasons. Homes under contract last month dropped 3.5 percent from the 6,325 in March 2005.
Both the average and median prices of homes rose in March from February after an unexpected drop in February.
The median, or middle, price of a single-family home rose to $247,500, a nearly 4 percent jump from $238,500 in February and a 3 percent increase from a year earlier.
However, McGuire estimated that two-thirds of the increase is due to the mix of homes sold - with more expensive homes driving up the median and average prices - and buyers taking advantage of no down payment programs and other incentives that artificially increase the reported sale price.
"Basically, the market is flat," McGuire said.
On the market
27,309 unsold previously owned homes on the market in March. That's nearly 18 percent more than a year ago and 7 percent more than in February.
4,800 Approximate number of foreclosures in the first quarter, about 31 percent more than a year ago.
I've seen these kind of articles many times on FR and I repeat the same thing over and over: It depends on what specific market you are in.
Here in Waukesha County Wisconsin, real estate is in good shape, and still going up.
Definitely a mistake. Those losing their homes because of it are (sorry to be so heartless) Darwin Award winners.
Please, this is meant to be a family forum.
I just sold my family home in Quincy, MA @ $90,000 less than originally listed ($650,000). It was on the market for 7 months and I only had ONE family make an offer the entire time. With inventory in the 100's in Quincy (just south of Boston) I was fortunate that the buyer's relatives live right next door...that's why they bought it. Even though I reduced the price significantly I still feel that I sold on the high end and look forward to shopping for some bargains in the near future
housing bubble popped about 2 years ago in Australia with benign effects....i know you dotn want to hear that but it is true...what peopel are conveniently ignoring is that the housing meltdown in CA and NE in the period 1990-95 was made worse by cuts in defense spending and the end of the cold war.
I can see that the Bostom market is falling apart fast. Nothing is moving. NH seems to be holding up a little better, but it's flat, at best.
If I had listed only 3-4 months earlier I probably would have sold for close to the full amount. The bottom has certainly fallen out in the Boston area.
Looking for vacation prop in NH....can you recommend any "best kept secret" type towns close to lakes and mountains?
It was never out.
Uh, as a maid. The prices, as quoted to me, were below minimum wage.
There is a glut of new condos in the Laconia, Gilford area in the lakes region. A new townhouse with 3 bedrooms, 2 baths, granite kitchen, and hardwood floors will run you just under two hundered thousand dollars.
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