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Bumper stickers don't seem to be as popular as they once were. Now
a days it seems the people who have them have tons of them so many you
can't even begin to read them all while driving down the street.
Today I grabbed a glimpse of out that said, "Where are we going? And why am I in this hand basket?"
Have you seen any good bumper stickers lately?
May 2007
| Single Family Average Price: (Detached Dwelling) | May 2007 | $318,904 |
| Apr 2007 | $322,510 | May 2006 | $315,257 | Condo Average Price: (Attached Dwelling) | May 2007 | $183,896 | Apr 2007 | $182,549 | May 2006 | $189,986 | Combined Average Price: | May 2007 | $288,905 | Apr 2007 | $293,016 | May 2006 | $287,327 | Percent of Sales Price Change: from May 2006 to May 2007 | Single Family: | 1.16% | Condo: | -3.21% | Combined | 0.55% | Total Combined Number of Homes for Sale: | May 2007 | 29,110 | Apr 2007 | 27,858 | May 2006 | 30,457 | Percent of Change in Available Inventory: (May 2006 vs. May 2007) | -4.42% | Number of Combined Homes Sold this month | May 2007 | 5,081 | vs. previous month | Apr 2007 | 4,399 | vs. same month last year | May 2006 | 5,010 | Average days on Market: (Combined Sales) | May 2007 | 102.44 | Apr 2007 | 109.90 | May 2006 | 96.58 | Absorption Rate: (number of weeks necessary to sell current combined inventory at current rate of sales) | May 2007 | 24.83 weeks | Apr 2007 | 27.44 weeks | May 2006 | 26.34 weeks | Median Sold Price:Single Family | May 2007 | $251,155 | Apr 2007 | $248,000 | May 2006 | $250,943 | Condo | May 2007 | $155,000 | Apr 2007 | $148,900 | May 2006 | $160,000 |
We all know the law right? When it comes to real estate the 3 most important things to focus on are; 
What about the second law? Everyone knows that;
Actually everyone doesn't know the second law. In fact I have investors tell me all the time how they have the bad habit of buying high and selling low. Sad but true, sometimes we make mistakes that can be avoided.
The market actually does present us with clues. Of course clues aren't hard set rules, but they are indicators that have been tested over time and found to have a certain amount of truth to them.
Leading indicators (12-18 months prior - signal market is at bottom)
As a market moves out of a slump and things begin to look more "normal" or "neutral" there are indicators that
will signal this happening.
Coincident Indicators
Lagging Indicators (signals to STOP buying and prepare to sell)
Know when to hold 'em, know when to fold 'em!
When it comes right down to it, timing is everything, particularly in real estate. Serious investors study the 
market
trends and know when to get in and know when to stay put or get out.
Amateurs have a way of over inflating a market to an extent that takes
a long time to come back. Reviewing the appreciation rates over the
years, one can see the ups and downs as recorded by the Office of Federal Housing Enterprise Oversight .
What do you see happening in your market?
The Denver metro market is experiencing parts of both Leading and Coincidental Indicators. There's been a lot of "blood on the streets". Builders have pulled back on inventory. Existing inventory has incentives for buyers and some offer additional incentives for agents to sell. Foreclosures are up, the press loves to bar-be-que real estate daily. Interest rates were increasing for awhile, but are now trending down...ever so slightly. Hearing news about investigations and indictments is the best part. The bad guys need to get put away.
The housing supply is not going down, but sales are consistent. We continue to sell the same (or nearly) amount of units as this time last year. Wise investors are in our market now, they will be picking up the slack.
Coincidental Indicators in the Denver Metro market are declining vacancies and rising rents. We are seeing appreciation in some markets. Many markets have not declined, they have held their own. The lovely jail terms for some are occurring, with more, many more to follow.
Denver and Colorado tend to run counter-cyclical to the rest of the country. We will be putting out of this flat mode soon.
What's a Homeowner/buyer to do?
Buying right now is a good thing to do. If you are a seller and don't have to sell, you may want to consider waiting awhile. If you must sell, the good news is, you may make out well enough on the "other end" to compensate for any loses on the sale. The most important thing for a seller to do right now is to be absolutely certain the home is priced right for this market and it shows like a model. Homesellers are getting lost in the crowd.
<Note: My notes and inspiration for this blog are from the NINJA Leadership Class by Larry Kendall of The Group, Fort Collins. I highly recommend this class as any of the NINJA classes now being taught by the Residential Sales Council>
When negotiating a residential real estate contract, there are
typically 4 items we "fight" over. Those are; 1) price 2) terms 3)
possession 4) personal property.
Buyers and sellers should consider these items and rank them according to importance. Sometimes the best transactions occur when we find the buyer and seller have matching needs. For instance a seller may not want to close until a date in the future, but is willing to take less for the house, just so he doesn't have to move twice. If the buyer is price sensitive but has the time to wait, this could be a win-win situation.
Terms include seller concessions to the buyer. This could be in the form of paying closing costs, prepaids or even buying down a point. Buyers who are "cash poor" but well employed welcome and need a seller's concession to make the transaction workable.
Personal property should never become an issue in a contract negotiation. If a seller wants to exclude personal property, i.e. a light fixture, it should be replaced prior to a buyer seeing it. Many real estate transactions have gone sour, due to the disposition of personal property. A wonderful divorce attorney once advised me not to fight over the toaster, since paying him by the hour was much more expensive than buying a toaster! Same holds true in real estate, don't be fighting over the curtains. For want of curtains you can lose the whole house!
Sometimes learning the position of the other side is difficult. Oftentimes it doesn't matter when you do, but frequently it makes out for a very smooth and delightful real estate transaction.
Knowing your area's Absorption Rate, helps to track trends. Understanding the market and where it is headed is part of our job as real estate professionals.
Absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a TREND. It is advised to consistently do the numbers each month, to be able to track a trend.
Getting Starting...
You need to know 2 figures.
1) How many listings are currently on the market?
2) How many listings sold last month?
You will be counting under-contract or pendings as listings, since they are not SOLD yet.
Multiple the number of solds last month by 12 (months).
Divided by the current listings equals # of Units that would sell each week.
Divide the # or units that should sell each week into the number available = absorption rate.
The Definition of Absorption Rate:
Number of weeks it takes to sell the current inventory at the present rate of sales.
Perspective
, what an interesting word. It relates to so many things, visual,
graphical, cognitive and point of view. Today I was trying to gain
some perspective on where my current client is coming from. She is
moving here from New York, the Borough of Queens. I've been to this
area, but I can't say that I paid attention to the real estate there.
So with the help of my trusty computer, I pulled up some comparables.
After about 5 minutes or so, I now have a reasonable perspective of where my new client is coming from and what her expectations will be. I love being able to speak to her needs. Understanding where a buyer is coming from helps me help them. Helping people by making them happy is what I try to do.
Denver Real estate and relocation is sometimes about changing a person's perspective. When people relocate to Denver, I try to learn what the biggest transformation will be for them. Depending on where they are coming from, I usually nail it on the head.
The east coast people like trees. We don't have trees (from their perspective) in reality we do, just not enough. Well I change their perspective by telling them to look at our HUGE sky. We can see for 100 miles, now if we had tons of trees we'd miss that awesome view! Have you ever seen 100 miles of snow capped Rocky Mountains?
BAM! Perspective changed.
<Photo is of The Yearling, by Donald LIpski taken by Kristal Kraft, Realtor>
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