November housing market sizzles | Inside Real Estate News

This 2,238-square-foot home in Green Valley Ranch is priced at $250,000, which was the median sales price in November in the Denver area.

The average price of a single-family home sold in the Denver area in November was $306,773, the highest sale price for a November since 2006, the year the market peaked.

Meanwhile, closings were up 20.3 percent and under contract rose by 15.9 percent, on a year-over-year basis, while the number of unsold homes available plummeted 30 percent.

?Take into consideration that there have always been cycles in the industry, I feel this ranks as one of the top Novembers we have?ever experienced,? said Gary Bauer, who released a report based on Metrolist data.

?November was simply an excellent month,? Bauer said.

Bauer, analyzed the MLS data as an independent Realtor, not as part of his official role as the current chairman of Metrolist.

Metrolist, also released a report.

?In the second half of this year, under contracts and sales have been neck-and-neck,? said Kirby Slunaker, President of Metrolist, the provider of REColorado. ?When you take the steadily dropping days on market figures into account and factor in the pace of under contracts to sales, we assume December to close out strong.?This is good news for sellers in today?s housing market.?

Slunaker noted the market continues to experience double-digit growth for home sales.

?Year to date, home sales are ahead of 2011 by 18 percent with almost 43,000 homes sales this year, which is comparable to 2008 sales activity,? Slunaker said.

?Compared with prior month-end figures for November, we hit an all-time low for inventory with less than 9,000 homes on the market this past month,? Slunaker continued.??This, combined with sales volume that has climbed back up to November 2005 figures, should keep pricing stable. We?re seeing some remarkable activity in the metro Denver market this year.?

The last time there were fewer homes on the market was in January 2000, when there were 8,010 homes for sales, Bauer?s research shows.

?The absolute lowest point I have tracked was in December 1993, when there were 7,711 homes on the market,? Bauer said.

In the first 11 months of the year, buyers closed on 42,899 homes, 18.4 percent more than during the same period last year, when there were 36,231 closings.

Indeed, closings in the first 11 months have already eclipsed the total closings in 2011 by about 9 percent.

Buyers have put 53,322 homes under contract in the first 11 months of the year, 18.7 percent higher than the same period last year and 12.5 percent more than all the contracts in 2011.

The median price of a single-family home sold and closed in November rose to $250,000, 8.7 percent higher than the $230,000 in November 2011.

?I think prices are rising because of the mix of homes being sold and appreciation,? Bauer said. ?Anecdotally, you here that some homes prices have risen by 10 percent or more. Prices are going up rapidly in neighborhoods where people want to live, like Highland, Berkeley, Sunnyside, and of course, Washington Park.?

There were only 8,847 unsold homes on the market at the end of last month, compared with 12,834 in November 2011 and 8,719 in October.

?The lack of inventory clearly remains our largest challenge,? said Peter Niederman, CEO of Kentwood Real Estate.

Tom Cryer, a broker with Kentwood, couldn?t agree more.

?There is nothing for sale,? Cryer said. ?We are logging more sales this year, but we could have even more if we had more inventory. I have clients living in apartments and hotel rooms, because they have nothing to buy.?

His clients who are renting because they can?t find a house are seeking homes priced anywhere from $200,000 to $800,000. Many of them are looking for houses along the southeast corridor, who want to be close to both downtown and the Denver Tech Center.

?We?re not a little cow town anymore,? Cryer said. ?With a metro area of about 3 million people, 8,800 homes for sale is not enough.?

Cryer was one of the more than 700 people who earlier this week attended the 48th CU Leeds College of Business Outlook forecast.

?One of the things that was brought up several times is that Denver is more and more looking like a coastal city,? Cryer said. Numerous times, Denver was compared with San Francisco, San Diego and East Coast cities, he said.

?Right now, there are a lot of investors looking for Class A properties in offices, apartment and warehouses. One speaker said he expects industrial rents to rise by 20 percent.?

Another speaker said that small energy companies are ?gobbling up? office space in and near downtown and they will soon be followed by energy service companies.

All of those factors bode well for the housing market, he said.

Homes on the market that are not selling are suffering from that ?failure to communicate line from the movie ?Cool Hand Luke,? Cryer said. ?The quote I am using right now is: sellers think it is next year and buyers think it last year.? I wish I still had the listings I had at the beginning of the year, because I could sell them for more today.?

Niederman was one of the presenters at the economic outlook on Monday.

He presented ?Headwinds? and ?Tailwinds? that he expects will have an impact on the market going forward.

Headwinds include:

• Financial reform that lead to increased regulations and buyer qualifications.
• Higher construction costs because of inflation.
• Potentially higher income tax rates.
• Potential elimination or caps for the mortgage interest deduction.
• The low inventory of homes.
• A growing ?shadow inventory? of short sales and foreclosures.
• Relatively high unemployment.
• Moderate consumer confidence.
• Global concerns.
• Fiscal Cliff rhetoric.
• Media.

Niederman also listed media coverage as a tailwind. Moderate consumer confidence and the low inventory also appeared on both lists.

?The media likes to tell a great story,? Niederman said. ?The media is all over real estate right now, because the real estate sector is the one that seems to be pulling the economy out of its doldrums and is a real bright spot. Two years ago, when real estate was the laggard dragging the economy down, media coverage worked against us.?

Other tailwinds include:

• Historically low mortgage rates.
• Rising prices.
• High rental rates.
• The ?three-legged stool? of housing affordability: mortgage rates, household income and the median sales prices.
• Distressed properties are a reduced percentage of the overall mix.
• Homeownership remains desirable.

Meanwhile, the Metrolist report today further validates what he presented at the CU form on Monday, he said.

?The metrics released today are just great,? Niederman said.

Chris Djorup, of Metro Brokers, said the Metrolist metrics reflect when he is seeing int the market.

?This is a validation of the marketplace,? Djorup said. ?There is a lot of activity, there is a lot of pent-up demand, there is a lot of frustration. Realtors have to be top of the statistics, so they can share that data with their client base. These numbers are substantiating everything I, and other Realtors I talk to, are experiencing in the marketplace.?

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

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Cryer said that he expects that 2013 will be a better year for home sales than 2012, as 2012 was better than 2011.

?We?re going to start to see more people put their homes on the market and then buy up int he same neighborhood,? Cryer said. ?It will return to more of a normal market.?

Of course, there are things that could cause the market to reverse course.

?Interest rates could jump or someone could drop a bomb on us,? Cryer said.

There also is that pesky Mayan calendar prediction.

?Who knows? Maybe on 12-21, the world will come to an end,? Cryer joked.

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Source: http://insiderealestatenews.com/2012/12/november-home-sales-sizzle/

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