The Denver Housing Market – Positive Signs of Recovery
According to top economists, the Denver housing market (and that of the nation, in general) should start reaping the benefits of positive signs on employment and economic growth in the coming several months. This is great news for all who’ve endured what has been a challenging economic climate for the past two years.
First of all, employment is up. The Labor Department reports that there were 200,000 more job openings nationwide in February 2010 (2.7 million) than in the same survey the month before.
Secondly, the expected growth of gross domestic product (GDP), the main barometer of the U.S. economy’s health, is for a very solid 3% during the first quarter of 2010. Top experts are saying these signs are indicative of a labor market, as well as an economy that is in the midst of recovery.
How does that impact the real estate market? Expanding employment, like we’re seeing, that’s created by a momentum-gaining national economy are critical precursors to stimulating high demand and sales. The more plentiful jobs are and the higher buying power of consumers create increased demand for homes, which are already in somewhat short supply. As we’re headed into a traditionally stronger time of the year for housing (spring and summer), analysts are predicting a strong market over the next several months. And, because the federal tax incentives ($8,000 for first-time buyers and $6,500 for repeat buyers) will be expiring at the end of April, sales volume through the spring should be steadily improving to ramp up for the summer season.
As far as home pricing goes, evidence continues to mount that in most parts of the country, home values have either bottomed out or have turned positive. Here in Denver, we are one of just six cities listed in a Standard & Poor’s report last month that showed a year-over-year increase in prices – we seemed to have bottomed out in February 2009, but have been gaining steadily now since September of last year.
Nationally, last week’s Zillow home value report found values essentially flat on a national average basis. They were down by just three tenths of a percent, but up in some major markets of note. For example, Boston’s home values are up nearly 2% year-over-year, according to Zillow, and Los Angeles, San Diego, Philadelphia and Denver have registered gains after long periods of negative numbers.
Two other statistical hints that conditions are improving:
•The difference between listed prices and selling prices of homes nationwide is now smaller than it’s been in a year, according to real estate research site Trulia.com.
•Realty Trac found that foreclosures, which are clearly still a drag on the market, dropped by 2% last month, which is the second straight month of decline.