Jeffco News – 1-31-08
Colorado housing market holds potential Saturation of housing, deflated home prices will make state a top market in upcoming yearsby Jennifer GilbertJanuary 31, 2008 The country might be looking at a recession or already experiencing one, but that does not stop Lawrence Yun from making rosy predictions about the
Front Range housing market.A stabilized availability of housing and lowered housing prices should allow
Colorado’s real-estate market to fare better than others across the country, said Yun, chief economist for the National Association of Realtors.“National figures can dampen confidence and dampen home-buying confidence at the local level,” he said.
“Denver and surrounding areas will be one of the top markets in 2008. Homeowners can expect substantial wealth accumulation over the long-term.”
Yun’s assessment of the real-estate market looked at the housing crisis that has hurt Wall Street and damaged numerous large banking firms, but the problems being faced in those industries are largely due to sub-prime lending and other past mistakes, he said.
Yun acknowledged that Coloradoans with sub-prime rates have been hurt, but homebuyers with adjustable mortgage rates are not as likely to be affected.
According to National Association of Realtors data, sub-prime loans accounted for 9 percent of all home loans in 2007, but they made up 54 percent of all foreclosures.
The more stable prime loans accounted for about 50 percent of all loans and 33 percent of all foreclosures.
Glenn Dooley, a sales manager from Lakewood-based Mac 5 Mortgage, said the 30-year fixed rates are still at 45-year lows, meaning cheaper rates for homebuyers.
He said his company is seeing increased business because the lending crisis has put many of the company’s competitors out of business.
“The overall volume (of loans) is smaller, but the few lenders that are left are seeing greater volume,” Dooley said.
“People are realizing this is a buying opportunity.
Colorado homes are at less than value. The first quarter of this year will be a huge indicator of how Denver and the Front Range as a whole will pull out of it.”
New-home construction in Colorado decreased in 2007 to 21,000 from 30,000 in 2006 and 40,000 in 2005, but Yun said that was a proper correction for too many houses and too few buyers in that state.
“Colorado is going to stabilize more quickly,” Yun said. “It’s tough for builders because they realize they have to compete with more inventory and offer more incentives.”
Overall, the housing prices are depressed in Colorado because of buyers’ fear, but houses can be bought cheaply, at 17 percent of a middle class family’s income for a median size home, he said. That is far less than the expected 29 percent in Miami and 43 percent in
San Diego.
“There’s somehow this portrayal that this is the worst housing market since the Great Depression, but you have to put it in perspective,” Yun said.
“Sales grew dramatically during the past five years, and now we need to remove the excess boom and go back to normal, healthy market conditions.”
BY THE NUMBERS
Home mortgage and ownership status nationally in 2007
• Prime loans: 50.1 percent
• Sub-prime loans: 9 percent
• FHA and VA loans: 5.9 percent
• Owned outright: 35 percent
Source: National Association of Realtors
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I have had several people ask me why it’s important to conserve water as ‘we’re not in a drought anymore’. While this is true and water is now plentiful in the basin and surrounding areas there is more than just a low water supply to take into account. It’s simple really. Processing water to a potable form takes energy. Water conservation is energy conservation. The following are just a few ideas to help us all in our effort to become a ‘greener’ society. Simple ways to save Water:
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