Tag Archives: First-Time Buyers

December 2010 Market Report: A Difference of 10%

Moving into 2011, there are several trends worth paying attention to:

  1. Buyers are refusing to pay top-of-market prices. Quite simply, price sensitivity is enormous. If a home is nice and of interest, but overpriced by 2 or 3%, a buyer simply won’t offer. Last month in Briargate, the price differential (sold price divided by final list price) was 99.5%. In Central, it was 104%.
  2. There is really no such thing as an improvement or updating to a home any longer. Updating or improvements are expected and required for a home to sell at market value. A home that doesn’t have updating or improvements still might sell, but at a fractional percentage of market value.
  3. The buyers are younger than ever (47% of buyers in the last 12 months were first-time buyers. Average age of first-time buyers: 30).
  4. Sellers are wising up to these trends and getting increasingly aggressive with their pricing, matching it to market needs.

For the year, there have been 15,927 new listings (a 4% increase over 2009, but the pace of listing has slowed since August). There have been 7,554 sales (down 7.0% from 2009). In normal every day terms, a 4% gain here and a 7% drop there are incremental movements. That is not the case with these percentages. The probability of sale marketwide this year is 47.4%. At this time last year, the probability was 53.0%. That is a 10.6% difference in probability. That means it is an additional 10% MORE DIFFICULT for a seller to sell their home this calendar year than the previous year.

That 10% is expressed in Buyer’s Actions. Buyer’s are:

  • 10% more price-conscious   
  • 10% more suspicious of defects
  • 10% more demanding of perfect condition
  • 10% more likely to expect updating carpeting, paint, lighting and plumbing fixtures
  • 10% more likely to associate this “updating” as “standard” and not as “improvements”

The big question moving forward in 2011 is who the buyer will be. Will the buyer be as tough and as demanding as the 2010 Buyer? Will the buyer be making cold-hearted economic calculations on every single decision? Or will the buyer be a different buyer, one who is moving on with life and has to actually buy something to change a situation that is no longer tenable? (job relocation, expanded family, marriage, divorce, long commute, change in lifestyle… you know, the reasons people used to buy homes)

Market Report July 2010 (Mid-Year Stat Pack

Click For July 2010 Stat Pack

The First-Time Buyer Tax Credit perhaps worked too well: it fueled a sequel that provided both excess optimism and (later) damaging conditions that reversed much of the good accomplished. The intent and purpose of the tax credit was to activate the most easily activated segment of consumers (people who didn’t own homes, but aspired to own one) and convert them to homeowners. In the process, they would draw down the record inventory of homes, buy up and fix up bank-owned and distress-sale residences and help the market find equilibrium. A stable housing market would trickle to other segments of the economy and eventually stem the tide of the Great Recession. After November 30th, when the first version was to have expired, there were only 4301 listings for sale.  Despite the dreadful beginning to 2009’s sale year, the calendar year ended up 400+ units in sales,  and with 794 sales in November, the market had actually moved past equilibrium to a seller’s market: an equally-beneficial market is considered to be sitting at six months of supply, and November ended with a mere 5.4 months.
Today, during what is supposed to be the peak demand season of mid-summer, inventory is at 6.4 months. Last year at this time it was at 5.9 months. This is not a huge change, but it presents a serious problem looming ahead. This is shown in the first graph on Page 2, Single Family Home Comparison: in May and June of this year, the bottom fell out of the pending sales (ready to close escrow contracts) indexes once the second wave of tax-credit fever expired. In March and April, 1477 sales went to a pending status. In May and June, when the market demand should still be accelerating, only 1067 went to pending. In May and June last year there were 1360 pending sales. Instead of peak demand numbers in July, when they normally occur, it is fair to assume this year that July will be 10 to 25% off the pace it was at last year.
The real problem with a 10 to 25% downturn in volume is that it convinced a fair number of sellers (and agents) that homes were easy to sell again. What followed was the largest six month run-up in inventory in the PPAR MLS history: a 51% increase in only six months, and today 2000 more properties populate the MLS than started the year. With a 15% increase looming and a 10 to 25% decrease running the other direction, the market enters the second half of the year once again out of balance.

2815 Downhill Drive, Colorado Springs, CO 80918: Awesome Value @ $210,000

The first-time buyers have made a statement in Colorado Springs.

For properties under $215,000, there supply has dwindled to only 3.5 months.

In an area such as Northeast Colorado Springs, where the average price greatly exceeds $215,000, finding a home with 2700 square feet, 4 bedrooms, 3 baths (2 full and a 3/4) and a two car garage for $210,000 is a pretty good value.

The fact that the home has:

  • New Interior Paint

    Vaulted Ceiling Living Room

    Vaulted Ceiling Living Room

  • New Carpet
  • Newer Kitchen Appliances
  • Newer Oak Cabinets
  • Some New Milgard Windows
  • New Exterior Paint
  • New Composite Shingle Roof
  • And a 10,023 square foot lot

Well… that adds up to a huge value.

This 1977 home sure does not feel like a home from 30 years ago. With the neutral colors, the soft new carpet, the bright sunshine streaming through the windows and the handsome curb appeal, there’s a lot to like from the first impression.

2815 Downhill Drive, 80918

2815 Downhill Drive, 80918

Lasting impressions are built with the spacious size of the residence and the sheer number of quality benefits it offers. As a ranch plan, the main level has three different gathering areas… plus the kitchen. The large family room is anchored by a brick hearth gas fireplace. The living room enjoys vaulted ceilings. The spacious eating area can seat six. And the kitchen has fresh oak cabients, newer counters, newer flooring, a pantry and newer appliances. Three bedrooms are provided on the main level alone, with a hallway secondary bath re-done in 12″ tile and a master with a true, private, full master bath, also redone in high quality with 12″ tile.

The main level opens to the private backyard, which offers two storage shed and ample room to stretch out, garden or play.

Remodeled Kitchen

Remodeled Kitchen

The garage service door from the extra-long garage is accessible. Off of the garage entry to the residence is a 13′ x 13′ mud room, perfect for so many different applications.

Basement Rec Room

Basement Rec Room

The lower level is extremely functional. The finished rec room is massive with space for both media entertainment as well as games or lounging area. A fourth bedroom is built en suite with a 3/4 attached bath that has been remodeled like the main level full baths. A generous storage room provides ample storage and just for fun, there is a 10′ x 12′ bonus room, perfect for the hobbyist or home office.

With so much value in so many places, this is a home where long-term commitments are made!

For more on the area, schools and shopping, see the Community Page for 2815 Downhill Drive.