It Feels Like More of the Same.. But Is It?
The Federal Reserve met at the end of July amidst great anticipation. It was assumed they would cut the Fed rate for the first time since 2008 but expectations for future rate cuts lead to a flurry of market excitement leading up to Chairman Jerome Powell’s comments. What we heard was a concern over global economic strength and the ongoing trade disputes. We also heard manufacturing is down and inflation is muted. Powell continued with business investment “has been soft” though household spending “has picked up from earlier in the year.”
A quick look at the numbers confirms that while the Fed frets about the durability of the US Economy, consumer confidence is up, spending is up, unemployment is low, incomes are rising and savings are near a three year high.
While on one side of the fence; Manufacturing Output has declined for 2 straight quarters... which consequently fits the technical definition of a recession. Personal Income is up .4% and Spending is up .3% This strong consumer spending is the primary reason the GDP growth rate has been within the 2% to 3% healthy range since the Great Recession. The first release of Q2 GDP just came out with an increase of 2.1%. Consumer Confidence is also at a near 18 year high. Unemployment remained unchanged at 3.7%
So what does all of this mean for housing? The drop in the Fed rate by .25% reduces borrowing costs. Both short term consumer costs, credit cards, car loans, HELOCs and short term Mortgage ARM loans as well as manufacturing/building costs. This would include reducing development and construction costs for homebuilders at a time when labor and material costs are increasing... leading to an increase in the inventory of homes for sale. Good news, right?
Inventory continues to regain strength as active homes for sale increased year-over-year by 22.5% to 9,359. The last time Inventory broke 9,350 was in November 2013. More homes for sale gives buyers time to be discerning; to wait for the perfect home, confident more will become available.
Mortgage Rates continue to remain low. At an average of 3.75% (with a .5% discount), rates today are less than a half point higher than the historic lows of 2012 and .75% better than they were a year ago. These low mortgage rates are helping affordability!
Appreciation remains muted but positive. DMAR stats utilize Median Sold Price as the measure of home values. At the end of July, it landed at 1.2% year to date gains and 4.58% year-over-year. We all know, real estate is hyper local. A quick look at the 90 DMAR zip codes will demonstrate a wide range of price changes from +21% to -18%.
Year to Date Sales units are down 1% while volume is up 1%... super exciting, I know. But the reality is, last year was a great year! The fact we are tracking with 2018 confirms this is still a strong market.
Days on Market are up 37.5% WOW, but really? Median Days on Market is up from 8 days to 11 days. More inventory, more choices equates to buyers taking more time to consider choices.
Close to List Price is just under 100% at 99.4%, but this is highly dependent on purchase price. With homes over $1M at 97.6%, $750k to $1M are 99%, $500k-750k are 99.3% and $300k-500k are 99.75% price to list solds. Sellers who want to sell fast need to be smart about how they price their homes. This has never been more true than now.
Still a Buyers Market? It doesn’t feel like it, but Months of Inventory only hit 4.93 for single family and 4.36 for condos over $1 Million. All other price points are at or below 3 months of inventory.
Powell stated the Fed made a “mid-cycle adjustment”... what does that mean exactly? Is he expecting 10 more years on this already longest running expansion? Wouldn’t we all like to shine up our crystal balls?
Do you want to know what’s going on in the market and how to continue to take advantage of the slow moving shift? Or, better understand how we can utilize all of these facts and figures to help our clients make good decisions when it comes to buying or selling real estate? Then give our team a call! We are experts in helping clients build wealth through real estate.
The Rueth Team of Fairway Independent Mortgage Corporation
The Rueth Team is dedicated to our clients success. It is this driving mission that keeps our team constantly learning and pushing beyond our boundaries. We find the solutions other lenders simply can’t (or won’t). We make a commitment to each borrower, fulfilling it with hard work, constant communication and creative problem solving. When a referral partner gives our name, they are confident knowing they are giving their clients the best chance of a smooth, successful experience.Learn More
NO OBLIGATION TRAINING: Market Mastery & “Done for You” Marketing tools delivered every 3rd Thursday (occasionally Tues) of the Month so you MAKE MORE MONEY! Nicole Rueth with Fairway Independent Mortgage Corporation, together w/ guest speakers from a range of professional disciplines, will be presenting monthly updates on industry statistics and market news you can use to help educate and motivate your buyers and sellers. Walk away with talking points, slides & information to set yourself up as an industry expert.
Alison P. from Wheat Ridge, CO
Nicole was wonderful to work with! The experience was so much better and more personal than working with a large company where you might not have contact with the same person throughout the process. Nicole was extremely communicative, easy to reach and talk to, and went out of her way to make this the most positive experience for my family. She worked so hard to meet our tight deadlines and made the entire experience smooth and stress free. I would 100% recommend working with Nicole and the Rueth Team!
stacieandtomwedding from Denver, CO
Nicole and her team were responsive, professional, and supportive as they walked us through every step of the loan process. We highly recommend the Rueth Team and will reach out to them with any future needs!
Natalie W. from Idaho Springs, CO
We’ve used The Rueth team twice now and have had a seamless experience both times. She and her team are knowledgeable, friendly and helpful. When I contact them they are very quick to respond. I would continue to work with The Rueth team in the future!
Shelby from Denver, CO
I used Fairway and Rueth’s team when purchasing a home recently and they were outstanding throughout the entire process. One of the staff on the team was even out on leave for most of the process and you wouldn’t have even noticed. Everyone I worked with provided very friendly, personable and knowledgeable service. I knew what my options were and everything was done in a very timely fashion. They even were able to find me some closing clost assistance so that I was able to have some money in my pocket left at close to do some work on the house. This was the third home I’ve bought and Rueth’s team was by far the best mortgage company I’ve worked with and I would recommend them with my full confidence.
Andrew C. from Wheat Ridge, CO
Nicole was fantastic to work with. She's responsive, knowledgeable, and able to make last minute changes when necessary. Working with her was a nice change from big-box mortgage companies. When last minute things needed to be fixed she did them promptly, and made sure we made it to closing without a hitch!
Mr. and Mrs. Walls from Idaho Springs, CO
We were impressed with the professional, personable service we received from Nicole and would recommend her to other home buyers. She helped us get pre-qualified quickly, making our search more productive.
Kathleen Cain from Palmer Lake, CO
Excellent team! Would highly recommend! If I ever have to do this again I would call Nicole Rueth! Her response to any of my questions was answered immediately and with great accuracy! Couldn't have been any better!
Paige M from Morrison, CO
Nicole and her team did an amazing job not only in keeping me informed of all the processes that go into selling and buying a home, but they were professional and knowledgeable! They answered all my questions, and made it easy to understand! I will never use anyone else!
april3lynz from Colorado Springs, CO
Absolutely AMAZING group! I had a really rocky start with my home buying experience. I had a horrible realtor and I was going to go through a different lender. I dropped my horrible agent and found an amazing realtor who was just phenomenal, and she referred me to The Rueth Team. My experience with them was quick, painless and simply amazing. I had very little stress and their team was so helpful. I had a moment of panic and I called, they were able to explain everything to me without confusing me more and went over every detail of my process moving forward with me. They had no hidden fees and were straight up and up front with me the whole way. I'm extremely grateful to them. In less than a month I am moving into my new home!!
Jeff D. from Denver, CO
I've closed two mortgages prior to this one with The Rueth Team, and this was by far the smoothest lending process I've had. Nicole, Peter, Emily, and Robbin were terrific communicators, provided me with honest feedback, and were simply easy to work with. They're true professionals and I'd happily work with then again on my next loan.