Whose Market Is It?
The real estate market is wiping the sleep from its eyes as public health guidelines transition from stay at home to safer at home. Just as businesses are reopening, the heart-wrenching racial injustice protests have engulfed nearly every city in America.
2020 has been a year of historical proportions (what else could possibly happen?) and it’s changed the real estate market. Buyers and sellers alike are no longer only asking, “Do we love this home,” but are now asking questions like, “Is it big enough to work from home?” “Does it provide opportunity and space for my children to play if schooling at home?” And, ultimately, “Is it safe?” These shifts underline the new buyer psyche. For as much as the market remains a seller’s market, current events are changing buyer behavior which will impact limited inventories.
ShowingTime indicates Colorado’s strong buyer demand is working to reclaim pre-COVID growth, which is now near 2019’s weekly averages. Mortgage purchase applications recovered from their historic 35% drop in April to ending May with a full recovery of 9% year over year gain - up 6 weeks in a row.
Future buyer demand will be compounded by low mortgage rates. This past March 5, 2020, set the record for the lowest interest rates since November 2012. We’ve seen even lower rates in May with a 5-week streak ending at yet another historic low of 3.15% with a 0.8% discount.
Meanwhile, sellers remain staunchly opposed to listing more properties further straining the one-sided seller’s market and keeping months of inventory hovering at two months. New listings did appear in May -- 49% more month over month at the $300 to 499k priced homes and 116% at the $1M price point and above -- but not enough to balance the market. Pent-up buyer demand drove pending home sale increases in each price category from 75% month over month at the $300 to $499k range homes, to a 145% month over month increase for $1 million and above.
As overall economic and current events news may fluctuate over the next few weeks, I expect May to be seen as a transition month. Negative numbers should moderate from their April lows with jobless numbers to report 1.8M for the last week in May -- down nine consecutive weeks. The forecast for May’s unemployment rate is expected to be 19.5% up from 14.7% in April. Remember, unemployment numbers are counted during the week of the 12th so right before states started reopening. Current estimates for unemployment at the end of May are closer to 15% as people began to return to work and more than 80% of the unemployment was considered temporary.
As we began reopening, consumer confidence turned a corner as it started to rebound from April’s eight-year low, up 0.9 points. Stronger consumer confidence will lead to more consumer spending, which will drive the nation’s GDP. Positive consumer confidence is great news for both the housing market and overall economy as we rebound from April’s 13.6% drop in spending and 33% gain in savings. While an increase in consumer saving indicates a fear of the market and less consumer spending, I see opportunity.
The continued housing demand will continue to put pressure on home prices as pending home sales gobble up new inventory, which will put more pressure to increase home prices. Lawrence Yun is expecting national appreciation between 4 and 6% by the end of 2020. Realtor.com is expecting closer to 1%. Although DMAR’s median close price in May dropped 0.19%, it primarily due to the difficulty of getting Jumbo loans in April and May and more purchases at lower price points and more inventory at the higher end. Year to date median close price is still up 4.82% and expected to increase through the summer.
As the real estate giant is awaking from its power nap, everything is telling us that opportunity for stable growth in front of us.
Your Partner in Building Wealth,
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.