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Michael Clarkson

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Denver Market by Locale/City/Market - Mile High Home Hunter Realty

09-15-08
Michael Clarkson
Market Trend Analysis - Denver Metro Selected Towns/Cities
Based on information from Metrolist, Inc. for period August 7, 2008 to September 9, 2008.
Single Family Residences - All Price Levels
Excludes Housing Not Listed in MetroList
Note: Six (5.5 to 6.5) Months of Inventory Tends to Indicate Neutral Market, Over 6.5 Months a Buyer's Market, Under 5.5 Months a Seller's Market
6
Locale Active Listings 12 Months Sold Sold per Month (Avg) Months Inventory (MOI) Current Mkt State Under Contract
Arvada 522 1,339 111.6 4.7 Seller's Market 172
Aurora 1,922 4,952 412.7 4.7 Seller's Market 832
Boulder 154 260 21.7 7.1 Buyer's Market 30
Broomfield 340 732 61.0 5.6 Neutral Market 103
Castle Rock 1,108 1,199 99.9 11.1 Buyer's Market 146
Centennial 515 1,249 104.1 4.9 Seller's Market 163
Commerce City 378 882 73.5 5.1 Seller's Market 193
Denver 4,274 9,262 771.8 5.5 Neutral Market 1,598
Erie 166 313 26.1 6.4 Neutral Market 37
Golden 513 611 50.9 10.1 Buyer's Market 82
Greenwood Village 145 120 10.0 14.5 Buyer's Market 15
Highlands Ranch 484 1,325 110.4 4.4 Seller's Market 190
Lafayette 95 161 13.4 7.1 Buyer's Market 16
Lakewood 556 1,254 104.5 5.3 Seller's Market 192
Littleton 971 2,185 182.1 5.3 Seller's Market 235
Louisville 30 93 7.8 3.9 Seller's Market 8
Northglenn 128 443 36.9 3.5 Seller's Market 82
Parker 881 1,448 120.7 7.3 Buyer's Market 220
Superior 30 111 9.3 3.2 Seller's Market 9
Thornton 526 1,795 149.6 3.5 Seller's Market 312
Westminster 552 1,246 103.8 5.3 Seller's Market 173
Wheat Ridge 133 315 26.3 5.1 Seller's Market 41
Total of Selected Towns & Locales 14,423 31,295 2,607.9 5.5 Neutral Market 4,849
Total MetroList* 19,050 xx 3,581 5.3 Seller's Market 4,443
* Single Family Residences Only
http://www.MileHighHomeHunter.com
http://www.MileHighForeclosure.com
http://www.HomesInColorado.com/mclarkson
http://www.MileHighMLS.com
http://www.CashPathRealEstate.com
Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
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Denver Market by Price Point - Mile High Home Hunter Realty

09-15-08
Michael Clarkson
Market Trend Analysis - Denver Metro Selected Towns/Cities
Based on information from Metrolist, Inc. for period August 7, 2008 to September 9, 2008.
Single Family Residences - All Price Levels
Excludes Housing Not Listed in MetroList
Note: Six (5.5 to 6.5) Months of Inventory Tends to Indicate Neutral Market, Over 6.5 Months a Buyer's Market, Under 5.5 Months a Seller's Market
(How Calculated) A B C = B/12 D = A/C E F = A/E
Price Range Active % of Market Sold in Past 12 Months Sold Per Month Months of Inventory Current Activity Status Curr Month Under Contract Months of Inventory if Current Month Activity Level Continues
$ - $ 100,000 825 4.17% 4,055 338 2.4 Seller's Market 919 0.9
$ 100,001 $ 200,000 3,764 19.03% 11,267 939 4.0 Seller's Market 1,997 1.9
$ 200,001 $ 300,000 4,432 22.41% 10,668 889 5.0 Seller's Market 1,377 3.2
$ 300,001 $ 400,000 3,043 15.38% 5,300 442 6.9 Buyer's Market 683 4.5
$ 400,001 $ 500,000 2,104 10.64% 2,455 205 10.3 Buyer's Market 336 6.3
$ 500,001 $ 600,000 1,284 6.49% 1,294 108 11.9 Buyer's Market 144 8.9
$ 600,001 $ 700,000 956 4.83% 707 59 16.2 Buyer's Market 78 12.3
$ 700,001 $ 800,000 678 3.43% 423 35 19.2 Buyer's Market 71 9.5
$ 800,001 $ 900,000 510 2.58% 310 26 19.7 Buyer's Market 36 14.2
$ 900,001 $ 1,000,000 443 2.24% 183 15 29.0 Buyer's Market 24 18.5
$ 1,000,001 No Upper Boundary 1,742 8.81% 632 53 33.1 Buyer's Market 76 22.9
Total (Seasonally Adjusted)* 19,781 100.00% 37,294 3,108 6.4 Neutral Market 5,741 3.4
Total (NOT Seasonally Adjusted)** 19,050 xx xx 3,581 5.3 Seller's Market 4,443 4.3
http://www.MileHighHomeHunter.com
http://www.MileHighForeclosure.com
http://www.MileHighMLS.com
http://www.CashPathRealEstate.com
Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
* Uses 12-trailing months' average to smooth out the effects of Denver's purchase season (60% Apr - Sep; 40% Oct - Mar).
** Uses raw data to show the impact of current levels of purchases on current levels of supply. This causes substantial seasonal swings in months of inventory. MetroList cutoff date may likely differ from date of data shown above.
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The Cost of Waiting - or "How to Avoid Paying the Procrastination Tax"

05-24-08
Michael Clarkson

So, given all this, doesn't it make sense to wait? Not really. There is a potential cost associated with waiting, that I like to call "The Procrastination Tax". You pay it, and don't even realize it! And it's likely the biggest tax you will pay!

Well, remember when you bought that Jan Michael Vincent "AirWolf" Leather Jacket back in 1984, instead of putting that $500 in Apple Computer stock? Well, that $500 of Apple Computer stock, if bought on September 7, 1984, would be worth over $31k today.

What is the "AirWolf" Jacket worth today? Not so much, not even if it were signed by Jan Michael Vincent AND Ernest Borgnine!

Don't you wish you could have THAT decision back?

Like that decision you wish you could have back, here is an opportunity to avoid as costly a mistake by waiting in the market. I have shared this exercise with some active clients and they appreciated it -- the insight about the money lost to waiting.

So, let's assume this is you:

  • You have a $250k home
  • You want to buy 50% up (as most folks do) to a $375k home
  • You put down 20% (or $75k) with a $300k loan on your new home and are able to get a 6%, 30-year fixed mortgage
  • BUT, you wait, because you think you can get that last $1k or $2k out of the market and rates creep up.

What does that cost you? Well, depending on how long and how far rates move, potentially, a lot!

Take a look at this table.

Equity Consumed by Change in Interest Rates

Equity Consumed Due to Incremental Payments Resulting from Interest Rate Change Based On Estimated Loan Balance of $ 300,000

Interest Rate

Pmt per $100k

Based on Est Loan Balance

1 Yr

5 Yr

10 Yr

6.00%

$599.55

$1,798.65

$0.00

$0.00

$0.00

6.50%

$632.07

$1,896.20

($1,170.63)

($5,853.15)

($11,706.30)

7.00%

$665.30

$1,995.91

($2,367.07)

($11,835.35)

($23,670.71)

7.50%

$699.21

$2,097.64

($3,587.90)

($17,939.52)

($35,879.03)

8.00%

$733.76

$2,201.29

($4,831.71)

($24,158.53)

($48,317.06)

Even if you make no decision, you really actually HAVE made a decision - or acquiesced to the decisions the market is making for you. Even waiting and losing ½%, can cost you nearly $1,200 per year. The longer you delay, the more you pay...all for waiting. The market made that decision for you. I call it the "Procrastination Tax".

Now, if you think rates will go down, then you get some uplift.

Have rates come down? Do you think they will again? Conventional wisdom is betting against you.

Think about it: at 6%, rates can go only go down a numerical maximum of 6%, but they can go up INFINITELY!!! Though unrealistic that they would go up infinitely, it is more probable that an upward change would occur rather than a downward change.

BUT, that isn't the only cost of waiting.

You also have the cost of lost appreciation, too!

Lost Appreciation Opportunity

Appreciation

Price

Appreciation Rate *

1 Yr

5 Yr

10 Yr

Current Home

$ 250,000.00

2.03%

$ 5,065.00

$ 26,372.17

$ 55,526.31

Future Home

$ 375,000.00

2.03%

$ 7,597.50

$ 39,558.26

$ 83,289.46

Lost Appreciation Opportunity (from the time you first wanted to move until you actually did)

($2,532.50)

($13,186.09)

($27,763.15)

* Appreciation Rate Uses OFHEO Home Price Index for the trailing 5 years

Source: http://www.ofheo.gov/media/pdf/4q07hpi.pdf

So, you can lose on the front end with interest rate changes and on the back end with missed appreciation opportunity. If you waited one year to pull the trigger on the $375k home with the $300k loan, and saw rates go from 6% to 7% and held onto the home for 10 years, how much did you lose?

  • Incremental payments due to interest rate change (year 1 to year 10): $23,670.71
  • Lost appreciation (you only lose the 1 year of waiting, assuming prices stay relatively the same on both homes): $2,532.50
    • Remember, 2.03% is a fairly low appreciation rate for Denver and is only indicative of the past 5 years, not the next 5; the historical, national average is over 5%.
  • Total incremental cost of ownership caused by delay: $26,203.21 or 7% of the $375k home price (new home).

So, consider this email my $26,203.21 gift to you...but it's only good if you use it. So, knowing me just made you $26,203.21 - how many other Realtors® have done that for you today?

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Mile High Home Hunter - The Daily Dirt - Market Activity by Price Point

05-24-08
Michael Clarkson
Market Trend Analysis - Denver Metro Selected Towns/Cities
Based on information from Metrolist, Inc. for period April 4, 2008, until May 2, 2008.
Single Family Residences - All Price Levels
Excludes Housing Not Listed in MetroList
Note: Six (5.5 to 6.5) Months of Inventory Tends to Indicate Neutral Market, Over 6.5 Months a Buyer's Market, Under 5.5 Months a Seller's Market
Price Range Active % of Market Sold in Past 12 Months Sold Per Month Months of Inventory Current Activity Status Curr Month Under Contract Near Term Sales Trend
$ - $ 100,000 1,088 5.18% 2,756 230 4.7 Seller's Market 834 Seller's Trend
$ 100,001 $ 200,000 4,531 21.57% 10,903 909 5.0 Seller's Market 2,093 Seller's Trend
$ 200,001 $ 300,000 4,884 23.25% 11,467 956 5.1 Seller's Market 1,565 Seller's Trend
$ 300,001 $ 400,000 3,158 15.03% 5,883 490 6.4 Neutral Market 770 Seller's Trend
$ 400,001 $ 500,000 1,998 9.51% 2,710 226 8.8 Buyer's Market 364 Seller's Trend
$ 500,001 $ 600,000 1,267 6.03% 1,461 122 10.4 Buyer's Market 227 Seller's Trend
$ 600,001 $ 700,000 884 4.21% 796 66 13.3 Buyer's Market 116 Seller's Trend
$ 700,001 $ 800,000 681 3.24% 488 41 16.7 Buyer's Market 84 Seller's Trend
$ 800,001 $ 900,000 481 2.29% 373 31 15.5 Buyer's Market 42 Seller's Trend
$ 900,001 $ 1,000,000 363 1.73% 199 17 21.9 Buyer's Market 37 Seller's Trend
$ 1,000,001 No Upper Boundary 1,670 7.95% 720 60 27.8 Buyer's Market 124 Seller's Trend
Total 21,005 100.00% 37,756 3,146 6.7 Buyer's Market 6,256 Seller's Trend
Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
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Mile High Home Hunter - The Daily Dirt - Market Activity by Community/Locale

05-24-08
Michael Clarkson
Market Trend Analysis - Denver Metro Selected Towns/Cities
Based on information from Metrolist, Inc. for period April 4, 2008 to May 2, 2008.
Single Family Residences - All Price Levels
Excludes Housing Not Listed in MetroList
Note: Six (5.5 to 6.5) Months of Inventory Tends to Indicate Neutral Market, Over 6.5 Months a Buyer's Market, Under 5.5 Months a Seller's Market
6
Locale Active Listings 12 Months Sold Sold per Month (Avg) Months Inventory (MOI) MOI Chg from Prior Month Current Mkt State Under Contract Sales Trend Sales Trend Chg.%
Arvada 523 1,405 117.1 4.5 0.1 Seller's Market 202 Seller's Trend 73%
Aurora 2,227 4,769 397.4 5.6 (0.2) Neutral Market 891 Seller's Trend 124%
Boulder 141 302 25.2 5.6 0.7 Neutral Market 32 Seller's Trend 27%
Broomfield 372 815 67.9 5.5 0.7 Seller's Market 91 Seller's Trend 34%
Castle Rock 1,112 1,359 113.3 9.8 0.9 Buyer's Market 165 Seller's Trend 46%
Centennial 529 1,307 108.9 4.9 (1.8) Seller's Market 177 Seller's Trend 63%
Denver 4,868 8,766 730.5 6.7 0.1 Buyer's Market 1,744 Seller's Trend 139%
Erie 194 314 26.2 7.4 0.7 Buyer's Market 44 Seller's Trend 68%
Golden 466 676 56.3 8.3 0.6 Buyer's Market 108 Seller's Trend 92%
Greenwood Village 142 151 12.6 11.3 1.4 Buyer's Market 18 Seller's Trend 43%
Highlands Ranch 540 1,051 87.6 6.2 0.3 Neutral Market 202 Seller's Trend 131%
Lafayette 93 176 14.7 6.3 0.7 Neutral Market 29 Seller's Trend 98%
Lakewood 565 1,373 114.4 4.9 0.1 Seller's Market 185 Seller's Trend 62%
Littleton 943 2,750 229.2 4.1 0.4 Seller's Market 303 Seller's Trend 32%
Louisville 27 113 9.4 2.9 0.3 Seller's Market 14 Seller's Trend 49%
Northglenn 179 403 33.6 5.3 0.1 Seller's Market 82 Seller's Trend 144%
Parker 895 1,563 130.3 6.9 0.4 Buyer's Market 216 Seller's Trend 66%
Superior 50 124 10.3 4.8 1.2 Seller's Market 14 Seller's Trend 35%
Thornton 735 1,706 142.2 5.2 (0.2) Seller's Market 277 Seller's Trend 95%
Westminster 622 1,265 105.4 5.9 0.2 Neutral Market 196 Seller's Trend 86%
Wheat Ridge 133 283 23.6 5.6 0.4 Neutral Market 68 Seller's Trend 188%
Total of Selected Towns & Locales 15,356 30,671 2,555.9 6.0 0.1 Neutral Market 5,058 Seller's Trend 98%
Total MetroList* 21,004 37,717 3,143.1 6.7 0.2 Buyer's Market 6,299 Seller's Trend 100%
* Single Family Residences Only
Chg from Prior Month 438 (524) (44) 0.2 Buyer's Trend 473 Seller's Trend
http://www.MileHighHomeHunter.com
http://www.MileHighForeclosure.com
http://www.HomesInColorado.com/mclarkson
http://www.MileHighMLS.com
http://www.CashPathRealEstate.com
Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
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