Barbara Salisbury

The parts of the equation:

Inventory: December 3, 2008

Homes and condos = 22,271 (a 19.12% decline in inventory from December 2007)

Mortgage Rates: At 4 year lows, hovering just under 5%.

Job Growth: Up in 2008 over 2007 and predicted to increase more in 2009.

These 2^nd two factors will cause more buyers to enter the market in Denver. This, along with the low available inventory, will cause the home prices to appreciate.

Our inventory is actually at a 5 year low. When there are not enough choices, buyers ten to buy more quickly, for fear of losing out on a good one. As houses sell faster, of course, the prices begin to increase. The only thing preventing them from increasing faster is the number of short sales and bank owned homes still in the market.

To substantiate the premise that homes are selling faster one only need take a look at the number of properties currently under contract. Currently there are 5,396 homes under contract and 12 months ago there were 5,045.

The number of houses sold in 2008 in the Denver area was off 6.47% from 2007. An interesting piece of data to consider is that December of 2008 had 2772 homes closed and November 2008 had 2602 homes closed. This is the first time in 6 years that December outperformed November in the number of homes sold. December 2008 homes sold total was only 22 units short of the 2794 homes closed in December of 2007. The real trend to watch is when a year over year sold data increases for each month. The Denver market will become a resurging market when you have a current month outperform the sold data from a previous year. A trend is a full 3 months in a row of increasing sold numbers, year over year. We, at Prestige Real Estate, LLC, suspect that the number of sales for 2009 will start to outperform the number of sales for 2008 each month starting early in the year.

The rest of the story about an improving Denver market is about the listing inventory which is at a low not seen in 6 years. The current homes that are active on the market as of Jan. 6 is 19,833. This represents a 19.03% reduction from January of 2008 and a 2438 unit decrease from last month. This total active inventory represents a 5.57 month supply of homes.

This is the first time since January of 2006 that Denver has experienced a monthly supply lower than 6 months for the entire market place. A 6 months supply is the breaking point where the market begins to change from a buyer's to a seller's market and prices begin to increase. It's all about supply and demand and the demand is increasing because of the very low interest rates.

However, the better way to look at this data is to break up the price ranges to show the difference in what is happening at lower end prices and upper end prices. Looking at the price range between $0 and $250,000 there are 8593 active homes. Using an annual rate of current sales, there are 27,593 homes closing in this price range. Taking the 8593 actives divided by the 27,593 sold properties, which equals .31, and multiply that number by 12, you get a 3.74 month supply of homes between $0 and $250K. That is quite a bit less than the 6 month breaking point mentioned above! There s no question prices are beginning to rise and will continue.

Let's go to the price range of $250,000 to $500,000 to see the difference in the market conditions. The number of homes that are active in this range is 6309. The total number of annual sales is 11,808 homes. Doing the same formula we get a 6.41 months supply of homes. This would indicate that this price point, in the next 6 months, will start to experience price increases as the inventory reduces below a 6 month supply. If the market inventory increases in this price point for whatever reasons, i.e. foreclosures, desperate sellers, etc. it may take to the 3^rd or 4^th quarter of 2009 to see appreciation, but it is coming and now offers a great time to buy in this price range.

The price range from $500,000 to $750,000 further explains why the deals in the Denver market are going to be above $500,000 for buyers. This makes for a perfect time for a buyer to move up as they can sell their home priced below $500K for closer to market value and be able to pick up an upper price range home at a discount. Add to that, lower interest rates that are currently being offered and there could not be a better time to move up. Here's why.

The current home inventory is 2262 in the $500K to $750K price range. The number of total annual sales in the price point is 2048 or a 13.25 month supply. This supply of over one year will really give the buyer the opportunity of a decade to buy his dream home in this price range.

If a buyer obtained a loan of $400,000 today and got a 4.5% interest rate, he would have a payment of principal and interest of $2,026. When the rates were 6% the monthly payment would have been $2398 per month or a difference of $372 per month. What this means in terms of qualifying for a loan is that the monthly income could be reduced by $1200 to qualify for a loan under today's lower rates. An even greater savings spread is created as you go up in price.

Another reason for a buyer to buy now is that even though a home priced at $800,000 may not appreciate much in 2009 and their current residence of $400,000 may appreciate at 3%, the potential appreciation in the $800K home will be better over a 5 year period. Take $400,000 times 3%, or $12,000 and do simple interest and you get a $60,000 appreciation over 5 years. A home at $800K at 3 % interest over a 3 year period equals at $72,000 appreciation. It is a much better time to move up now than before the $800,000 home starts to appreciate.

The next price range of $750,000 to $1,000,000 will even expand the buyer's ability to make a deal. Total inventory in this price point is 1077 and there is an annual closing rate of 656 homes which gives us a 19.7 month supply. Here's a price range that will be 18 months away before the supply reaches that 6 month breaking point we explained above.

What Should Buyers and Sellers Do to Make This A Successful Market for Them?

Sellers:

• Price your home at or below market value to attract the most attention. Do not worry about the low ball offers that may come in, but think about the number of buyers that will consider your home to be a deal.
• Make your home the best kept property. Spend some time and money doing any and all repairs needed. A fresh coat of paint and shampooed carpet go a long way in helping to sell your home.
• Clear the clutter and clean, clean, clean. The home that sparkles makes the buyer feel very comfortable about the possibility of living in that home.
• Be the most tastefully decorated in your price range and market. If you are not adept at decorating, hire a stager. Ask your realtor for a referral. Then listen to that stager and do what she says. Remember why we always love the model homes that builders provide. It is because they are so well staged.
• Price your home on the search numbers 0, 25, 50 and 75. What this means is that the buyers search properties in ranges like $200,000 to $250,000 or $250,000 to $275,000. Pricing your home at $250,000 allows for both searches to find you.

Buyers:

• Move up to a home you really want, but have been hesitant to move to due to the uncertainty of the market.
• Take advantage of the lowest interest rates in 40 years.
• Get pre-approved. Get a pre-approval letter from your lender to submit with your offer. This is more and more important today and a must for short sale or foreclosed properties. Pre-approvals usually last only about 45 days. Check with your lender to see how long theirs will last. Make sure you are ready to purchase during that time frame. Redoing your approval letter means doing another credit check which will lower your credit score slightly each time you do it.
• Get the seller to pay for your closing costs to assist in your purchase. The seller can pay up to 3% of the closing costs on most loans.
• If you are in the $0 to $250,000 price range, don't hesitate too long when you find that perfect home or maybe even the one that is almost perfect. It may be gone before you know it.

Both buyers and sellers:

Find a realtor who is knowledgeable in the area, who responds quickly and who will put in writing what they will do for you. Hire the one who will do the most, not the one who is the cheapest. You get what you pay for. Having a top notch realtor who is working very hard on your behalf is a must to help you as a buyer find the home you want and to get it for the price and terms you want or as a seller to sell your home quickly and for the best price.

Listing Inventory drops 18.733% in one year! This September shows an active listing inventory of 25,543 units for residential and condominium homes on the market. This is the lowest September inventory since 2004.

Active Listing Inventory for September of Each Year:
2004 -- 25,445
2005 -- 27,234
2006 -- 32,423
2007 -- 31,433
2008 -- 25,543

This low inventory reduction will cause buyers to change their buyer patterns from the last three years. When choices of homes are reduced, buyer behavior increases to make housing choices faster. As buyers make housing choices at a quicker pace, the number of sales will grow faster than the number of new active listings coming on the market, which will result in appreciation of homes.

Watch this inventory number go below 22,000 by January of 2009 and remain at lower levels through 2009 over previous years.

The under contract data continues to stay at higher levels than 2007. August of 2007 was the month the marketplace really turned sour in Denver, although it had been wavering for at least 20 months before that date. In September 2007 the data showed 5928 homes under contract and set to close. Just 12 months later in September of 2008, the marketplace is registering 7204 homes under contract. That is a 21.525% year over year positive growth. The lag in these properties closing is still a result of changing mortgage guidelines and processing delays.

Denver Area Homes Under Contract in Sept. of Each Year:
2004 --5723
2005 -- 7123
2006 -- 6404
2007 -- 5928
2008 -- 7204

Sold data continues to be the slower indicator of a rebounding market. As of August the number of properties closed still has not yet caught up with the lower inventory and higher under contract data lines. This fall season will start to see year over year changes where 2008 and 2009 will outperform the previous year in sold data.

Denver Area Homes Closed August Each Year:
2004 -- 5058

2005 -- 5040
2006 -- 4538
2007 -- 4343
2008 -- 4063

The yearly figures for sold data follow a similar trend. In the chart below, the larger columns are year-to-date solds. If we annualize these numbers we predict the Denver marketplace will expect to close 42,871 units for 2008. This number reflects only a 6.015% decline from 2007 and will be the 4^th year in a row of declining sold data for homes. We predict we have hit the bottom and 2009 will be the year of appreciation as inventories continue to decrease and home buyers have a change in their behavior to move quicker into the market.

Denver Area Homes Sold Each Year Through September:
2004 -- 35,936
2005 -- 36,134
2006 -- 34,310
2007 -- 32,907
2008 -- 30,010

What does this all mean to Buyers and Sellers? The average days on the market for residential and condo units has held consistent for three years. Given the facts of the foreclosure increases the last three years, the difficult mortgage guidelines since last summer and lack of buyer confidence in the housing market you would expect this number to rise, when in fact it has not.

Denver Area Days on the Market in July of Each Year:

2005 -- 75
2006 -- 95
2007 -- 95
2008 -- 98

For Buyers, the shrinking inventory will provide fewer choices. Specifically looking at the price ranges below, $500,000. The number of homes closed below this price point of $500,000 makes up 92% of all sold homes in Denver for 2008. The inventory below $500K is 19,080 as of today. This represents 75% of the total inventory in the market. So if there are 92% of the buyers buying below $500, 000 and there are only 75% of available homes in this price point, we would conclude that the prices of homes below $500,000 will rise as the inventory continues to be reduced. The current absorption rate for homes below $500,000 is 5.985 months. If you take an annualized number of sales in the 0-$500,000 range gives you 38,251 for 2008 divided into the current available inventory of 19,080 in this price point, you get .498 X 12 = 5.98 months. We believe that 72% of the year has been past through August 2008 to annualize our numbers.

For sellers, if you own a home below $500,000 it is good news as you can easily make your home stand out as there as not as much competition. Since real estate is localized to the neighborhoods, you must see where you are positioned against other properties in you sub area. Check out what features other homes have that yours doesn't. For homes above $500,000 sellers must be the first priced home the buyers will find and must be in perfect condition with outstanding features to attract the buyers looking for homes above $500,000 in today's market.

Since most of the sales have occurred below $500,000 that leaves you to read the data above $500K which has 6463 units available and 2469 units closed through August, 2008. If we make the same calculations there is approximately a 22 month supply above $500, 000. This, we predict, will start to drop fast and get more in the 13-14 month range by December, as more and more homeowners in these price points will take their homes off the market if they are not selling.

I set out on a mission to discover what types of projects our elementary schools here in Highlands Ranch are planning this year for raising funds. My purpose was to be able to give recognition on my blog to those schools that I feel have the most innovative projects.

In researching, I discovered that communication from the schools to parents and the public about these projects varied greatly from school to school. I utilized the websites of the schools to get my information. I chose this method as a more efficient way of gathering this inform- ation since I do not have contacts at 95% of the schools.

Here is what I discovered. Most of the websites have very little or no information about the school's fundraisers. Most of the information on fundraising was to be found in the newsletters most of which were linked on the websites. However, even in the newsletters, there was not much information in most cases.

My endeavor showed me that 90% of the schools need improvement in their communications, both on their websites and in their newsletters. This being said, there were some school sites and newsletters that stood out as being exceptional in their thorough presentation of information on upcoming projects.

The schools which stood out are Bear Canyon, Copper Mesa, Heritage and Wildcat Mountain. My first choice for the most innovative projects for fundraising is Wildcat Mountain. They are also first choice for the best newsletter and, from what I can ascertain, they are having the largest number of projects. My second choice for the most innovative projects and for the best newsletter is Heritage.

And here are the projects:

Wildcat Mountain Elementary

Collecting Campbells Soup Labels which they can exchange for items to use at their school

Selling Entertainment Books, Sally Foster wrapping paper and gifts and Wild for Bulbs-flower bulb sales

Collecting Box Tops for Education to exchange for items for their school

Encouraging the use of Target's Red Card which contributes to the school a % of all sales bought with the card

Recycling paper, plastic, cardboard, aluminum, inkjet and toner cartridges and cell phones

Family nights at Baskin Robbins and Red Robin when a % of the sales will go to the school.

Heritage Elementary

Recycling paper, plastic, cardboard, aluminum, inkjet and toner cartridges and cell phones

Selling cookie dough and Varsity Gold discount cards

Collecting Box Tops for Education

Family night with dinner sales and auctions

I encourage everyone to participate in the fundraising efforts of your neighborhood schools. The funds raised purchase things like trees, playground equipment, schools signs, items needed for school assemblies, computers, art room special equipment and more.

Tony's Market is a well known popular market in the south Denver area where you can shop for those gourmet cheeses, fine meats, specialty prepared foods and deserts, imported foods, fresh seafood, produce, gift baskets, baked goods, gourmet coffee and candy and giftware. Anyone new to the Denver area, quickly learns about Tony's.

Tony's was started in 1978 by Tony Rosacci. His three children have helped all along the way to make this a great company with 3 locations now in the Denver area. It started as a meat market and quickly became very popular for their completely natural meats. Because of Tony's desire to please they began to offer more than meats and have continued to add other products through the years.

Tony's also has a wonderful catering departement. They cater everything from the smallest event to huge events at some of the largest locations such as Phipps Mansion and Butterfly Pavillion. They work with you to create the party that you want with suggestions for menus and themes. Lissa Rosacci, one of the 3 children, is an expert in decor and will help you to develop your event decor.

Mick, another of those children, is the chef who creates recipes, teaches nutrition, contributes to the weekly newsletter of Tony's Market called "Buon Appetito" and appears on a special section of Channel 7 News on Sundays at 7 and 10 am where he shares great ideas for meals.

Tony's now also has a wine market called Tony's Wines. It is a separate store because of liquor laws. The one I shop is just outside the market side door on Dry Creek. There they will help you with suggestions for wines. They have always hit the mark on what I am looking for. They personally taste each wine before they sell it. If it does not meet their approval, they don't sell it.

All of these things make Tony's Meats stand out as a superior place to shop, but there is more to Tony's than these. Tony's also sponsors a cooking school and culinary exploration trips.

I have found Tony's Meats and Wines a great place to get a gift basket -- if you want both wine and food in your basket. You must buy any food items at Tony's Market and then buy your wine at Tony's Wines. Both the market or the wine shop carry a variety of baskets from which you can pick the appropriate one for you special person and then either shop can build your basket, shrink wrap it and add a bow. The charge for this, in my case, was only $10 for basket, wrap, bow and "building." You can get a great basket for giving on any special occasion like housewarmngs, graduations, promotions, anniversaries, new job or just "Thank You."

Tony's locations:
4991 E. Dry Creek Rd, Centennial
7421 W. Bowles Ave, Littleton
874 W. Happy Canyon Rd, Castle Rock
Websites: www.tonysmarket.com
Tony Rosacci's Fine Catering, 12001 E. Caley Ave, Littleton
Website: www.tonyrosaccicatering.com

Buon Appetito!