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Colorado Real Estate Snapshot

Colorado Real Estate Industry Snapshot-2012

 

The following is a snapshot of Colorado’s housing market:

I. Nearly three quarters of 3.6 million or 67.6 percent of Colorado residents are homeowners.

 

II. CARHOF (Colorado Association of REALTORS® Housing Opportunity Foundation gave $132,308 in 2011 to non-profit housing agencies across Colorado totaling over 7 million since 1990.)

 

III. Colorado consistently receives top rankings nationally as a place to live and start and succeed in business. Bits of proof of this is supplied below:

a. Best State to Invest (OwnAmerican.com)- 1st

b. Technology Industry Employment Concentration (TechAmerica Cyberstates 2010)- 3rd

c. Research & Development Inputs (Milken Institute)-3rd

d. Best States for Business (Forbes Magazine)- 4th

 

IV. Colorado’s unemployment rate is currently at 7.9%

a. Service industries make up the largest portion of Colorado’s gross state product. The two largest service industries are real estate (10%) and health care (12%).

b. Tourism is the second largest industry in the State of Colorado.

c. The second-largest aerospace economy in the nation is right here in Colorado. The state’s aerospace economy consists of businesses providing products and services for commercial uses, the military, and space exploration.

d. Colorado is expected to add over 23,000 jobs in 2012, more than any other state.

 

V. How Does Real Estate Affect the Economy?

a. Real estate contributes 10% of the total U.S. economy’s output.

b. If real estate sales decline

i. Construction jobs decline

ii. Unemployment increases

iii. Real estate prices decrease

iv. The value of homes decrease whether they are being sold or not.

v. The amount of home equity loans the homeowner can get decreases.

c. In 2011, Colorado consumers spent more on goods and services, with retail sales increasing 6.5% for the year. In 2012, retail sales are forecast to remain relatively strong with a gain of 4%.

d. Colorado home builders, for the second year in a row, pulled more permits than they did the year before.

 

VI. Homes Sold by Colorado REALTORS®- Year End 2011 (based off same time period in 2010)

a. 57,730 Single Family Units were sold in 2011, an increase of 3% compared to 2010. 12,476 Condos/Townhomes in 2011 were sold, a decrease of 1% compared to 2010.

b. The median price for Single Family homes was $196,667 in 2011, a 2% decrease from 2010. The median price for Condos/Townhomes is $126,667 for 2011, a 10% decrease from 2010.

c. About 80 percent of homeowners in Colorado have lived in their house over 1 year and more.

 

VII. Who were the Buyers?

a. 50% of recent home buyers were first-time buyers

b. The typical first-time home buyer was 30 years old, while the typical repeat buyer was 49 years old.

c. The median income was $59,900 among first-time buyers and $87,000 among repeat buyers.

d. 20% of recent home buyers were single females, and 12% were single males.

e. When considering the purchase of a home, commuting costs were considered very or somewhat important by 76 percent of buyers.

f. New home purchases were at the lowest level in nine years—down to 15% of all recent home purchases.

g. The typical home purchased was 1,780 square feet size, was built in 1990, and had three bedrooms and bathrooms.

h. 11% of buyers over 50 purchased senior related housing or in an active adult community.

 

VIII. Foreclosures

a. Colorado is ranked 11th in the nation for its foreclosure rate according to the Denver Post.

b. The state Division of Housing says that foreclosures are down 28 percent at the end of 2011. Many predict the number will continue to slowly decline in 2012.

c. Foreclosure-related properties, which made up roughly one in five home sales in the third quarter of last year, sold for an average 34 percent less than homes that were not “distressed sales,” according to the latest data from RealtyTrac.

 

Sources: Bureau of Economic Analysis; National Association of REALTORS®; Macroeconomic Advisors; Harvard Joint Center for Housing Studies, Colorado Multiple Listing Services, Realty Trac, U.S. Census Bureau, State Division of Housing; EconPost, Everitt Real Estate Center, Leeds School of Business, Denver Business Journal, Denver Post, Wall Street Journal, Colorado Office of Economic Development

 

New homes are hot

New homes are hot

What’s new is well…new again. According to a late December Census Bureau report, new home sales are growing at their fastest pace in two years.

The report showed new home sales are up 15 percent from 2011.

This shows that as the market recovers, more consumers are using the opportunity to go after the home of dreams.

 

Buffett: ‘I’d Buy Up a Couple Hundred Thousand’ Homes

Daily Real Estate News | Wednesday, February 29, 2012

Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBC’s “Squawk Box” recently that he’d “buy up a couple hundred thousand” single-family homes if it was practical.

Buffett said that’s because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now.

“Housing will come back, you can be sure of that,” Buffett wrote in his annual letter to shareholders recently.

Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon.

“People may postpone hitching up during uncertain times, but eventually hormones take over. And while ‘doubling-up” may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure,” Buffett said.

Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be “dead wrong.”

Source: “Housing Market Forecast Beyond 2012 From Warren Buffet,” International Business Times (Feb. 28, 2012) and “Warren Buffet on CNBC: I’d Buy Up ‘A Couple Hundred Thousand’ Single-Family Homes If I Could,” CNBC (Feb. 27, 2012)

 

Rental Nation?

With low real estate values, low interest rates and a recovering economy, American real estate agents believe that 2012 is a great time to purchase both single family and multi-family rental properties.  Real estate agents feel that single family homes and luxury homes represent great investment opportunities.   What did real estate agents think are the worst opportunities in the 2012 real estate market?  Due to the glut of inventory in the real estate market due to short-sales and foreclosures, new construction condominiums, new construction single family homes, and land for construction were rated as the worst investment opportunities.

Description: US Real Estate Opportunities