September 2023

May 15, 2024

SEPTEMBER NEWSLETTERDENVER IS THE #1 MARKET | TIME TO INCENTIVIZE SELLING | RECIPE OF THE MONTH

DENVER RANKED THE HOTTEST HOUSING MARKET

There is a reason Colorado has gotten expensive: it's a growing metropolis with great weather, low unemployment, solid job growth, and a fabulous lifestyle. All the economic indicators make Denver the hottest market in the county, according to U.S. News & World Report.


With Housing Market Index totals ranging up to 72.9 versus a national value of 66.6 in June, the following Metropolitan Statistical Areas (MSAs) are the hottest housing markets ranked from first to fifth:

  • Denver, Colorado – 72.9
  • Durham-Chapel Hill, North Carolina – 71.3
  • Raleigh, North Carolina – 70.3
  • Charlotte, North Carolina – 70.2
  • Cape Coral-Fort Meyers, Florida – 69.3

The Denver MSA has a mix of strengths: low mortgage delinquencies, low rental vacancies and a relatively healthy ratio of building permits to job growth. However, an extremely low housing supply of just 1.4 months in June subdued builder sentiment, and a low ratio of building permits to new household growth will continue to put a floor under home prices and increase pressure on rents until more housing inventory is released.

The overall Housing Market Index (HMI) of 73.3 for the Denver MSA rose 2.0% year-over-year through July, and improved from a reading of 72.9 in June. The three subindexes covering demand, supply and financial factors for July are also calculated on the same scale of 1-100.

  • Demand HMI – 74.4 (74.4 in June)
  • Supply HMI – 51.9 (50.7 in June)
  • Financial – 93.5 (93.5 in June)

Despite some declines in certain sectors and annual job growth less than half that of the national average, the job market in Denver remains healthy, gaining 19,400 jobs year-over-year through June 2023 (a rate of 1.2% versus a national increase of 2.7%). With a low unemployment rate of 2.8% versus 3.7% nationally in June, the Bureau of Labor Statistics shows most of job gains in Denver over the previous year in the areas of government, leisure and hospitality and services.

You can read more about the ranking and analysis from U.S. News and World Report here.

TIME TO INCENTIVIZE SELLING

People live intrinsically fluid lives. People move for jobs, during a divorce, after a marriage, before or after the arrival of children, or when they are ready to retire, just to name the most common reasons to buy or sell a home. Yet a U.S. housing market that used to be as fluid as it's people has come to a screeching halt. The U.S. system has effectively locked people into their homes, and that's a problem.

20 years ago, in the third quarter of 2003, there were 83 million owner-occupied homes in America, and they were changing hands at a rate of 6.5 million homes per year.

  • Today, the number of homes has increased to 96 million, but the rate of existing-home sales has slumped to just 4 million homes per year.
  • Percentage-wise, that's a fall from 7.8% of existing homes sold per year to just 4.2%.
  • Americans are staying in their homes for many more years on average than they used to, and that's mainly for financial reasons — not because they particularly want to stay put.

Aside from the ludicrously high direct cost of selling a house — often 6-10% of the sale price — tax law also provides a huge incentive for individuals to remain in a house that might be far too big for them and that could provide shelter for many more people.

  • Selling the house can trigger a significant capital-gains taxes. (One bill in the House of Representatives wants to exempt up to $1 million in housing capital gains from tax, for just this reason.)
  • Renting the house can allow an owner to continue to reap the benefits of a low mortgage rate — but they would need to pay income tax on that rental income.
  • Besides, the homeownership norm in many single-family neighborhoods is so ingrained that it sometimes doesn't occur to people that wanting to move doesn't have to mean selling.

The abundance of fixed-rate mortgages in the economy have rendered it largely immune to the Fed's rate hikes, thereby forcing the central bank into a "higher for longer" stance.The net is that there are complex systems that have been put in place to incentivize staying and to discourage selling. Until we can adjust some of these systems, people will only sell when they have to, not when they want to. READ THE FULL REPORT FROM AXIOS HERE.RECIPE OF THE MONTH: SANTA ROSA CHICKEN SALAD

This chicken salad is easy, healthy, and delicious. It's great for weeknight lunches or dinners and is also popular with a crowd. Prepare it the day before or an hour before. Substitute quinoa for rice for added protein. Enjoy!INGREDIENTS:

Salad:

  • ¾ cup (170 g) wild rice blend (see note)
  • 2-3 cups cooked diced or shredded chicken, rotisserie chicken is a great option (see note)
  • 1 red bell pepper, diced
  • 1 cup chopped sugar snap peas, chopped, blanched asparagus works great as a sub
  • 1-2 avocados, peeled and diced
  • 1 head butter lettuce, chopped (optional)

Dressing:

  • ⅓ cup unseasoned rice vinegar
  • ⅓ cup neutral-flavored oil, like vegetable, canola, avocado
  • 2 cloves garlic, finely minced
  • 1 tablespoon fresh lemon juice
  • 1 tablespoon Dijon mustard
  • 1 teaspoon sugar
  • ¼ teaspoon salt
  • Pinch of black pepper

DIRECTIONS:

  • Cook the rice according to package directions. Scoop the cooked rice into a large serving bowl and let cool to room temperature (alternately, the rice can be made ahead of time and stored in the refrigerator until needed).
  • Add the chicken, bell pepper, peas (or asparagus, if using), and avocado.
  • For the dressing, combine all the ingredients in a jar or blender and shake/process until well-combined. Add additional salt and pepper to taste, if needed.
  • Pour about 2/3 of the dressing over the salad and toss to combine. Add more dressing to taste or for desired consistency, if needed.
  • Serve immediately or refrigerate the salad for 1-2 hours (you may want to save a bit of the dressing and toss the salad with it before serving if it has been refrigerated).
  • Give the salad a good toss before serving.
  • The chicken and rice salad can be served: a) on its own, b) over a bed of chopped butter lettuce, or c) tossed WITH the butter lettuce. Yum!

Thinking of Buying or Selling?  Know someone who is?We are NEVER too busy for your referrals!

About FiveFour Real Estate

The name Five Four Real Estate derives its name from 5.4%, which is the average annual home appreciation rate in the U.S. over the last 50 years.  If you buy a home and put 20% down, you are leveraging your money 5X. A 5.4% increase in your home's value means a 27% ROI.

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OUR PROMISE TO OUR CLIENTS

This could be one of the largest and most important financial decisions you will make in your lifetime, and you deserve an experienced partner that understands the intricacies of Colorado real estate.

We promise to always keep you informed about the rapidly changing market and educate you throughout the entire process. We promise to protect your best interests and treat your home or investment like it’s one of our own. We promise to work our hardest to find the perfect home for you and your family with as little stress as possible.  

We value your trust and hope to continue supporting you in your lifetime even after your sale or purchase is complete. This goes beyond real estate to us, it’s the beginning of a lifelong friendship.

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