For the first time since April of 2006, a majority of U.S. homebuilders have expressed confidence about home sales, a sign that construction might help drive stronger economic growth over the summer months. The National Association of Home Builders (NAHB) /Wells Fargo builder sentiment index released this month rose to 52--a jump of 8 points from an index of 44 reported last month. This jump has been the largest in 11 years.

Any score of 50 or above means that a majority of homebuilders see home sales conditions as good.

Other indices that saw seven-year highs include measures of customer traffic, current sales conditions and builders outlook for single-family home sales for the next six months.

More and more potential homebuyers have entered the market, encouraged by steady hiring and low mortgage rates. Low inventory, along with the increase in demand, have created an environment where home prices have increased--causing bidding wars between buyers and an overwhelming sense of optimism about housing market conditions for homebuilders. Another result of these conditions has been increased hiring for construction jobs. In fact, the demand for skilled construction laborers has spiked in recent months.

Applications for new home construction reached a five-year peak in April, and sales of new homes rose to a seasonally adjusted rate of 454,000. This nearly matches the quickest pace since July of 2008. Although sales are still below the 700,000 rate that most economists consider to be "healthy," but they have risen 29 percent in the past year.

David Crowe, the NAHBs Chief Economist, commented on the positive trends in the homebuilding market. He explained, "builders are experiencing some relief in the headwinds that are holding back a more robust recovery.

The sale of new homes represents only a fraction of the housing market. However, new home sales has a major impact on the economy. According to NAHB statistics, each new home built represents the addition of three jobs for a year and generates about $90,000 in tax revenue.

Photo source: Toledo Blade

Posted in In The News, Real Estate Trends, Real Estate Market Conditions, Headlines

The metro Denver area saw 92 homes valued right at or in excess of one million dollars sold during the month of May 2013. According to Metrolist data, 86 of these homes were single-family homes and six were condo homes. The total closing cost for sales of these homes was $138.6 million.

Average price for single family homes included in the data set was $1,480,344 and average price for condo homes included in the data set was $1,867,240.

The highest priced closing of the 86 single family homes included in the data set was $3.9 million--with six bedrooms, 9 baths and 9,805 square feet.

312 single family homes have been sold this far into 2013, where the highest priced closing was $8.69 million.

For condo homes, of which there were 21 sold thus far into 2013, the highest closing price was $2.75 million.

Photo source: Kitchen Remodels.com

Posted in Real Estate Trends, Real Estate Market Conditions, Headlines

April 2013 saw the largest number of home sales across the U.S. in any month since September of 2007. In the U.S. West, new single-family home sales were up 30 percent Y-o-Y from April 2012 to April 2013, with 13,000 new homes for the former month. The total for the entire U.S. for the month of April was the highest for any April since 2008.

The above graph shows totals (in 1000s) for monthly new home sales for every month since 2003. It shows that 2012 was certainly the most active month since 2009, and based upon the data given, its safe to say that 2013 is likely to be the most active year in new home sales since 2008.

This second graph (above) shows new home sales for each month. The total for the U.S. West for April of 2013 was a six year high. After a long period of low activity, the number of homes for sale began to increase during the month of March 2013 and even more so during April 2013.

Photo source: divisionofhousing.com

Posted in Real Estate Trends, Real Estate Market Conditions

Colorado's Coincident Index rose 1.0 percent for the first quarter of 2013, according to the index report released by the Philadelphia Federal Reserve Bank. The U.S. coincident index rose just below that number at 0.8 percent. The index is calculated from nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursement deflated by the consumer price index (U.S. city average).

According to the report,

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for April 2013. In the past month, the indexes increased in 45 states, decreased in four states, and remained stable in one (Minnesota), for a one-month diffusion index of 82. Over the past three months, the indexes increased in 47 states, decreased in two (Wisconsin and Wyoming), and remained stable in one (Alaska), for a three-month diffusion index of 90. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Feds U.S. index rose 0.2 percent in April and 0.8 percent over the past three months.

The above graph compares the 3-month change for Colorado and the U.S. as a whole. It shows that for 13 straight months, Colorados 3 month growth rate has outpaced the nation.

This second graph shows Year-over-Year changes in index. For both Colorado and for the entire U.S., there has been an upward trend since 2011. Also, according to the report, Colorados Y-o-Y growth has outpaced the U.S. since 2012--the Y-o-Y index change for Colorado was 4.4 percent while the U.S. saw just 2.7 percent.

Photos in this post from divisionofhousing.com

Posted in Real Estate Trends, Real Estate Market Conditions, Headlines

Homebuyers in Colorado are willing to pay to live in subdivisions that feature government-protected open spaces, according to a new study released by Colorado State University. Colorado homebuyers are willing to pay premiums ranging from 20 to 29 percent on average, according to the study.

Sarah Reed, a scientist with the Wildlife Conservation Society, explains, "we were not surprised that there was an effect, but we were surprised by the magnitude." Reed was the principal investigator for "Comparative Analysis of Housing in Conservation Developments: Colorado Case Studies."

Many counties across Colorado have adopted land use guidelines in recent year that ask subdivision developers to set aside land for wildlife conservation. The study focuses on 205 "conservation area" subdivisions in five different Colorado counties including Chafee, Douglas, Larimer, Mesa, and Routt. These five counties are considered to be a representative sample of Colorado communities because they had large numbers of conservation developments.

On average, 62 percent of each development site is set aside a protected space for the communities included in the study.

Reed further commented on the trend, explaining, "our hope is that these strong results would give real estate developers more confidence in the value of conservation."

Developers say that in addition to the market benefit of including conservation land in their developments, building in these areas may save on construction costs. This is in large part because clustering homes together can reduce the amount of infrastructure needed to develop a subdivision.

Posted in Real Estate Trends