Why is the real estate market down?
First, the most simple explanation is supply and demand. According to Metrolist, Inc. there are currently 14,376 single family homes available in the Metro Denver area, and 4,569 condos! 3,052 homes sold last month, and 906 condos. That means it will take 4.71 months for the inventory of single family homes to sell out, and 3.37 months for condos. (that is if no other homes are put up for sale during that time.)
Next, banking was screwed up! There was legislation in place that made it possible for people who couldn’t afford a home to buy one. Not only did it make it possible, it made it mandatory! What do I mean by this? Well, it was illegal for mortgage companies NOT to provide this type of financing to people who couldn’t afford it! Jeez! I wonder how the banking industry went to Hell? People who can’t afford a home to buy in the first place, certainly cannot afford it after they move in, especially after their interest rates start to adjust up. That is where the majority of foreclosures came from. Pretty simple to see.
The good news is, because supply is greater than demand, the prices must fall to balance them out. The banks are getting back on their feet again, some thanks to T.A.R.P. (Troubled Asset Relief Program) some due to proper investing. Whatever the reason, they are back and lending again. And rates are phenomenal! This makes this market that we are in one of the best buying opportunities we have seen in decades!
