RE/MAX Alliance agent Mike Papantonakis answers questions regarding the current real estate market and what’s happening specifically in the Arvada, CO area. Mike has been in real estate with RE/MAX for over three years. He is a Jefferson County native and has lived in Arvada for 20 years. Mike currently serves as a VP on the Metro Denver Apartment Association Board of Directors.
What are today’s consumers most concerned with when it comes to buying and selling real estate? Buying at the right price! Over the past three years, buyers have heard that the value of homes have dropped, buyers are under the impression that if they offer full asking price or close to it, they are paying too much. Sellers are in a situation where now is a great time to move up to a nicer, more expensive home, however the value of their current home may not be what it was three or four years ago.
What are some positive signs in the Arvada real estate market? So far in 2010, we’ve seen the average sold price of homes grow from $245,000 in 2009 to $258,000 year-to-date. These numbers are based on statistics from Metrolist (MLS). Additionally, we’ve seen a drop in average days on the market from 87 days in 2009 to 76 days in 2010. These are both good signs that we have stabilized and expect that the near future holds similar results.
What are the current market trends in Arvada? The lower end, or homes up to $250,000 in Arvada have seen a decline in days on the market from 74 days in 2009 to 64 days in 2010. However, we’ve seen the trend move up in which properties are selling. In 2009, 80% of Arvada sales were at $250,000 and below. So far in 2010, that number has dropped to 65% of total sales. Conversely, in the homes priced from $351,000 to $700,000 we’ve seen an increase from 13% of total sales in 2009 to 16% in 2010. These are signs that more move up buyers are coming to Arvada to buy. New construction has slowed, most newer developments have some inventory left and are not currently adding new product.
Where are Arvada homebuyers coming from? The buyers we’re seeing in Arvada are largely local buyers either buying their first home or downsizing empty nesters. First time buyers are taking advantage of this market and the low interest rates. As baby boomers come of age, they tend to move away from the two story and tri-level homes to ranch style homes with small yards or patio homes with little maintenance.
Why is now a great time to buy a home? There is no question that now is absolutely a great time to buy a home. Today’s buyer actually will save more money than if they would have bought during the tax credit stimulus period. Today’s interest rates are at historic lows. A buyer who buys today may get a 4.25% interest rate. Around the first of the year, that rate was around 5.25% or higher, depending on the day. For a $250,000 loan, that means a difference of $150 per month in payment. Over ten years, that buyer would save $18,000 in interest, which is substantially more savings than the $8,000 tax credit. Prices of homes are now starting to rebound in most of the Metro Denver markets and there is plenty of affordable inventory for buyers to choose from.
What do you think is a realistic outcome for 2011? Signs and trends lead us to believe that we will continue to see slow and somewhat steady growth in home values. So much is dependant on how much government involvement there is. If the markets are allowed to regain their footing and do what they do naturally, we’ll see this growth, slow as it may be, and values will improve.
“We’re very fortunate to be living in Colorado and specifically, Arvada. This is such a desirable area in which to live that even when real estate markets are still struggling to stop their free-fall in Phoenix, Las Vegas, Miami and other areas, we took a relatively small hit and are already rebounding,” said Papantonakis. “It’s amazing to see how many people who grow up in Arvada and the surrounding communities stay here. We just never want to move out!”
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