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Happy New Year! It's the time of year for fresh starts, revitalized energy and optimism'and that applies to the metro Denver real estate market as well. There's a feeling of excitement and forward momentum in the air that built throughout 2004 and has continued to accelerate into 2005.

For starters, 2004 was another record-setting year in home sales citywide. The combination of astoundingly low mortgage interest rates ' averaging 5.84 percent for a 30-year mortgage for the year ' and an economy on the mend brought out buyers, resulting in annual resales of just over 54,000 homes, a 12.6 percent increase from 2003.

Market performance was particularly outstanding for new and resale homes in the Central Denver neighborhoods, including Hilltop, Crestmoor, Mayfair, Montclair, Cherry Creek and Lowry, to name just a few. These highly desirable communities continued to show significant housing increases, especially for homes with exceptional locations and floorplans.

The million-dollar market really got rolling during the fourth quarter of 2004 and should continue its strong performance in 2005. New multi-million-dollar homes are selling as quickly as they can be built, as long as they have appropriate floorplans, upgrades and, of course'location. To that end, builders are actively seeking land in the Hilltop and Crestmoor areas, which will continue to raise the price of real estate in these neighborhoods in the coming year.

Happily, the future looks bright for 2005, both nationally and locally. According to the January 2005 issue of Kiplinger's, fears of 'bubble trouble' in the housing market were greatly exaggerated. Here in metro Denver, our much-anticipated economic recovery has arrived at long last. Economists are forecasting a 2 percent gain in jobs for 2005, which should bode well for the real estate market. New jobs can give people the confidence to buy larger, pricier homes and serve as an attractive lure to bring out-of-state residents into the area.

While it's true that mortgage interest rates are expected to climb in 2005, the National Association of Realtors has already lowered its projected rate for a 30-year fixed mortgage from 6.9 percent to 6.5 percent by year end ' still an extremely favorable figure by historical standards. Just imagine: Ten years ago, you would have paid almost 9.5 percent for a 30-year home loan!

In the Central Denver market, sales should remain robust throughout the new year, with an anticipated annual increase of 5 to 7 percent. Even with the large inventory we've seen for the past couple of years, well-located homes in excellent condition will continue to be in high demand in these coveted communities.

Home values in the metro area rose only slightly during 2004, averaging 4.3 percent for single-family homes ' considerably off from the U.S. average of 9.36 percent. Experts are predicting anywhere from 2 to 5 percent appreciation for 2005, a substantial drop from the halcyon days of double-digit appreciation in the late 1990s. Looking on the bright side, lower appreciation rates will at least counter rising interest rates and help more buyers remain in the market.

We wish you a year in which your dreams come true ' and, if those dreams include buying or selling a home, please remember to contact me - I'd love the opportunity to be of service to you!

Kelli Lanphere is a Broker/Co-owner of Re/Max of Cherry Creek, Inc. She has also been the contributing writer for the real estate section of The Cherry Creek Times (a monthly community publication serving our local neighborhoods: Cherry Creek, Denver Country Club, Hilltop-Crestmoor,Belcaro, Bonnie Brae,Washington Park, Congress Park, Park Hill, Mayfair & Lowry) for several years and is recognized as a proven expert in residential real estate.

* * * Kelli Lanphere - Selling Denver's Top Neighborhoods Since 1984 * * *

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