Denver Real Estate Stats - August ‘08
September 10th, 2008 Categories: Market Trends, Real Estate News
It’s that time again! Time for Denver Real Estate Statistics, and I’ve got a great deal of information this month. The chart is provided by MetroList, metro Denver’s MLS provider.
For the past several months we’ve continued to see inventory declining - number of homes on the market going down. What that tells us is that we’re on the road to a more balanced market. As fewer and fewer homes come on the market, you’ll notice that homes are beginning to sell faster. That’s due to the fact that buyers are now competing for homes where they once could just move on to another if an offer didn’t pan out.
In the chart, you can see that the inventory level has decreased nearly 4% since last month and over 20% since this time a year ago.
Prices have also continued to decline from last year, but are up from last month. The drop from a year ago is the result of several factors: continued foreclosures, difficulty in securing loans and sellers’ more realistic pricing. As prices drop and inventory reduces, we’ll begin to see a shift from a buyer’s market to a balanced market. As always, the pendulum tends to swing broadly, so we’ll eventually swing to another seller’s market. That may not be for quite awhile - it’s especially dependent on what happens in the larger economy.
Speaking of the larger economy
Nearly everyone has heard that the U.S. government has placed Fannie Mae and Freddie Mac, the mortgage finance companies, into a conservatorship. The hope is that this move will stabilize the mortgage markets, the fear is that this isn’t the end of the financial crisis and that the U.S. taxpayers have just assumed an enormous amount of debt.
Whatever your political leanings, the fact is that mortgage rates have declined since Monday. Today’s quote was 5.5% to 5.625% for a 30 year conforming loan. The lowest we’ve seen in awhile. With the convergence of lower rates and price depreciation, today’s buyers may very well look back on this time and feel thankful that they purchased when they did.
Denver’s place in this
- The S & P upgraded Denver to AAA for municipal borrowing. Denver is cited as the economic engine for the Colorado front range.
- Wells Fargo announced today that Denver has had the “distressed market” label lifted for borrowing purposes as of next Monday. This removes the additional 5% down payment requirement. Additional lenders will surely follow. With conforming rates improving and the at-risk designation removed, added steam will surely be felt in real estate sales.
- The absorption rate for single family homes in Denver is now 5.5 months. Absorption rates calculate how many months, on average, it takes to sell a house. When this number gets to 3-4 months, market dynamics will feel very different.
As I said, lots of interesting information this month. Stay tuned for the September report!
To view Denver homes for sale, see Gretchen Faber’s web site at www.gretchensdenver.com
[…] since I’ve written about a great local restaurant. Lately, I’ve been concentrating on real estate information. The recent stressful developments all over the news makes me think that getting a fine cup of […]
[…] has released the sales data for September, and the trend continues to show that days on market are shortening. As we see inventory moving in the medium price ranges, […]
Things have changed so much since this was written. Just looking back a year seems like 5 years.