Denver Colorado Real Estate | December 2008 Market Statistics
January 8th, 2009 Categories: Market Trends, Real Estate News
Prognostications from the kitchen table
That’s pretty much what we do, real estate bloggers - peer into our crystal balls, ignore the strictly bad news and go with our gut. But our gut involves real world experience. We’ve either got buyers in our cars or we don’t, we’re either listing 
properties or we’re not. If we are driving buyers around and we can find good inventory to show them, then we can say that for that market segment we see demand.
Seasonally Adjusted
Listen to the statistics you hear from “national” publications, and you may not be aware that there is a seasonal ebb and flow to real estate sales. Yesterday we learned that the market was down in fourth quarter 2008. Surprised? You shouldn’t be, the market is always slower during the fourth quarter. In actuality, the supply of unsold homes (or inventory) fell again for the 6th month. The declining inventory began in June 2008. May 2008 was the last month Denver saw more inventory added than sold. In May, we had 26,333 listed properties in the MLS, in December we had 19,600. That’s a whopping 6,733 fewer homes for buyers to look at. This number will likely begin to rise again in the next few months for the spring selling season, which is good news for buyers. When there is a dearth of homes to choose from, buyers will begin to see prices creep - even if it’s not a lot, this will be the indicator that we’ve hit the floor.
Denver’s Statistics
The Denver statistics are provided by Metrolist, our local MLS provider. It’s really fascinating to compare not just the month-to-month stats, but the year-over-year as well. The amount of inventory for both single family homes and condominiums is down 20% from this time last year. That’s a pretty drastic reduction in available homes for buyers to look at. If any pent-up demand emerges as interest rates go lower, we’ll continue to see homes selling more quickly. That’s illustrated by average days on market going down both from the month before, as well as from last year.
Why are prices down?
People ask me, “well, why are prices down?” Probably as many reasons as there are neighborhoods and price points. There are still foreclosures that need to be sold to new owners. Colorado’s foreclosure rate is drastically lower than it was a few years ago, and it seems to be slowing. We’re not even in the top 3 states - and in 2006 we had the dubious distinction of being the number one state for number of foreclosures. But we are still seeing the mix of properties that sell skewing to the lower end of prices. There have been a few more high end sales in recent weeks, but that end of the market will only really begin to recover when mortgage money for jumbo loans is more affordable and when more of the high-end inventory is sold off.
New York Times on Denver
The New York Times has repeatedly focused on Denver’s positioning as a good economic bet. In an article published in yesterday’s Times, the diversification of our economy and the relative stability of our residential real estate market are chief causes. Don’t forget quality of life. Today is January 8th and the temperature is 62 degrees - plus the snow in the mountains is perfect for skiers. My husband is out enjoying his motorcycle this afternoon.
Statistics are an interesting indicator of history. We look back and see what happened. Talk to your full-time professional real estate broker and you’ll get the answers from his or her crystal ball and real world experience .
The Denver Post interviewed me this week about picking Denver’s Next Hot Neighborhood. The crystal ball will come in handy for that one too.
I agree that the fourth quarter is always a slower time for the real estate market. I am interested to see how many sellers put their homes on the market in the spring if the statistics and the media start to say that its more a sellers market than it has been the last few years. I wouldn’t be surprised to see a lot of homes hit the market from sellers that have been “waiting for the market to turn around”.
Whats your take on all the sellers that have been waiting for a better market and how it will effect the market itself?
Nick’s last blog post..Square Feet Denver Aims to Ride Out the Recession - New York Times
Hi Nick,
You know, I think you’re right on that the inventory numbers should rise this spring. There have been a number of sellers waiting to list - both through the holidays and until the market improves.
The funny thing is, when people wait for “the bottom” they usually miss it. The bottom in a market isn’t as evident as the dip between moguls (if you’re a skier).
Thanks for the comment!
Gretchen
Good to hear your foreclosure rate is dropping. It has to be an indicator that things are getting better.
Aloha,
Keahi
Keahi Pelayo’s last blog post..Honolulu Nations Safest City!
[…] ranges. The lower and middle range homes are still what’s selling - as I’ve said in past months. But, in January we only had 23 homes sell priced over $1,000,000. The luxury and high end […]
[…] 3 months in these past 5 years where our inventory was less than today’s 20,225 and that was December 2008 with 19,600 available properties, Jan’09 with 19,748 and February ‘09 20,059. I would […]