We have your December 2008 market statistics for Denver.
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.
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.
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.