Prices are down. The February market statistics are plain.
Last year, when prices were down it was because lower end homes were selling. The “mix” of homes was skewing to starter homes, reflecting a “reduction” in prices.
The past few months, we’ve actually seen a firming up of the high end in Denver (although there is still about 5 years’ of inventory in Cherry Hills Village.) With luxury homes rebounding, the reduction in prices can only mean one thing. Prices have come down. Not dramatically, but the 4% reduction since January and 2% since February 2010 is enough to cause Sellers to pause before pricing their home.
What’s selling in this Spring market is homes that are extremely competitively priced. The new listings are getting a ton of showings because of low inventories in some neighborhoods, but the stale listings are languishing.
Average Days on Market is rising. That’s a little unusual with the low levels of inventory compared with past years. Inventory is over 8% lower than this time last year! When it takes longer to sell, prices are negatively impacted.
We need to clean out our old inventory. Sellers should get their homes in perfect showing condition and priced to sell. It’s the only way. Crossing your fingers and waiting it out for appreciation to catch up is not a realistic game plan.
Buyers – when making an offer ask your broker to analyze the past 6 months sales in your neighborhood for similar homes. Make your offer based on the reality of the market and not based on your need to get a better deal than your friend did. Depending on where the home is priced when you make the offer, you may need to low ball and you may need to offer closer to list price.
This is the time to pay attention to the market signs. No more crossed fingers and wishful thinking. This is reality. A new reality. There is a market. Where are you going to fall in that market?
Check out all of Denver’s available properties at Gretchen Rosenberg’s real estate web site – www.GretchenRosenberg.com.