A Daily Shot of News

Potential buyers of Denver homes should pay careful attention to an updated report showing improvement in the residential housing market in the Mile High City. In the month of November alone, the number of homes for sale in Denver dropped 11% form 2008, and the total number of homes placed on the market in Denver during 2009 is just over 28,000 homes, a drop of 15% from 2008.

Even more encouraging, the median sold price topped $193,000 in November, a 28% improvement over the same month in 2008.  Homes for sale in Denver are, in fact, selling for over 98% of their asking price, with the average sale closing at $245,000 in November.

While the Denver home market has not fully recovered from the recent downturn in real estate, homes are selling faster in 2009 than in ’08 by an average of 5 days, available inventory is down 40% form it speak in 2005, and all the local economic signs are pointing to a steady recovery in Denver.

The area’s rapid transit system, Fastracks will place 3 billion in rail construction projects on line in the next 12 months.  Area home builders are cautiously continuing to build for the new home market segment, and the area unemployment is a full 2% or more less than the current national average.

With the incredible lifestyle opportunities available in the Denver area, there is no better time to buy a Denver home than today, especially with the present tax credit available.

Although some smaller cities within Colorado have been fortunate enough to avoid the real estate downfall caused by the current economic recession, Denver has not been as lucky and due to its high unemployment rates and stalled debt market, commercial real estate in the Denver area continues to suffer.  Looking on the bright side, however, Denver has not experienced as drastic a recession as other places such as Phoenix, California, and Florida.

According to DQNews.com, although Denver area home sales have risen greatly between May and June, the Denver area real estate still continues to suffer, with sales still remaining lower than that of 2008.  The same goes for median home prices, which although they have increased on a month-to-month basis for the past five months, the median price for homes in the Denver are is still 4.5% lower than it was at the same time last year.  About 4,562 new and foreclosed homes and condos were sold in June of this year in the Denver-Aurora metro area, which was up 31.5% from May, but down 10.5% from the year before.  The median price for homes sold in the Denver area have also followed a similar model.  DQNews.com reported that 47.5% of the homes sold in the month of June were financed using government-insured FHA loans.

The Denver Business Journal has reported another view of the Denver real estate that has been somewhat more successful.  Although commercial real estate in the Denver area continues to suffer, the real estate market for offices and industrial sites has shown much more success over the past month.  Due to the number of companies folding or downsizing, more office space has become available, causing rents to go down slightly, but attracting more businesses.  Industrial sites and buildings have also been more successful than the commercial real estate, even though sales rates are still slightly less than the previous year.

Colorado real estate continues to suffer as a result of the current economic recession.  However, in some smaller cities that have not suffered from high unemployment rates, the real estate market has not suffered as much and seems to be making a small but steady rebound.

According to the Denver Business Journal, Denver has not been as lucky in surviving the economic recession and maintaining a somewhat unscathed real estate market.  Due to still rising unemployment rates and a stalled debt market, the commercial real estate market continues to suffer.  Although Denver’s real estate market has not dropped as drastically and experienced as large a number of foreclosure rates in cities such as Phoenix, California, and Florida, the real estate activity in the Denver area has been brought to a halt.  Aside from the trouble in Denver’s commercial real estate, the city has experienced some success in the office and industrial real estate markets, with a number of office buildings and industrial sites being sold over the past months.

According to DQNews.com, Denver home sales has risen slightly over the past few months but still remain at the lowest levels recorded throughout the past decade.  For the fifth month in a row the median sale price has increased, but it still remains about 4.5% lower than it was a year ago.  In June the median price paid for new and resale houses and condos was $210,000, which was an increase in 6.1% from May, yet still lower than the previous year.  DQNews.com reported 4,562 homes and condos being sold in the Denver-Aurora metro area in the month of June.

In contrast to the struggling city of Denver, smaller cities such as Vail Valley have experienced a recent surge of real estate growth, according to the Vail Board of Realtors.  Apparently the number of residential properties that went under contract during a period between August 10 and September 10 was 77, an increase from the 22 that took place between January 1 and July 10.

National reports like Case-Shiller have been reporting for months that Denver real estate has been better than most major US markets.  In reality, the Denver market is the most segmented it is ever been even though average home prices went up 2.3% quarter over quarter according to Zillow.com.

“All real estate is local.”  That’s been an axiom of real estate professionals for many years.  It’s certainly true today in the Denver real estate market where homes are selling quickly in some suburbs and not in others.  Homes are selling quickly in some ZIP code’s and not in others.  In many neighborhoods it’s a buyers market.  But in some neighborhoods it’s clearly become a sellers market. In other neighborhoods, prices have actually been appreciating according to the Denver Post.

For example, the trendy and affordable Baker neighborhood is near downtown and very popular with first-time homebuyers and urban pioneers with no fear of the graffiti on garage walls.  There are only 14 homes for sale there right now and nine homes sold in August.  That makes Baker truly a sellers market.  Good homes that are properly priced will sell in less than a week.

Other neighborhoods in Denver that are selling quickly include Wellshire in southeast Denver and the Highlands area in northwest Denver.  These neighborhoods attract young, first-time homebuyers who are seeking the $8,000 tax credit scheduled to expire at the end of November.  Obviously, the question is will these neighborhoods continue to sell so well if the tax credits are allowed to expire.

In contrast, more expensive neighborhoods and suburbs like Hilltop in Denver and Greenwood Village have become Buyer’s  markets. The fashionable and pricy Cherry Creek neighborhood is selling very slowly.  This area is popular with empty-nesters and single adults who enjoy walking to art galleries, coffee shops, boutiques, restaurants and the world-famous Cherry Creek shopping Center.  There are currently 174 condominiums and town homes for sale in the Cherry Creek area.  In August only eight of them sold.  That is a buyers market.

Denver real estate is segmented by more than just geography.  It’s also segmented by price a perfect example is Highlands Ranch.  That is the most popular suburb for Denver relocation buyers.  Lower-priced homes there below $300,000 are selling reasonably quickly.  There are currently hundred and 85 homes on the market they are.  54 of them sold in August which is traditionally a slower selling month.

Homes in Highlands Ranch priced between $300,000 to $700,000 sold more slowly 377 homes are on the market now and only 62 sold in August.  But homes above $700,000 certainly present a buyers market.  There are currently 45 homes for sale over $700,000 in Highlands Ranch.  Only one sold in the month of August.

So there is a wide variety of markets within the Denver metropolitan area.  They’re segmented based on geography and price.  Any buyer moving here needs a good Realtor to sort out the differences in these market segments.

All Denver Real Estate By Larry Hotz