Well, not too unlike someone recovering from the flu, the Metro Denver Market is looking better everyday. However, just like someone recovering from the flu, ya' wished you felt better. Nevertheless, you're glad you're on the mend, as opposed to being on the downhill slide. Denver is on the mend and continues to gain strength.
Denver slid back every so slightly from 6.5 months of inventory to 6.7 months of inventory between March and April. However, that's NOT the bad news it seems at first glance.
First, let me review what happened, then I will review why it's not as bad as one would initially think.
This month saw continued strength in the two lowest price points:
$1k to $100k (yes, you can buy a home for less than even $50k in Denver today) - dropped from 5.5 months of inventory to 4.7 months of inventory. That is a 0.8 months of inventory drop!!
$100k to $200k - dropped from 5.2 months of inventory to 5.0 months of inventory.
At other price levels, months of inventory moved materially only on the high end. However, the current month under contract was 6,256 compared to the trailing 12-month average of 3,146 homes sold. That means, NEARLY A 100% INCREASE IN UNDER CONTRACT ACTIVITY!!! That increase is well-balanced at all price points, though some weakness at the $800k-$900k was noted. So, new inventory is being absorbed as quickly as it is being generated.
That's phenomenal!!!
Why? Well, because a great number of studies I have read indicate the typical buyer moves up by 50% in value between purchases! So, if you sell at $200k, chances are you will buy up to $300k. Think about your own history: Does that statistic track? I look back on my own history and it sure seems to be the case.
Now, the "why" that is positive. Well, the greater action in the lower markets is a signal that people are getting the ability to get loans and move up to the higher price bands. And even though the months of inventory grew slightly, that was a result of the normal increase in listings during the summertime. Current month under contract activity continues to grow at all levels of the market. As a result, this is an indication that normal market behaviors are occurring in the marketplace. In short, there doesn't appear to be a logjam in buying, which would indicate credit issues or unemployment issues at certain income levels constraining activity.
Overall, the market is firming up and is exhibiting predictable behaviors associated with a growing market.
Market Trend Analysis - Denver Metro Selected Towns/Cities
Based on information from Metrolist, Inc. for period April 4, 2008, until May 2, 2008.
Single Family Residences - All Price Levels
Excludes Housing Not Listed in MetroList
Note: Six (5.5 to 6.5) Months of Inventory Tends to Indicate Neutral Market, Over 6.5 Months a Buyer's Market, Under 5.5 Months a Seller's Market
Price Range
Active
% of Market
Sold in Past 12 Months
Sold Per Month
Months of Inventory
Current Activity Status
Curr Month Under Contract
Near Term Sales Trend
$ -
$ 100,000
1,088
5.18%
2,756
230
4.7
Seller's Market
834
Seller's Trend
$ 100,001
$ 200,000
4,531
21.57%
10,903
909
5.0
Seller's Market
2,093
Seller's Trend
$ 200,001
$ 300,000
4,884
23.25%
11,467
956
5.1
Seller's Market
1,565
Seller's Trend
$ 300,001
$ 400,000
3,158
15.03%
5,883
490
6.4
Neutral Market
770
Seller's Trend
$ 400,001
$ 500,000
1,998
9.51%
2,710
226
8.8
Buyer's Market
364
Seller's Trend
$ 500,001
$ 600,000
1,267
6.03%
1,461
122
10.4
Buyer's Market
227
Seller's Trend
$ 600,001
$ 700,000
884
4.21%
796
66
13.3
Buyer's Market
116
Seller's Trend
$ 700,001
$ 800,000
681
3.24%
488
41
16.7
Buyer's Market
84
Seller's Trend
$ 800,001
$ 900,000
481
2.29%
373
31
15.5
Buyer's Market
42
Seller's Trend
$ 900,001
$ 1,000,000
363
1.73%
199
17
21.9
Buyer's Market
37
Seller's Trend
$ 1,000,001
No Upper Boundary
1,670
7.95%
720
60
27.8
Buyer's Market
124
Seller's Trend
Total
21,005
100.00%
37,756
3,146
6.7
Buyer's Market
6,256
Seller's Trend
Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
Michael Clarkson is one of Denver's highest profile brokers. He’s been featured in Realtor® Magazine three separate times, Denver Post, Denver Business Journal, KOA Radio, KHOW Radio, and the Colorado Radio Network. Michael is a licensed Managing Broker in Colorado and a GRI (Graduate Realtor® Institute). He is also a partner in the firm, Cash Path Real Estate LLC. Michael has an MBA in International Business from Regis University in Denver.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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