Good news for buyers!  It's not too late to buy near the bottom of Denver's real estate prices.  Although May median prices for single family homes showed a slight increase (1.8%) over April of this year, the decline (9.8%) over May 2007 was significant.

For condos the median increase in price from April to May 2008 was 10.03%, but dropped 4.5% from May 2007.

The steady increase in median price since the first of the year is largely seasonal.  2007's high point came in June when the median single family home was $263,000 and for condos was $157,950.

The number of homes sold declined by 8.2% from May of 2007.  The credit crunch earlier this year took a toll on sales.  But with credit requirements loosening the number of home buyers may increase in June.  In May FHA increased loan limits to $406,250 ($460,000 in higher priced Boulder), though "jumbo" loan limits are still $417,000, making it more difficult to buy an expensive home.

Inventory is down from this time last year.  In May 2007 the number of single family homes on the market was 21,505, while 20,287 homes were on the market in May 2008, a drop of 5.7%.  7,605 condos were on the market in May 2007 compared to 6,046 this year in May, a drop of 20.1%.  The average days a home or condo is on the market also dropped 11.9% from last year for condos to 104, but remained virtually the same for single family homes at 99. 

Better credit conditions and higher loan limits plus plenty of homes on the market make it a very good time to buy. 

A question asked by many of my buyers is "If I buy now, what about declining values? Will my home be worth less when it comes time to sell it?" The answer varies depending on how long you stay in your new home. 

On average buyers stay in their homes about 5 years before selling according to independent real estate broker, Gary Bauer (Bauer issues a monthly market report used by the Denver dailies) is widely regarded in Denver real estate circles as a market expert. In a report in the Rocky Mountain News by Rob Reuteman (4/19/08), Bauer is quoted on the issue. He says, "If I bought my home a year ago for $200,000, and I had to sell for $180,000, I'd be upset. If I'm staying in the Denver market I take $180,000 and buy a house that would have cost me $200,000 a year ago. But I'd still have a little feeling that I really didn't do so well. If I were that individual five years ago, my average appreciation would be 39 percent. Would I be concerned about a 10 percent drop in price today? I don't think so. I would have bought it for $130,000 and sold it for $180,000."

The Denver Post has a very useful interactive map of home values across the metro area. You'll be able to look at values by neighborhood, discover whether values are rising or declining and much more.

Interest rates are still low (conventional loans were at 6.250% for well-qualified buyers as of June 4, 2008 from our preferred lender, Rate One, The Mortgage People). Homes are more affordable. Denver's economy is steady and jobs are expected to increase this year. The metro Denver and Colorado state unemployment rate in April were 4.4%.  2,000 new jobs are expected in Colorado in 2008, and foreclosures are expected to drop by about 9% according to Patty Silverstein, Chief Economist for the Metro Denver Development Corporation. 

The Denver market is not in the same situation as many cities. We're still riding out the effects of the mortgage crisis which led to so many foreclosures, but values haven't dropped nearly as much as the rest of the country. Values dropped about 2% in 2007 and are expected to drop another 3% overall in 2008. Contrast that with Orange County, California (suburban Los Angeles) which dropped 10.2% or Boston a 13.3% drop.

Many parts of the country have suffered a double whammy with the real estate bubble bursting together with the number of foreclosures rising which put a downward push on prices. Denver's bubble burst in 2001, but values remained steady until 2007 when they began to drop. 2006 values increased an average of 2.7%, while values at the end of 2007 had dropped by 2%, a difference of 4.7%. 

Denver's cost of living makes it an easy choice over higher cost areas like both coasts. According to CNNMoney.com it costs 57% less to live in Denver than in San Jose; 53% less than in San Diego; 61% less than in San Francisco; and 20% less than Seattle. If you live in the east, it will cost 51% less than in Washington, D.C.; 36% less than in Boston; 72% less than in New York; 26% less than in Philadelphia. 

For buyers coming from the south and the midwest, Denver could cost more. It costs 14% more in Denver than in Atlanta; 49% more than in Houston; 41% more than in Dallas; 29% more than in Dayton, Ohio; 22% more than in Rochester, MN, and 23% more than in Boise. But living in Denver still costs 17% less than in Chicago, 16% percent less than in Portland, and a whopping 56% less than in Los Angeles..

You'll need to do your due diligence to compare cost of living between your city and Denver at websites like BestPlaces, BankRate, or CNN/Money.

 Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references at the Buyers Advantage website.  Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.