In doing client research of the Lone Tree/Highlands Ranch area (DHL), I am seeing some interesting trends in comparison to last year. Based on the MLS stats compiled by Land Title, it is interesting to see just how much the sales in this area have dropped compared to last year. In May and June, sales are off more than 25% when compared to the same month last year. At the same time, active listings are up 10%.
When compared to last year, the most significant change can be seen in the Absorption Rate (Active Listings/monthly closed sales). In June of '08 the Absorption rate was just 2.9 months. That value has jumped to 4.2 months - an increase of nearly 45%. With increasing supply and decreasing demand it seems that prices should be falling, when in actuality, the average price has increased 2% from $360,673 to $368,011. It seems like something will have to give...
As a point of comparison to illustrate the difference between lower and higher priced neighborhoods, the Absorption Rate in North East Denver (DNE) has decreased from 4.4 months to 2.9 months when compared to last June. The average sold price has stabilized, raising 1.1% from $203,423 to $205,731.
This difference really illustrates the fact that the ‘Denver Real Estate Market' is anything but uniform. I believe that an understanding of the overall market dynamics should be a consideration when writing offers.
I look forward to your comments!