Denver (Including Westwood) 1Q 2008 real estate trends

By
Real Estate Agent with Your Castle Real Estate


Recap of First Quarter 2008 Home Price Performance

The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000. Comparing 2006 to 2007, the average home price across the metro dropped 2%, to $311,000. The first quarter of 2008 was $278,000 vs. the first quarter of 2007 was $296,000: a 6% decrease. Note that prices in the first quarter are usually a bit less than the rest of the year. This is because families that tend to purchase larger, more expensive homes tend to move in the summer months when their kids are out of school.

The average price of a foreclosure or short sale dropped -3% to $188,000 from 2006 to 2007. The average price of a non-distress sale increased 5% to $370,000. Sales volume over the last twelve months is off -4% for DSF/ASF. Foreclosure and short sale volume is up +31%; non-distress seller volume is off 20%. This trend continued in the 1Q 2008; foreclosure volume was up another 15% at the expense of the non-distress sellers.

Some areas did better than others. The attached chart shows different neighborhoods in Denver. Each region has the neighborhood's name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from April 2007 to March 2008 vs. the twelve months immediately preceding. Next, you'll see the average home price in the last twelve months and the number of homes that were sold.

The good news is that the foreclosures are likely to peak in the next six to nine months. Many of the foreclosures were due to resetting rates on ARMs (adjustable rate mortgages). There are two reasons. First, according to Bank of America data, the volume of ARM resets is set to peak in March 2008. It often takes six months or a bit longer for an ARM reset to conclude in the sale of a foreclosed home. Second, the index rates that many ARMs use have declined lately. As a result, some borrowers that might have had a huge shock if their rate reset a year ago might get less of an increase today. For these reasons, we're likely to hit the bottom of this cycle this year.

There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.

Source: Your Castle Real Estate analysis, MLS data




(C) Copyright 2008 Your Castle Real Estate

 

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Rainer
11,785
Brandon Gill
Your Castle Real Estate - Aurora, CO

As professionals we definitely need more information like this.  We need to be educated and keep our clients on top of what is going on in each local market.  Thanks for the great info, keep it up.

Oct 18, 2008 02:13 PM #1
Rainer
10,809
Joe Heffley
Your Castle Real Estate - Highlands Ranch, CO

It is amazing to see how much some of these markets have dropped and look like they are continuing to drop.  I hope the bottom is near for some of these communities.  On the flip side, what a great market to buy an investment in, right?

Oct 19, 2008 04:08 PM #2
Rainer
7,819
Laurie James
Your Castle Real Estate - Englewood, CO

Thanks for the overview.  Knowledge is power and we need to make sure our clients and peers are informed.  I can't wait to see the next versin of this blog.  Our clients will continue to benefit from the great info you are posting.

Oct 19, 2008 05:09 PM #3
Rainer
8,341
Rex Jarnagin
Your Castle Real Estate - Lafayette, CO

Everyone benefits from information like this.  Investors, Realtors, Homeowners all need to have info like this, especially in rough times like the ones we are going through now. 

Oct 19, 2008 05:14 PM #4
Rainer
2,138
Dano Keys
Your Castle Real Estate - Denver, CO

Everyone benefits from information like this.  Investors, Realtors, Homeowners all need to have info like this, especially in rough times like the ones we are going through now. 

Oct 19, 2008 05:17 PM #5
Rainer
10,153
Jim Goffred
Your Castle Real Estate - Parker, CO

Have you heard that the days on market have been decreasing the last two months?  I think that maybe we are past the bottom and climbing on up. It will still take some time but I'm seeing the first signs of things turning around.a

Oct 22, 2008 04:42 PM #6
Rainer
9,346
Todd Houghton
Your Castle Real Estate - Aurora, CO

It is amazing to see how much some of these markets have dropped and look like they are continuing to drop.  I hope the bottom is near for some of these communities.  On the flip side, what a great market to buy an investment in.

Oct 24, 2008 04:49 PM #7
Rainer
11,785
Brandon Gill
Your Castle Real Estate - Aurora, CO

Can't wait to see what is happening in the 3Q of this year.  It seems that much of the map will stay the same.  It would be interesting to hear if any of these areas have it rock bottom.

Oct 25, 2008 02:40 PM #8
Rainer
1,376
Josh Hunter
Your Castle Real Estate - Denver, CO

Your information reflects a true depiction of what is going on in the Denver market. I like the way you have put this information. It is insightful but matter of fact.  Do you send this information to your clients or just use it in your brokerage?

Oct 26, 2008 03:21 PM #9
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