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More Good News for the Denver Real Estate Market

Real Estate Agent with Keller Williams Realty Professionals

November 5, 2008 11:09 AM

Posted by John Rebchook

Rocky Mountain News

Strong November for housing market, O'Connor says

For the first time in more than three years, the number of unsold, resale homes available in the Denver area has dropped below 24,000 units, according to a report by the Prestige Real Estate Group.

The unsold inventory has dropped to 23,697 units, according to an analysis of Metrolist data by Jack O'Connor, managing broker of Prestige.

"This is the first time since early 2005 that we've seen inventory levels for the seven-county area under 24,000 units," said k O'Connor. "We're absorbing inventory here faster than most national markets, particularly in the lower price points."

The last time the inventory was lower for single-family homes and condominiums was in March 2005, when it stood at 23,647 unsold units.

In the price range $250,000 and lower, inventory as the beginning of November stood at 6,553 units. For comparison, that is 27 percent down from where it stood five years earlier when it was at 9,011.

The condo inventory at that price range is dropping even more precipitously, under 3,500 units (the November 2005 market high at that price range was 6,437).

The report predicts that homeowners in those lower price ranges could see appreciation in the neighborhood of 6 percent during 2009.

Other trends evident in the report:

Month-to-month inventory at the beginning of November is down almost across the board for both single-family and condo. Only in a few price niches over $1.5 million are inventory levels up over last month's.

In October, there were 3,341 single-family and condo units closed, was down only 57 sales from October 2007. "Put that together with September's strong sales and you can see that the entire market here is flattening out," O'Connor said. "In the context of the very negative Wall Street news that blitzed the country this fall, sales strongly suggest a real estate market that's moving in a positive direction."

There were 5,794 units under contract, up 4.1% over November 2007.

However, the high-end inventory for the month, year-over-year, continued a slow climb, up from 1,116 units in November 2007 to 1,187 today; but has dropped slightly in the higher $1 million to 1.5 million range (793 units November 2008 from 837, November 2007). Inventory from $1.5 million to $2 million (374) is up slightly over November 2007 (346).

O"Connor said owners of homes priced under $500,000 can expect brisk sales in 2009.

Most owners in ranges above $1 million need to see inventory levels fall before experiencing some appreciation. (Of course, there will continue be some upper end markets that outperform the overall market in appreciation.)

Homes priced over $750,000 in the Denver area are a value right now, one that could disappear rapidly, due to the faster rate at which the high end market fluctuates.

"Buyers are looking at a real opportunity in the higher price ranges," said Leeann Iacino, President of Prestige. "You're seeing discount prices and good terms, for properties that will likely show better return for your dollar than lower priced homes will."

Iacino added that the report shows that confidence in Denver real estate is very good compared to most national markets, and that the trend can be expected to continue into 2009.

Posted by John Rebchook