Signs of recovery evident in Denver’s most affordable price ranges
Late spring data are showing further evidence of an early recovery for the real estate market in the Denver area—particularly for the under-$250,000 price range—according to a newly released report issued by Prestige Real Estate Group.
Prestige agent Bonnie Wing prepares a new listing in Denver’s popular Highlands neighborhood near downtown. Key to a quick sale, Wing says, is a listing that is staged properly and given any necessary repairs.
“The continuing decrease in supply we’re seeing at the low end is exactly what you would expect from the earliest stage of a general recovery,” said Jack O’Connor, Managing Broker of Prestige Real Estate Group and author of the new report.
According to the data, the 7-county metropolitan area has 7,849 single-family homes and 4,119 condos currently active at prices $250,000 and below. Using those values in conjunction with year-to-date sales figures for homes in that price range, the report projects that the market inventory for both home types has now dropped beneath a five-month supply: 4.7 months for single family and 4.8 months for condos.
“We are getting closer to a robust sellers’ market in this price point, and our agents are reporting that in some neighborhoods we serve, we’re already arriving there,” O’Connor added.
The projections are particularly poignant with respect to the affect of foreclosures, says Prestige President Leeann Iacino. Area foreclosures, which are overwhelmingly centered in the lowest price ranges, are not significantly stalling the market’s progress in recovery.
The falling inventory in the low range has stabilized pricing there, O’Connor said. When supply dips to three months, he predicted, buyers can anticipate a resulting increase in price of 4% to 6% for that range over the following 12 months, with price increases in the $250,000-to-$500,000 range and higher ranges following sequentially.
O’Connor noted the newest Metrolist data show that over the past 12 months the Denver area experienced a 9.45% drop in inventory to 27,295 total units (inventory in June 2007 was 30,145 units). Meanwhile, homes now under contract total 8,382, a 13% increase over June 2007—the highest number of homes under contract in June in five years.
The favorable trend in contracts runs counter to the latest numbers for homes closed, down from 2007; but agents see that as a consequence of backups in the processing of new sales, resulting from personnel reductions by the mortgage industry. “The contracts you see in place now will overwhelmingly be converted to closings over the next two months,” O’Connor noted. The mortgage market itself, he added, has showed signs of loosening the restrictions on financing particularly in the lower price ranges.
Iacino adds that the new market picture contains important messages for buyers and sellers. “What we’re seeing is a market that has less and less to do with the foreclosure dominated market we read about in other parts of the nation,” she said. Current estimates of the foreclosure rate in Colorado show the state having fallen to the nation’s 9th highest; however, discrepancies in comparing actual foreclosures between different states suggest that Colorado may have dropped far below that.
“If you’re selling or buying a house priced $250,000 or lower, you’re probably looking at an exceptional opportunity this summer,” Iacino added. “If you’re anticipating moving from a lower to a higher price range, you’ll be gaining even more potential to benefit as the recovery takes shape.”
Some 300 Prestige Real Estate Group agents serve the Denver area from offices in the I-25/Tech Center corridor, Highlands Ranch, Cherry Creek, Castle Pines North, and Conifer/Evergreen. For a copy of the newly released data, contact Leeann Iacino at (303) 874-1316.
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Tags: Denver, economy, housing market, real estate market, recovery
