Statistics

Price Change Analysis for Denver Homes

February 27, 2010 by Janet Marlow · Leave a Comment 

Note comments  below Condo Graph

Price change analysis is a tool used by the relocation services industry to assist in determining the best time to transfer employees in relation to the best time to buy and sell those employees homes.  Different markets have different peak sales times, and as real estate becomes increasingly global, the cost of buying an executives home becomes a factor in relocation process.

While it would seem to be obvious just when the peak home selling or buying seasons may be for any given market, graphing the data is very useful in our understanding of the obvious. In the case of both of the graphs above, one for detached homes and the lower graph representing condo prices, the peak period in 2009 remained high during the latter half of the year due to the tax credit artificial manipulation of the housing market.

Graphs Showing Sales Price Distribution for Denver Home Sales

February 24, 2010 by Janet Marlow · Leave a Comment 

The January market shows an increase in sales volume in the middle price ranges, with the very low price range indicating a decline.  This is due to a lessening of available inventory of the below $110,000 price range.  The over $500,000 price remains sluggish.

Almost 60% of the Denver area home sales were between $110,000 and $300,000 in the January 2010.

The Denver area Condo market continues to show strength in the price range below $200,000.

Only 7% of the Condo market in in price ranges above $300,000, with much of the market concentrated in Central Denver, or unique luxury properties located along the light rail lines.

Market Activity Graphs for Denver Area Housing

February 21, 2010 by Janet Marlow · Leave a Comment 

Available resales homes in the Denver area market peaked in June of 2009 at approximately    21, 000 units, well below the 2008 peak of approximately 27,000 units.  From the June peak, inventory declined steadily through December, before increasing slightly in January of 2010.  Sellers will attempt to take advantage of the tax credit market by offering their homes for sale early in 2010, but many home owners will remain out of the market in 2010.  A combination of values being less than loan balance and consumer caution will work in favor of long term market stability by keeping the available market below buyer needs.

The Denver area home resale market is still very much in a recovery mode from the drastic average price reduction in January 0f 2009.  Average prices will rise earlier than normal in 2010 as a result of the Federal Home Buyer Tax Credit.

Average days on market is a reflection of inventory vs. buyers.  From the recent peak in February of 2007, days on market have declined somewhat consistently with the well known changes in the market.

While the Condo market reacts somewhat differently than the detached housing market, the same overall decline in days on market is seen in this sub-market.

This combination bar and line graph shows the relationship between inventory and home average home prices, with the average price plainly rising as the inventory declines.

Denver Metropolitan Real Estate Market Graphs

February 17, 2010 by Janet Marlow · Leave a Comment 

While the calculation for the “absorption rate ” (AR) is a bit complicated, the concept is simple: at the present rate of sales, how many weeks (or months) will it take to sell the current inventory if no additional properties are added to the inventory.  The calculation is based on data readily available from Metrolist, Inc, the Metropolitan Denver’s MLS service.  The base data does not include new construction, private sales (FSBO’s), or bulk foreclosed property sales, but is relativity accurate based on the data presented.  Looking at January of 2010, the AR increased considerably from December  2009, but shows improvement over the the previous two January’s.  The best explanation for the jump up over December of 2009 is the effect of the 2009 Home Buyers Tax Credit, which artificially advanced the buying “window”  for many first time buyers, plus the normal seasonality of the market.  We can assume that the new tax credit will affect the AR going forward,  but artificial manipulation of the market makes for shaky predictions.

The  Denver area median price is much improved over January of 2009, but not quite is strong as January 2008. The median price is the exact middle of all of the single family homes (residential) sold during the month of January.  It will continue to be difficult to raise the median price until better financing is available for the upper end of the market, and the unemployment picture improves.

This graph plainly shows that the available resale inventory is considerably below previous years.  The graph shows the combined inventory of detached (single family) homes and attached (condos).  While this may seem like there are many choices for the average home buyer, consider that this graph represents the entire market.  For any given home buyer, the inventory shrinks based on needs, for instance: a detached home buyer will eliminate all of the condos (4,400).  Price range will narrow the search further, as will locational issues, both wide area such as south verses north and more specific, such as cul-de-sac verses open street, or specific schools or drive times to work locations.  It is also true that at any time the available inventory has a certain number of properties that are undesirable to our given buyer, such as short sales, overpriced listings, and homes in poor condition. For that given buyer, the inventory is sparse, which will begin to push prices higher.

Total homes sold is somewhat reflective of the season, the tax credit market manipulation, and the low inventory.  Inventory that is unusually low makes finding the “perfect” home more difficult.  We can expect to see sales increase as the latest tax credit takes hold and the market moves into the spring buying season.

The  decline in the December average price is normal, and is much better than the abyss that was January of 2009.  Again, with artificial market manipulation, the 2010 graphs may be a bit unusual.

Denver Housing Market Update for January, 2010

February 15, 2010 by Janet Marlow · Leave a Comment 

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