Talking Real Estate

How’s the Market?

If I had a dollar for every time I have heard that question in the past 32 years, I would be on a beach sipping Mai Tai’s as I while away my retirement.  OK, maybe not, but it certainly is the #1 question asked of REALTORS® in every conversation about real estate.  So, lets try to answer the question for the first half of 2010 in the Denver area market.

Definition

First,let’s define the term “market”.  If we say the “Denver real estate market”, we are talking about a statistical area encompassing 7 counties, 2.6 million people, encompasing a  plethora of “sub-markets”.  Each “sub-market has it’s own story, and we will get back to that concept shortly.  It is also important to understand the point of view of the inquirer.  If you are a seller, you want the market to be strong, with more buyers than homes available to sell, and prices offered exceeding prices asked.  If you are a buyer, you want prices to be low, or at least low enough to buy a desirable property with your available buying power.  The market is simply a snapshot in time of available product, average and median prices, and the number of buyers and sellers engaged in the market at that moment. Of course we can, and do, analyze the market in hundreds of different ways to satisfy various economic and investment models, but the simple definition works for most of us.

For the purposes of this article, the “market” is the snapshot taken at the end of June for homes sold in the first half of 2010 in the Denver Standard  Metropolitan Statistical Area (SMSA).

So, How’s the Market?

Simple answer.  Better than 2009. Also, artificially stimulated by offering a tax credit for many qualifed buyers.

Metro Denver MLS Data supplied by Metrolist for the single family market (both residential and condo) reveals the following:

 2010 Year-to-Date as of June 30 showed a total of 28,395 contracts written, and 20,990 contracts closed. For the same period in 2009, there were 29,030 contract written, with only 19,363 having closed. That is a “fallout” rate of 33.3%, where as in 2010 the “fallout” rate has improved to 27.7%. That means that buyers are more capable, and more stable in their decision process. Another important “market ” statistic is the average residential price, which was $284,000 in June of 2009 and $299,000 in June of 2010.  That is an average price increase if $15,000 in the first half of 2010. The median price, a better indicator of market strength than the average price, improved from $237,500 in June of 2009 to $244,500 in June of 2010. Mortgage rates are .68% better today than at the same time last year, the lowest rates since the 1950′s.  Jumbo mortgage rates are available today at 5.5%, better than the best Fannie Mae conforming mortgage rates of 2007, the very peak of the recent housing market.

Your Market

Earlier I mentioned “sub-markets”.  In a market area as large as Denver, there are many such “sub-markets”, which are defined by area, type of property, or price range.  Some sub-markets are still coping with large numbers of foreclosed property, which deflates prices and depresses the condition of the neighborhood.  Other sub-markets are stronger, with multiple offers seen during the mini-frenzy of the stimulated April market period. June sales in the million $$+ market showed improvement, and many well planned or close in neighborhoods are riding out the “housing” crises relatively well.

To really understand jsut how the market that affects your particular residence, you may wish to consider asking your Berkshire Group REALTOR® to present you with a current market analysis.  If you want or need to buy or sell a personal residence, or just want the peace of mind that comes from a full understanding of how the current market affects you, please call your Berkshire Group REALTOR® today, and obtain the best and most current information available today.