The Pulse is a review of key economic statistics that affect the real estate market.  The Pulse is offered monthly as part of The Berkshire Group’s Monthly Update, and is current based on the information  offered by the credited sources. The database is the 7 county Metropolitan Denver SMSA:

New Home Starts through June

Area Building Permits issued through June, 2010:  1920, a 64% increase vs. 1170 through June, 2009.

• Source: The National Association of Homebuilders

Average Single Family Home Sales Statistics through July, 2010:

Prices                     % of Change                     Days on Market               Year

$276,654                                                           100.37                              2009

$297,218                  +7.43%                             85.73                              2010

• Source: Metrolist, Inc.

Employment Statistics for the Denver-Aurora MSA through June:

Year                            Labor Force               Employed        Unemployed       Rate

2009                             1,410,664                1,287,332            123,332              8.2%

2010                             1,368,253                1,253,801             114,452              8.4%

• Source: Colorado Department of Labor

Mortgage Rates as of August 18, 2010

30 Year      15 Year            5/1 Arm              1 yr ARM

4.44%          3.92%                3.56%                     3.53%

All rates include a 0.7 % discount point. Rates quoted by any lender may not reflect momentary changes.

• Source: Freddie Mac National Website

 The high end condo market remains very slow due to the lack of available and convenient loan funding.

 85% of the active Denver real estate market is priced between $125,000 and $300,000.  The primary financing vehicle is the FHA.

 70% of the Condos sold in the Denver Market in 2010 have been priced under $200,000.

Condo sales remain strongest in the low to mid price range.

While the very lowest segment of the market has become virtually non-existent in 2010, the balance of the market up to $500,00 is not dissimilar to previous years.  The $500,00 and above market still struggles, but there is life there as well.

The high end condo market struggles with little of no financing available for that price of property.  2/3 ‘s of the market is selling under $200,000.

The average days on market for Condos was at the lowest point in the past 4 years.

While the inventory of available homes for sale is still quite low, June marked the first month in the recent past where the total sales went down at the same time inventory went up.

 The residential sold price jumped in June, reflecting the highest average price since August of 2007.

 The relationship between total sales and inventory became a bit unbalanced in June, with the increase in inventory reflecting a bit of pent up desire to sell by homeowners.  The so-called “shadow market” is not yet apparent in the Denver market.

Condo price per square foot has improved over 2009, but not yet at 2008 levels.

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.

The Pulse is a review of key economic statistics that affect the real estate market.  The Pulse is offered monthly as part of The Berkshire Group’s Monthly Update, and is current based on the information  offered by the credited sources. The database is the 7 county Metropolitan Denver SMSA:

New Home Starts through May

Area Building Permits issued through May, 2010:  1580 vs. 910 through May, 2009.

• Source: The National Association of Homebuilders

Average Single Family Home Sales Statistics through June:

Prices                     % of Change                     Days on Market               Year

$283,312                                                           100.18                              2009

$299,375                  +5.67%                             82.21                              2010

• Source: Metrolist, Inc.

Employment Statistics for the Denver-Aurora MSA through May:

Year                                                Labor Force      Employed       Unemployed      Rate

2009                                                 1,401,174                1,285,751             115,423         8.2%

2010                                                  1,359,206                1,254,206            104,960        7.7%

• Source: Colorado Department of Labor

Mortgage Rates:

30 Year      15 Year            5/1 Arm              1 yr ARM

4.57%          4.06%              3.85%                     3.74%

All rates include a 0.7 % discount point.

• Source: Freddie Mac National Website

This graph shows the number of homes sold and closed. June closings fell in comparison to the tax credit induced high closing rate of April and June.  Overall Year-to-Date is slightly better than 2009.

 The average sold price took a major turn for the better in June. This may be the result in seasonal purchases made by company transfers of employees that traditionally buy in higher than median price ranges.

The inventory absorption rate increased in June, agains as the result of a drop in total sales after the expiration of the tax credit.

The median sales price most likely peaked in June, not dissimilar to previous years.  The steady improvement in the median price from January of 2009 is very encouraging for the Denver Market.