As the monthly Denver real estate statistics are compiled, much confusion exists. At The Berkshire Group, we analyse the numbers and try to relate them to how our buyers and sellers are affected. The following points not only explain the numbers, but what they mostly likely mean to us.
- The combined average price and the single family average price continue to exceed year-over-year levels. Because of this, the total value of property sold in the Denver Metro area exceeds last years to date, even though the total number of units sold is less.
What this means: slow but steady improvement in local housing values will eventually reach an equity “tipping point” where owners can sell without loss. We are not going to predict when that may happen, but it will happen.
- The mortgage interest rate has declined again to 4.17%. The continuing level of low mortgage interest rates is good news. While credit standards are unreasonably strict, many buyers can qualify. The real issue is the high numbers of unemployed and underemployed.
What this means: the low rates are fueling a fairly brisk business in refinances, which should help some homeowners get control of their debt. Those that need to buy a home are scoring big with the lowest mortgage interest rates in 50 years, and those buying or refinancing using FHA loans are putting themselves in good position to sell in a few years, when interest rates are higher, and qualifying buyers can assume those low interest rate mortgages.
- The median price for single family homes remains steady, actually rising a bit from September. Remember, the median is the mid-point price for all houses sold. A higher median price indicates that more expensive homes are being sold.
What this means: the higher the median price, the closer we are to a recovery of our housing market. The median sold price for single family homes in October, 2011 was $230,250, in October 2005 it was $250,000.
- The absorption rate (32.5 weeks) and the Days on Market (DOM at 103.5) mean we have returned to a seller’s market.
What this means: only the properties in the best condition in relation to similar properties and offering the best price and/or financing options will sell.
- NAR’s Board of Directors passed a resolution urging lenders to relax their credit polices to encourage increased home sales.With a new and perhaps receptive Congress, formal declarations by trade groups such as NAR have tremendous impact. NAR stands for protecting Home Ownership as part of the American Dream.
What this means: Stay tuned.
About the Author
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog