Denver Real Estate Outlook

November statistics show the average and median price for single family homes continues to drop. The explanation is very evident, 75% of the sales closed are under $300,000. A year ago only 69% of residential sales closed under $300,000.

In 2007 only a 8.5% of the sales closed in October were under $110,000, this year the number has increased to 18%!

This huge increase is a reflection of what I’ve been reporting for months, the market is great for first time home buyers and investors.

The question on the minds of many who are still standing by, “When will we hit bottom?”

The answer is Past Tense Folks!

We hit bottom last April/May. The Denver real estate market (in general) is on the way up. Our market would be in much better shape if the financial market would loosen up funds.

Average days on market for homes under $200,000 continues to drop. What we are seeing here is a SELLER’S Market.

As prices increase the days on market also increases.  Homes priced over $500,000 are lingering on the market longer as time passes.  This is a result of the changes in lending requirements.  Buyers now need to have a down payment, so naturally the higher the price the higher the down payment.  The upper end of our market is slow, very slow.  Here is were we find a BUYER’S Market.

What I’m Seeing in The Denver Real Estate Market

Cash is king and there seems to be a lot of it being spent on real estate.  A couple weeks ago an associate of mine wrote a full price, no contingency offer to close within a month on a nice older home.  They were astounded to learn they were beat out by a cash offer.

Typically cash is not a common way to purchase real estate.  98% of the time buyers use some sort of financing.  Now that the stock market is iffy and interest rates are low, buyers are using their cash for real estate.

It only makes sense.  Buy low sell high, who said it first? I don’t know, but he certainly was talking about the current Denver real estate market.

The window is closing.

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3 thoughts on “Denver Real Estate Outlook

  1. Mack Perry

    We get that same “When will we hit bottom” question in Atlanta. When asked I respond with, we will know when we hit the bottom about four months after we hit it. Trying to time the real estate market is like trying to time the stock market, it just isn’t going to happen with any certainty.

    I would be curious to know how the market is in Denver regarding new construction vs. resale. In the northeast quadrant of Atlanta resales are out selling new construction 4 to 1. The builders are offering deep discounts which is adjusting the inventory down to more normal levels. Building permits for new homes have slowed dramatically and the builders and developers are sitting on lots except for presold homes with substantial nonrefundable down payments. The new construction segment of the Atlanta market is a buyer’s market while the resale segment is approaching a level playing field while on its way to being a seller’s market.

  2. Kristal Kraft, Denver Realtor

    Mack ~ You pose a very good question and with it the content for yet another blog! Our builders have cut back on inventory, building for the most part “to order”. The existing “inventory” homes are being offered at significant discounts. Partly because of the slow market and partly the end of the year is approaching.

    I’ve seen this happen before and it is a good thing. When the builders stop building the resales get purchased. First time buyers come into the market and the trickle starts upward.

    Soon we will have a full fledged seller’s market. Soon that is, when the financial industry figures out how to do business again. :)

    I am so glad the Election is over. This one nearly killed us.

  3. Mack Perry

    Kristal, here are some comparison figures for the 3 primary areas of The Atlanta Market that I concentrate on. For the month of October 17.26% of the closed transactions were new construction vs 82.74% that were resales. Similar figures coincide for properties that went under contract.

    Like you I am also glad the election is over with the exception in Georgia we are having a runoff for US Senator. I was so ready for the half truth ads to be over.

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