By Lon Welsh, Investment Property Specialist
Denver home prices have decreased slightly. But, have they really?
The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006. Comparing 2006 to 2007, the average home price across the metro dropped 3%, to $303,000. The average price 2009 was $267,000: a 13% decrease. January 2009 saw the trend continue: prices dropped 16% from $269,000 (January 2008) to $225,000 (January 2009). Prices also declined from 6% from December 2008 ($240,000).
Much of the decline is a mix issue.
Typical Washington Park Homes have been seling well.
For example, sales volume of homes over 4,000 square feet has plummeted in the last twelve months. Middle-market homes have generally been steady in their sales volume. Very inexpensive homes under 1,000 square feet have greatly increased their sales volume. The average home has not declined in value by 13% in the last year – the reality is that the average price decline, after taking mix into account, is only about half of that.
- 1. All home sales declined, overall, from 6,478 to 5,800 units sold, a decline of 10%. For homes over $500K, unit sales declined from 649 to 366 units, a decline of 44%. Neighborhoods (these tie to the big map) that saw an increase sales unit volume:
- a. Buffalo Mesa, from 0 to 3
- b. Heritage Hills, from 3 to 6
- c. University Hills, from 1 to 4
- 2. Biggest decliners in unit volume over $500K:
- a. Saddle Rock, from 12 to 3 (ouch!)
- b. County Club, from 13 to 3
- c. Larkspur Heights, from 14 to 2
- 3. For homes over $1,000,000, sales continue to be on vacation. Unit volume declined from 134 to 62 sales.
- 4. We have 1400 homes over $1MM on the market. Out of 18,224 homes, that’s an amazing percentage of the inventory!
- 5. Some notable declines:
- a. Pinery, from 7 to 1
- b. Hilltop from 9 to 3
- c. Cherry Creek from 5 to 2
- d. Country Club, from 6 to 0
- 6. The strongest lux market was Wash Park East, with 5 unit sales in each time period.
Condos had similar results.
For buyers considering a purchase of a luxury home, there is an amazing array of inventory and plenty of motivated sellers
3 Comments
In our market place in Naples, we are seeing more sales in 2008 than in 2006 and 2007, however the median price has dropped with much of the activity in the under $300k price point.
Condominium sales are up 12% and single family homes are up about 30%.
Condominium median price dropped by about 18% and single family homes the median price dropped about 32%.
glenn´s last blog post..Why buy Naples real estate now
So what’s better/worse? High priced homes that don’t sell or low priced homes that do?
Low priced homes that are selling in accordance with historic rent ratios are what is good and healthy. There are 100 million renters in this country, many of whom, like me, have saved plenty of money over the last four years and will buy, but only when the numbers make sense.