By Doug Hutchins, Castle Pines North Real Estate Broker
Castle Pines real estate market held relatively steady in third quarter 2008
Through the first three quarters of 2008, 126 homes have sold in Castle Pines North, compared to 127 selling in the in the same period in 2007. The average sales price has dropped from $532,540 for all of 2007 to $496,866 for the first nine months of 2008, which is a 6.7% decrease.
However, due to the variety of home sizes in Castle Pines North, a Denver suburb, and the relatively few homes that sell each year, I prefer to focus on the average price per square foot, which helps adjust for the larger homes that sell. The average price per square foot has dropped only 2.48% from $175.58 per square foot to $171.22 per square foot.
Keep in mind that these are just averages. There are differences even within Castle Pines North regarding market activity and pricing.
For example, the Greenbriar/Briar Cliff neighborhood (this neighborhood is north of Castle Pines Parkway and east of Monarch) has seen larger price drops due to a large number of homes for sale. Castle Pines North is performing better, though, than many other areas in metro Denver. Metro Denver as a whole has seen a 12.1% drop in the average single family home price through the first 9 months of 2008.
Overall, pricing is driven by supply and demand. If supply goes up, prices will drop. Through the first nine months of 2007, Castle Pines North had 141 new listings. In 2008 during the first nine months, Castle Pines North had 258 new listings, which is an increase of 83%. HOWEVER, this is based on MLS data (the metro Denver Realtor database of homes for sale). The MLS allows for the same home to appear as a new listing multiple times, so the true number of new listings is lower than this amount.
Regardless, it is clear that the number of homes coming on the market has increased substantially in 2008 but the rate of sales has stayed steady. This increase in supply forces prices lower.
In 2007 the inventory was staying static and prices were holding firm. However, beginning in January 2008 the amount of New Listings compared to Under Contracts increased substantially. This trend has continued for 8 of the 9 months of 2008 (with August being the exception). This supports the data above showing that average prices are dropping. For prices to stabilize in Castle Pines North, we need to see New Listings stay comparable to Under Contracts for a minimum of four months. For prices to increase Under Contracts would need to exceed New Listings for a minimum of four months.
Price does matter! If you look at the market activity in Castle Pines North in the under $500,000 category, the supply picture is better compared to Castle Pines North as a whole. The August trend of New Listings compared to Under Contracts being equal has extended into September. I will be closely watching the October and November numbers to see if we hit the four month benchmark showing a turn around in pricing. This four month stretch would indicate we have hit a low in the under $500,000 price point in Castle Pines North and should start to see prices move up in 2009.
If you have more questions about the market in Castle Pines North, don’t hesitate to contact me by using the form below or calling me at the number on the right. I also update the market statistics for Castle Pines North and metro Denver monthly on my web-site at www.DougHutchinsHomes.com and at www.CastlePinesNorthInfo.com
4 Comments
I think a main reason that people are keeping their homes off the market is because they don’t think they will get the price they need to get out from under their loan.
Many people are just starting to hear about home staging, but it really can make a difference to the potential buyer. It increases the perceived value of a home and sort of “dresses it up for sale”. That may help us get through this dry spell too.
I’ve been to this subdivision. Very nice area.
Scott´s last blog post..700 Grove
When you say the average price per square foot in CPN is 172.72 is that include the basement. Thanks
Joe,
The average price per square foot does not include any basement square footage. I do track total finished square footage, which does include finished square footage in the basement. I like to look at only above ground square footage in my statistics, but when it comes to pricing individual homes, the average price per square foot is not a great gauge of individual home value. Many additional factors can affect value, such as lot, views, finished square footage in the basement, condition, etc. If you would like more information on these other adjustments or the data for price per average finished square foot, please blog back or email me directly.