Castle Pines North Market
ByBy Doug Hutchins, Douglas County Broker
The Denver suburb of Castle Pines North continues to weather the recent housing market turmoil well compared to the rest of Douglas County and many other areas within metro Denver. The average sales price in 2008 was $534,618 compared to the 2007 average of $532,540, a 0.4% increase. Because the square footage of homes available in Castle Pines North can very widely, this average can be skewed by several large home sales.
Therefore, I also look at the average price per square foot to determine value changes. In 2008 the average sales price per square foot was $180.01 compared to $175.58 in 2007, which is a 2.5% increase. Even within the small city of Castle Pines North, there are neighborhoods that out perform and under perform these averages.
Although these statistics are encouraging for the Castle Pines North market, there is another key statistics that creates concern for 2009. Homes are commodities and pricing is driven by supply and demand. In 2008, according to the Metrolist database, 345 homes were placed on the market in Castle Pines North compared to 161 homes in 2007, an increase of 114%. New listings can include “re-listings”, so this data might overstate the actual number of homes reaching the market, but the comparative data does show a significant increase in homes for sale during 2008 compared to 2007. Sales stayed relatively stable, with 176 homes selling in Castle Pines North in 2008 compared to 199 home selling in 2007, a 12% decrease. The fact that home sales have stayed steady is encouraging. However, the large increase in homes available for sale coupled with steady sales would indicate prices must drop to keep the market in balance.
At the end of December, 136 homes were listed for sale. Based upon the pace of sales in 2008, this means there is 282 days of inventory available. In other words, if no new homes came on the market it would take 282 days to sell out the existing inventory. A balanced market is considered to be 180 days of inventory. One word of caution – many Sellers pull their home from the market in December, so the days on inventory calculated is likely an artificially low number because of the homes pulled from the market. This data also supports that there is a surplus supply of homes on the market in Castle Pines North.
If you break down the Castle Pines North market by price point, the sales have dropped significantly in homes priced over $500,000. The number of homes sold priced between $500,000 and $750,000 dropped 26% in 2008 compared to 2007 and the number of homes sold priced over $750,000 dropped 22.3% in 2008 compared to 2007. The number of homes sold in the under $500,000 price point only decreased 1% from 2008 to 2007. This data is consistent with the sales in the rest of metro Denver. Sales of homes requiring non conventional loans (loan amounts over $417,000) have slowed down substantially in the last half of 2008 due to the high interest rates for these loans.
For the first half of 2009 I see continued weakness in prices in Castle Pines North due to the large supply of homes on the market. I do believe Castle Pines North will continue to perform well compared to the rest of Douglas County and metro Denver. If you would like to see a detailed report of home prices in your neighborhood, please call or email me today and I would be happy to provide you this information.
