Price Declines: Not The Same
ByBy Lon Welsh, Realtor Statistician
Price declines in the Denver real estate market are not effecting all homes in the same way.
If you compare the average sales price of home from January to May 2009 and compare it to the same time period in 2008, you will find the average Denver home price dropped about 8%. (It has since improved a bit to a -6% year on year decline). Are all homes impacted in the same way? It depends a lot on the size of the house!
- Larger homes in the Denver real estate market have declined the most.
This chart shows you a number of different segments in our market. On the upper left, we have the smallest 10% of the homes that sold, those that were under 910 square feet. You can see their prices have been the most stable: only a -2% drop. On the lower right, you can see the largest 10% of the homes, those with over 2875 square feet. These homes dropped the most in price, -17%. The home size segments in the middle generally matched the overall market average price drop.
You can use this when you talk with your sellers. If they have a smaller home and are considering listing, it looks like we’re about at the bottom. In many neighborhoods, we are clearly past the bottom.
If they want to trade up, now would be a good time to do so. If you are talking to a seller with a larger house, you can have the facts at your fingertips to give them an honest assessment of what is going on. If they need to sell, perhaps the best idea is to price it right and move it now before the prices drop further.
It really is interesting how the market can be affected so differently in areas that are located so close to each other.
Lon,
I am an Arizona REALTOR dealing with homes and condos for sale in the Phoenix and Scottsdale areas. It looks like your market has not taken the huge hit ours did. In Phoenix, condos and homes dropped in price 30%-50%. I am curious how the different areas of Denver areas were affected. My in-laws live in a modest 1400 square foot home Lakewood and are looking to sell in around a year. How did that part of town fair compared to the rest. What does the inventory look like? I will check out the rest of your site to see if I can find out more. Nice post
Thanks,
John Landry