By Lon Welsh, Your Castle Real Estate
Denver lofts, condos and town homes have notoriously underperformed the macro Denver real estate market. But, in the first half of 2010 even lagging condos showed signs of rebound as they already have in cities like Washington DC and New Orleans.
We analyzed Denver condo trends in the first half of 2010 versus the first half of 2009. The average price was up +3%. After several years of declines, prices are finally up a bit. It is premature to call a bottom to the market, but we’re certainly close if we are not at the bottom. This chart shows you this information for a number of different neighborhoods.
The number of sales was up 11%. The tax credits did a lot to drive this. We should expect that the second half of 2010 will decline in sales volume. Days on Market (DOM) declined 16 days. We’d expect that DOM will increase in the second half of the year.
Obviously, not all Denver neighborhoods enjoyed the same price appreciation. Central Denver neighborhoods tended to fare better overall but here were some exceptions.
Finally, what will happen next? MOI (months of inventory) is a great leading indicator. If the buyers kept buying at the pace they have in the last year, and the number of listings did not change, how many months would it take to clear the inventory? This has been stable, for the entire condo market, at 7 months. This is a slight advantage to the buyers, overall.
Low price properties have less MOI. Condos priced under $135,000 are lasting on the market 5.2 months on the average. High price properties have high MOI. Lofts, condos and town homes priced over $285,000 are marketed an average of 17 months. The MOI varies quite a bit by neighborhood, so look at the map to see how your area is doing.
The exception to that rule is that the pricey Cherry Creek real estate and Washington Park neighborhoods enjoyed both good price appreciation and fewer months of inventory in the first of 2010. Areas near downtown also appreciated and saw good market gains.
Overall, Denver lofts, condos and townhomes homes which traditionally lag the market shows signs of improvement. But, we will withhold calling a “market bottom” until at least one more quarter of results are int he books. Stay tuned.