by Lon Welsh, Aurora Real Estate
I think that the Denver suburb of Aurora, particularly the northern half of Aurora, is near the bottom of the market cycle. Positive market trends I have noted this year:
The Denver suburb of Aurora may have seen home prices hit bottom.
– Active listing count is steadily declining
– List prices and sold prices, on average, are pretty stable after a 40% decline in a few years
– Number of homes under contract is up
– The number of sales per month is increasing
– Marketing times have decreased
– The sold price as a percentage of list price has been steady (banks are getting better at pricing)
– Expired listings volume is declining
Every indicator is improving in northern Aurora. Take a look at the attached chart to see the average price trend, by months, since 2005.
I have been talking with asset managers that represent banks and the listing brokers that process a lot of foreclosures. They are telling us the banks are slowing down the speed of their foreclosures, hoping to get a bailout from Washington. Many people are late enough in their payments they should have been removed from their homes, but they will spend the holidays in their home because of this new bank approach.
Aurora Market Prices from Your Castle Real Estate/MLS Data
Similarly, homes that have been taken back by the banks are not being listing immediately in the MLS as they have in the past. Asset managers tell us the banks are not going to list until they see what Obama will do.
As you will see in my article on “How sales mix impacts pricing”, selling fewer distress homes will result in prices going up. That might happen to some extent in 4Q 2008, but more so in 1Q 2009. Then, when the banks FINALLY release their foreclosure inventory in late 1Q, they will be sold in 2Q 2009. Prices, on average, will plummet.
So, are we at the bottom? For the moment, yes. Prices in neighborhoods under $150,000 are going to be in for an exciting ride in the next twelve months.
Great charts and video, good to see that your prices seem to have stabilized and that your inventory is falling in the Aurara real estate market place. The numbers of listings are staying constant in my area but prices seem to be moving lower yet.
Being an amateur stock trader, those graphs do look like a promising bottoming pattern. Hopefully lower interest rates on new home loans will help get a bottom in place for the market to solidify prices and prevent further drops in prices.
Definitely looks like things are at a bottom for now. I’ve noticed banks announcing and doing less too – several friends in the industry, and a few others that have asked for “mortgage help”, have been strung along for weeks by banks. I’m not sure what Obama will do, but holding a bunch of homes for months isn’t going to help much.
Any idea on what they’re hoping he does? It just doesn’t seem like there’ much left that he can do…
Looks like you have really done your homework, impressive! I hope that truly was the bottom and that your market is not alone. It just concerns me that we may see a temporary decrease in distressed sales due to the moratorium currently in effect on foreclosures. In my opinion some foreclosures are going to only be delayed and there will be a dramatic increase in the first quarter of 09 as a result of the moratorium ending. Contributing will be the general economy and continued unemployment. I have no empirical data to back it up. Just my opinion and I hope I am wrong.
This is top notch analysis of the Aurora real estate market. My hats off to you.