By Lon Welsh and Michael Canon, Your Castle Real Estate.
Comparing 2006 to 2007 in Denver and the suburbs such as Aurora, the average home price across the metro Denver area has dropped 3%, to $303,000. The average price in 2008 was $267,000: a 13% decrease. Comparing the 1st Quarter of 2008 ($271,000) to 1Q 2009 ($241,000), we saw an additional 11% drop.
Much of the overall decline isn’t a decline in actual homes prices. It is a mix issue. For example, sales volume of homes over 4,000 square feet has plummeted in the last twelve months. Middle-market homes have generally been steady in their sales volume. Very inexpensive homes under 1,000 square feet have increased their sales volume. Our estimate is that the average price decline, after taking mix into account, is only about half of those headline-grabbing figures.
Three months ago, we said we expected to see fewer bank sales in the first quarter. This proved to be the case, the number of REO and short sales declined 1% between January and February 2008 and the same period in 2009. Unfortunately, non-distress volume declined 36% in those time periods. This drives the mix issue discussed above.
The attached chart shows different neighborhoods in our region. Each region has the neighborhood’s name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change in the twelve months from April 2009 to March 2009 versus the twelve months right before that. Next, you’ll see the average home price in the last twelve months and the average days on market (DOM). There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.
These numbers will be slightly different than Metrolist, as they are just Denver Metro and don’t include outlying areas such as Colorado Springs or Boulder.
Lon can e-mail you a high reolution copy of the map or ask Lon any question below:
Source: Your Castle Real Estate, Metrolist