Saturday, May 21, 2011

Denver Real Estate Market Update May 2011

The April 2011 month end inventory of unsold homes stood at 19,553 units, up 1% from last month and down 9% from April, 2010. The inventory of unsold homes will continue to increase in the coming months as we enter the prime selling/buying season.

- 4,749 units were placed under contract in April 2011, up 33% from March 2011 and down 28% from April, 2010. (Please note that in April 2010, the First Time Home Buyer Tax Credit effectively expired. As such, the April, 2010 market saw buyers create a frenzy situation by placing multiple offers on multiple homes in order to insure use of the federal program.)

- 3,429 units sold/closed in April 2011, up 7% from March 2011 and down 18% from April, 2010. (Please see the above note to appreciate the impact of the First Time Homebuyer Tax Credit program last year.)

In review, the first time home buyer/move buyer needed to have the home under contract by the end of April 2010 and closed by June 30th 2010. The June date was later changed to September 30th to take into consideration the extended time period required to close a distress property. The overall market, while down from last year has remained fairly steady in our “New Normal” world.

- All residential prices averaged $248,991 for April 2011, a slight decrease month over month and year over year.

- Single Family prices averaged $271,969 also a slight decrease month over month and year over year.

o 41% of all Single Family properties sold/closed in April 2011 were under $200,000 and 27% were in the $200,000 to $300,000 price range, comprising over 2/3 of the market.

- Condo prices averaged $158,438 a slight decrease month over month and year over year also. 37% of the Condo properties sold/closed in March were under $100,000 and 74% were under $200,000.

Looking at Median home price values:

- Condo median prices increased 1% to $121,200 in April 2011 when compared to March 2011 and decreased 13% from $139,700 in April 2010.

- Single Family median prices decreased 1% to $222,000 in April 2011 when compared to March 2011 and decreased 3% from $230,000 in March 2010.

The leading counties for home sales in the Denver market are: Denver, Arapahoe, and Jefferson.

On average a homeowner sells their existing home every six (6) years.

Home ownership continues to be the single largest purchase in one’s lifetime.

Advice to Sellers:

Establish your expectations as to home pricing, deferred maintenance needs, and the average amount of time required before your home can be sold.

Denver is in the prime home selling season. Take advantage of this prime home selling, position your home as the best that it can be to get your home sold.

Advice to Buyers:

Rental rates continue to increase and availability of rental properties continue to decrease. Denver continues to be a great market for first time home buyers.

As we move through the prime home selling/buying time of the year, more and more buyers will be entering the market. Establish your personal expectations of home ownership benefits and costs.

One may ask “Does buying really make better sense than renting?” While the answer is personal, one should take into consideration the results of a recent Fannie Mae National Housing Survey which shows that forgetting the finances for a minute, four of the biggest reasons people buy a home have nothing to do with money: they want a place to raise and educate their children, a place where their family will feel safe, to have plenty of living space, and to have control over the space.