Denver's real estate market just got better for buyers. We thought that June prices had bottomed out, but in July median prices dropped even lower. The drop for residential single-home properties was 3.48% from June to July, but was even steeper from July 2007, a startling 10.1%.
Condo median prices rose slightly, .4%, from $148,345 in June to $149,000 in July. But prices dropped 5.7% from July 2007. One possible answer for the less precipitous price drop for condos affordability. On average condos cost much less than homes.
More homes sold in July than in July of last year, but fewer went under contract. Buyers have plenty of homes to choose from, and are taking their time making a decision about buying. They're asking for more concessions from sellers, and sellers are paying them.
Fewer homes are on the market this July than were available in July 2007, which shows a shrinking of inventory likely due to investors snapping up foreclosed homes leading to lowered prices overall. But because the number of homes on the market has decreased, it may be a sign that the Denver market is poised to recover. Sellers continue to take a beating, and predictions about when the slide will stop have proven to be inaccurate.
Denver's economy is still outpacing the nation, with "nine of 18 economic indicators show[ing] positive monthly trends and four mov[ing] in a positive annual direction. Recent trends are steady, as this month's number of positive indicators match last month's number" according to the Metro Denver Economic Development Corporation's August Monthly Economic Summary. Job growth is predicted at 1.5% for the remainder of 2008 compared to the national average of from .5% to 1%. It's still a good time to buy Denver real estate.
A question asked by many of my buyers is "If I buy now, what about declining values? Will my home be worth less when it comes time to sell it?" The answer varies depending on how long you stay in your new home.
On average buyers stay in their homes about 5 years before selling according to independent real estate broker, Gary Bauer (Bauer issues a monthly market report used by the Denver dailies) is widely regarded in Denver real estate circles as a market expert. In an April 2008 report in the Rocky Mountain News by Rob Reuteman, Bauer is quoted on the issue. He says, "If I bought my home a year ago for $200,000, and I had to sell for $180,000, I'd be upset. If I'm staying in the Denver market I take $180,000 and buy a house that would have cost me $200,000 a year ago. But I'd still have a little feeling that I really didn't do so well. If I were that individual five years ago, my average appreciation would be 39 percent. Would I be concerned about a 10 percent drop in price today? I don't think so. I would have bought it for $130,000 and sold it for $180,000."
The Denver Post has updated their very useful interactive map of home values across the metro area. You can look at values by neighborhood, discover whether values are rising or declining and much more.
Interest rates are still low (conventional loans were at 6.5% for well-qualified buyers as of August 12, 2008 from our preferred lender, Rate One, The Mortgage People). Homes are more affordable. Denver's economy is steady and jobs are expected to increase this year. The metro Denver and Colorado state unemployment rate in April were 4.4%. 2,000 new jobs are expected in Colorado in 2008, and foreclosures are expected to drop by about 9% according to Patty Silverstein, Chief Economist for the Metro Denver Development Corporation.
The Denver market is not in the same situation as many cities. We're still riding out the effects of the mortgage crisis which led to so many foreclosures, but values haven't dropped nearly as much as the rest of the country. Values dropped about 2% in 2007 and are expected to drop another 3% overall in 2008. Contrast that with Orange County, California (suburban Los Angeles) which dropped 10.2% or Boston a 13.3% drop.
Many parts of the country have suffered a double whammy with the real estate bubble bursting together with the number of foreclosures rising which put a downward push on prices. Denver's bubble burst in 2001, but values remained steady until 2007 when they began to drop. 2006 values increased an average of 2.7%, while values at the end of 2007 had dropped by 2%, a difference of 4.7%.
Denver's cost of living makes it an easy choice over higher cost areas like both coasts. According to CNNMoney.com it costs 51.1%% less to live in Denver than in San Jose; 43.8% less than in San Diego; 66.6% less than in San Francisco; and 12.9% less than Seattle. If you live in the east, it will cost 37.6% less than in Washington, D.C.; 32.8% less than in Boston; 101.9% less than in New York; 22% less than in Philadelphia.
For buyers coming from the south and the midwest, Denver could cost more. It costs 4.9% more in Denver than in Atlanta; 12.8% more than in Houston; 8% more than in Dallas; 8.3% more than in Dayton, Ohio; 5.2% more than in Rochester, MN, and 10% more than in Boise. But living in Denver still costs 10.7% less than in Chicago, 15.1% percent less than in Portland, and a whopping 49.3% less than in Los Angeles.
Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references. Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.