Denver’s existing-home market held up fairly well last year compared with 2006, and experts are predicting this year will be similar.
The number of home sales that closed last year was down less than 1 percent to 49,789 compared with 2006, according to data released Tuesday. The number of homes put under contract was down 0.1 percent to 61,663. Not all homes that are put under contract wind up closing, and, in many cases, deals fell through because buyers could not get financing or couldn’t sell their existing homes.
Median prices for single-family homes dipped 1.96 percent to $245,000. Condos didn’t fare as well, with prices dropping 4.46 percent to $150,000.
“With the condo market, I think it has a lot to do with home owners association dues,” said Mike Cox, a broker with Re/Max Professionals Inc. “That’s not a number that’s figured into the purchase, but it affects the buyer when it comes to their monthly payment. When things get tougher, people go to a need-based mentality. They need the bathroom and the bedroom, but the swimming pool doesn’t carry a whole lot of value.”
The number of homes on the market in December was up 0.3 percent to 24,603, compared with the same month a year ago, but was down 9.3 percent from November.
Larry McGee, president and managing broker of The Berkshire Group, said it’s a good time for the average person who wants to buy a house to live in for five years.
“But if you’re trying to buy on a speculative nature, it’s not a great time to buy,” he said.
Independent real estate consultant Gary Bauer said he expects activity in January and February will be slower than in previous years, and pricing will continue to drop throughout 2008. Condo prices are likely to decline up to 8 percent, and single-family home prices could drop as much as 5 percent from last year, he said.
Nationally, existing-home sales for 2007 are expected to total 5.66 million, down from 6.48 million in 2006, but still the fifth-highest year on record, according to the National Association of Realtors.
The association is forecasting sales will edge up to 5.7 million this year and 5.9 million in 2009.
Jeff Thredgold, economist for Vectra Bank Colorado, said things aren’t likely to get better until the second half of this year or early next year.
Anxiety in the capital markets is causing lenders to tighten their standards, so there are fewer buyers in the market, he said.
Still, Colorado has fared better than many other parts of the country. In California, Arizona, Nevada and Florida, the average price of a home increased 84 percent during the past four years. Nationally, the average price rose 47 percent, and in Colorado, the average price increased between 15 and 18 percent, Thredgold said.
“There’s certainly more upside potential in Colorado than in Nevada, California or Arizona where prices jumped more than 80 percent,” he said. “They’ve all got more adjustment to make.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
1.96%
Drop in the median price for single-family homes in 2007 to $245,000
4.46%
Drop in the median price for condominiums in 2007 to $150,000
