Metropolitan Denver’s housing market continues to sag and isn’t likely to rebound until next year at the earliest, a housing analyst reported Tuesday.
The number of new homes on the market in the first half of 2008 was roughly the same as last year, indicating that builders aren’t confident enough to believe a comeback is imminent, according to Cheri Meyn, owner of the Genesis Group, a Centennial consulting firm that analyzes housing data.
“We’re going to be banging around the bottom for a while,” Meyn told a group of real-estate executives and developers at the company’s regular quarterly presentation of housing data.
“2008 is going to be a very rough year, with some recovery in 2009, very mild recovery,” she said.
Tuesday’s report from the Genesis Group came on the same day that a pair of national reports delivered a somewhat mixed picture.
The Standard & Poor’s/Case Shiller U.S. National Home Price Index dropped 15.4 percent for the one-year period ended in June. Denver, however, was down only 4.7 percent for the period and has shown three straight months of positive price growth, offering a glimmer of hope to some observers.
Separately, the U.S. Department of Commerce reported that nationwide, new-home sales rose by 2.4 percent last month to a seasonally adjusted annual rate of 515,000 units, the most since April.
According to Genesis, new- home sales for metro Denver were down by 47 percent in the first half of 2008 compared with the same period last year. Resales for the same time frame were down 7.5 percent.
The impact of the subprime- mortgage meltdown and the resulting cave-in from foreclosures is still strong.
Better than 83 percent of all foreclosures are from home purchases below $200,000, and 90 percent are from purchases below $300,000, Genesis reported.
“The biggest challenge is in the number of low-priced homes from the distressed market,” Meyn said. “It is not new homes.”
That challenge comes from home owners who would like to move up to a newer or larger home — a niche that’s reflecting a larger number of sales than might be expected in a downturn — only to find stiff competition from a glut of houses already on the market.
“Sellers are having a difficult time selling in the lower price ranges because of that glut,” said Beth Culberson, a senior analyst at Genesis. “Foreclosures are still on pace to outperform the record levels we saw in 2007.”
David Migoya: 303-954-1506 or dmigoya@denverpost.com
