With the deadline looming to take advantage of an $8,000 federal tax credit, first-time buyers helped boost Denver-area home sales in March by nearly 50 percent over the previous month, according to data released Thursday.
There were 3,602 homes sold last month, up 47.9 percent from the 2,436 homes sold in February, according to data from Metrolist, the area’s multiple listing service.
The March sales represent a 12.4 percent increase from the 3,206 homes sold during March last year.
About 70 percent of the single-family homes sold last month were priced below $300,000, and below $200,000 for condos, indicating that first-time buyers were the driving force for most sales.
“First-time homebuyers are out in force, which will be great for us and great for the market,” said independent real estate analyst Gary Bauer. “The Denver market will show its resiliency and have a very nice year.”
Median prices for single-family homes were $229,000, up 12.3 percent from last year’s $203,950 price. Condo prices were up 2.4 percent from a year ago to $131,579.
“Everything is going to be positive in terms of price appreciation,” Bauer said. “I don’t believe that anything is out there to indicate there is any kind of a cliff we’re coming up on.”
Other industry experts were less optimistic, noting that both the first-time homebuyer tax credit along with a $6,500 tax credit for move-up buyers who have owned their homes for more than five years are set to go away.
Buyers have until April 30 to get homes under contract to take advantage of the tax credits, and when they’re no longer available, reality will set in and the Denver real estate market will flatten out, said Byron Koste, executive director emeritus of the University of Colorado Real Estate Center.
Rising interest and mortgage rates also will keep the market flat, he said.
“Unless there are job increases or another stimulus, things will be really flat. We just hope it doesn’t go backwards,” Koste said. “I want to be optimistic, but I think we’ll have another year of flatness. But for the $8,000 tax credit, we’d be flat now.”
The state’s unemployment rate inched up in February, rising three-tenths of a point to 7.7 percent from the month before, the Colorado Department of Labor and Employment reported last month. Fewer jobs and more people looking for work drove the increase.
“The biggest indicator of the real estate market is jobs,” Koste said. “If people aren’t getting big raises, it’s how many people are moving in, and they’re taking jobs from people who are already here.”
The state’s unemployment rate was on a downward trend in the second half of 2009 but has risen the first two months of 2010. Still, Colorado remains 2 percentage points below the national unemployment rate of 9.7 percent for February.
Meanwhile, 28 homes priced at more than $1 million sold in March, a 7.7 percent increase over the same month last year and the second consecutive month the number has risen, said Chris Mygatt, president and chief operating officer of Coldwell Banker Residential Brokerage.
An expected increase in interest rates and the sense they’re getting more house for the money are contributing to the rise in high-end home sales, Mygatt said.
“It’s the first time we’ve had back-to-back increases in at least 30 months,” Mygatt said. “The low end of the market is strong because of the tax credit, but overall confidence is building in the real estate market in Colorado.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
