Getting your player ready...
The number of homes placed under contract in the Denver area in May soared by 23 percent from May 2010, shows a report released today by independent broker Gary Bauer.
May marked the first year of 2011 that year-over-year figures were not impacted by the federal tax home buying tax credits, which required that homes be placed under contract by April 30, 2010. In May 2010, the number of homes placed under contract had plunged by 27 percent from May 2009.
“I think this was a nice, slow, positive May,” Bauer said. “Nothing really stands out, with the exception that inventory remains pretty steady and below 20,000.” There were only 19,573 unsold homes on the market, an 11.1 percent drop from the 22,016 unsold homes on the market a year earlier.
This was the lowest number of unsold homes on the market for a May since 2001, Bauer said. The inventory was up a mere 0.1 percent from April, when it stood at 19,553. Typically, the inventory increases at this time of the year, as people put their homes on the market for the seasonally strong spring and summer months.
The report,”confirms what we are feeling on the street,” said Lane Hornung, co-founder, president and CEO of 8z Real Estate and COhomefinder.com. “The post tax credit market is getting ever so slightly stronger. Inventory levels remain low, sales volumes are off year over year but getting stronger, and looking ahead, under contracts are up. This is causing overall upward pressure on prices. My bet is that these price increases will eventually be reflected in the Case-Shiller data for May, but unfortunately we won’t see that data until the end of July.”
The average price of a single-family home sold and closed was $279,443, compared with $273,285 in May 2010 and $271,969 in April. The median price was $230,000, unchanged from a year earlier, but up by $8,000 from the $222,000 in April. “Our prices are up from about 1 percent to 3.6 percent,” Bauer said. “Despite all of the dire remarks from the Case-Shiller report, the Denver market is holding its own and doing quite well. We will see if this is an anomaly or if it continues as a trend.”
“We’ve been telling our brokers to expect the first half of 2011 year-to-date numbers to be down from 2010,” said Gretchen Faber, Managing Broker of Kentwood-Cherry Creek. “It’s been said many times, but the tax credit last year directly affected sales. With May’s under contract number jumping 23 percent from last May, that seems to be holding true since the tax credit ended in April 2010, creating a lull beginning in May. Prices aren’t down year- over- year as much as one would speculate looking at the increase in days on market, and I think that’s due to our low inventory helping to put a floor under prices. There’s been much talk about a double dip housing recession, but it’s important to see the tax credit as adding a bubble of activity, rather than thinking there’s a double dip. We’re in a very slow recovery and housing market health going forward will rely on jobs and employment to continue the stabilization.”
As far as other metrics:
Under contracts are up 0.6 percent from April, when there were 4,749.
Year-to-date, there have been 19,937 homes placed under contract, 18.7 lower than the 24,510 in the first four months of 2010.
There were 3,732 closings in May, up 8.8 percent from the 3,429 in April..
Closings were down 14.5 percent from the 4,365 in May 2010.
Year-to-date, there have been 14,755 closings, down 12.9 percent from the 16,944 in the first four months of 2010.
The weekly sales rate in May was 5.64 percent, compared with 4.07 percent in May 2010.
Bauer’s analysis is based on Metrolist data.
