Getting your player ready...
During a summer when the economy offered little to crow about locally or nationally, high-volume RE/MAX agent Eva Stadelmaier was noticing a decided pickup in sales of homes around the pretty Ken Caryl Valley, her specialty area. “I’ve sold $5 million inventory in the last month,” she said, noting that two homes were set to close today. “It’s thriving; more than double what it was last year.”
That comes as no surprise to Jack O’Connor, broker/owner of The Denver 100 Real Estate, who for eight years has tracked sales numbers for his monthly “So How’s The Market?” newsletter. “The Denver market has continued seeing inventories of homes and condos absorbed,” O’Connor told readers this month. “With the lack of new construction, those levels are now half of what they were when the market dived in 2008. They’re the lowest for any September since 2003.”
Walking down Wynkoop Street toward a 1-bedroom loft in LoDo he sold last month at $590,000 – a pretty good price, he adds – O’Connor says that the most noteworthy stat has been the disappearance of condos. “That’s been remarkable,” he said. As renters have opted away from the low-vacancy apartment market in favor of purchasing, Denver area condo inventory dropped to around 3,200 units at the start of the month — down almost 40% from a year ago; down around 10.5% from where it stood at the beginning of August.
Meanwhile, sales of combined homes and condos were up 29.04% over the year since September of 2010, and dollar volume of those sales was up 8.2%. The average sales price dropped 2.96% over the year; however, average price as a percentage of asking price was up 0.567%. “We’re seeing year-over-year sold data that outperforms the previous year,” he added. “That’s significant because we’re no longer comparing to numbers inflated by the spring 2010 tax credit. This is a true comparison against what was happening last year.”
The high-end market, O’Connor said, is still a long way from recovery, loaded with bargains; however, falling supplies of homes in the lower end are already giving homeowners increases in value. “It’s conservatively a half-percent, and it’s probably closer to ¾% or 1%. I can show you where a $200,000 home is going up around $2,000 a month. Inventory is so low that in some price ranges, it’s a bidding war.”
The 13,436 single-family homes on the market Sept. 1, O’Connor noted, represent a 4.2-month supply of homes, based on annualized sales. The 3,195 active condo listings now approximate a 4-month supply. “This market is showing every sign of being at the bottom; and if we see overall supply drop to 12,000 homes or so, that will be a market on the upswing.”
With the outlook mixed on whether Denver will see substantial job growth during the remainder of 2011, where’s the market headed? “Homes $500,000 to $1 million will have little or no appreciation, and sales above $1 million still reflect way too much supply,” O’Connor said. Denver city homes in those ranges will outperform the suburbs, he notes, adding that in addition to lower unemployment, the market needs stability in lending guidelines to get more buyers back in the game.
But the rosier picture in the lower-end market could wash over to higher ranges as sellers take advantage of opportunities to move up. “If a homeowner buys upward to 50% of the current value of their home, that tends to increase sales in the $250,000 to $500,000 range,” says O’Connor. “Homes of $500,000 to $1 million will see that trend in 2013, with homes above $1 million poised to benefit in years to follow.” Jack O’Connor’s monthly So How’s The Market? letter is available by emailing joconnor@thedenver-100.com.
If you go…
“So How’s The Market,” monthly report by broker Jack O’Connor
PHONE: 303-880-8561 EMAIL: joconnor@thedenver-100.com
