Aurora, Colorado 2Q 2008 Real Estate Trends

Recap of First Half 2008 Home Price Performance

The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006. Comparing 2006 to 2007, the average home price across the metro dropped 3%, to $303,000. The half of 2008 was $275,000 vs. the first half of 2007 was $306,000: a 10% decrease. These numbers will be slightly different than Metrolist, as they are just Denver Metro and don’t include outlying areas like Fort Collins, Colorado Springs, or Boulder.

The average price of a foreclosure dropped -6% to $168,000 in the first half of 2008. The average short sale was steady at $212,000. The average price of a non-distress sale decreased 5% to $352,000. Sales volume was down for single family homes. Foreclosure and short sale volume is up and non-distress seller volume is down.

Some areas did better than others. The attached chart shows different neighborhoods in our region. Each region has the neighborhood’s name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from July 2007 to June 2008 vs. the twelve months immediately preceding. Next, you’ll see the average home price in the last twelve months and the average days on market (DOM) in the last twelve months.

There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.

The good news is the last four times the market had a change from a buyers market to a sellers market, or vice versa, it was preceded by a change in the DOM. DOM for homes declined in the first and second quarters of this year. Too soon to call it a trend, but it is a favorable sign. Another great indication of hitting the bottom: monthly prices in DSW and AUN have been relatively steady for seven months, after falling rapidly from 2005 to 2007.


Source: Your Castle Real Estate analysis, MLS data



Question or need more detail? Call Lon Welsh at 303 619 0633 or LonWelsh@YourCastle.org

(C) Copyright 2008 Your Castle Real Estate

Denver 2Q 2008 Home Price Trends

Recap of First Half 2008 Home Price Performance
By Lon Welsh and Terry Wenze, Your Castle Real Estate.

The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006. Comparing 2006 to 2007, the average home price across the metro dropped 3%, to $303,000. The half of 2008 was $275,000 vs. the first half of 2007 was $306,000: a 10% decrease. These numbers will be slightly different than Metrolist, as they are just Denver Metro and don’t include outlying areas like Fort Collins, Colorado Springs, or Boulder.

The average price of a foreclosure dropped -6% to $168,000 in the first half of 2008. The average short sale was steady at $212,000. The average price of a non-distress sale decreased 5% to $352,000. Sales volume was down for single family homes. Foreclosure and short sale volume is up and non-distress seller volume is down.

Some areas did better than others. The attached chart shows different neighborhoods in our region. Each region has the neighborhood’s name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from July 2007 to June 2008 vs. the twelve months immediately preceding. Next, you’ll see the average home price in the last twelve months and the average days on market (DOM) in the last twelve months.

There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.

The good news is the last four times the market had a change from a buyers market to a sellers market, or vice versa, it was preceded by a change in the DOM. DOM for homes declined in the first and second quarters of this year. Too soon to call it a trend, but it is a favorable sign. Another great indication of hitting the bottom: monthly prices in DSW and AUN have been relatively steady for seven months, after falling rapidly from 2005 to 2007.


Source: Your Castle Real Estate analysis, MLS data

Question or need more detail? Call Lon Welsh at 303 619 0633 or LonWelsh@YourCastle.org

(c) Copyright 2008 Your Castle Real Estate

Denver 1Q 2008 condo real estate trends

Denver Board of Realtors – Trends Article – May 2008

Recap of First Quarter 2008 Condo Price Performance
By Lon Welsh and Michael Canon, Your Castle Real Estate.

The average condo price in Metro Denver decreased -2% in the full year 2005 to the full year 2006, from $190,000 to $187,000. Comparing 2006 to 2007, the average condo price across the metro dropped -3%, to $180K. Looking at the first quarter 2008 vs. the first quarter of 2007, prices dropped 4%, from $175K to $169K.

The average price of a foreclosure or short sale condo dropped from 2006 from 2007 by -6% to $108,000. The average price of a non-distress sale increased +2% to $211,000. Sales volume in January and February of 2007 was 1,316. In the same period in 2008, it was 1,223, or -7%.

Some areas did better than others. The attached chart shows different neighborhoods in our area. Each region has the neighborhood’s name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from 4/1/2007 to 3/31/2008 vs. the twelve months prior. Next, you’ll see the average condo price in the last twelve months and the number of homes that were sold.

The good news: The average days on market for condos, in January to March 2008, was 108 days. This was a 6 day drop from the first quarter of 2007.

There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales. Less expensive areas generally didn’t do as well. There’s a pretty strong relationship; where home prices are less expensive, there is more of a foreclosure problem, and that tends to drag down the prices.

Source: Your Castle Real Estate analysis, MLS data


Question or need more detail? Call Lon Welsh at 303 619 0633 or LonWelsh@YourCastle.org

(c) Copyright 2008, Your Castle Real Estate

Denver 1Q 2008 real estate trends

Recap of First Quarter 2008 Home Price Performance
By Lon Welsh and Michael Canon, Your Castle Real Estate.

The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000. Comparing 2006 to 2007, the average home price across the metro dropped 2%, to $311,000. The first quarter of 2008 was $278,000 vs. the first quarter of 2007 was $296,000: a 6% decrease. Note that prices in the first quarter are usually a bit less than the rest of the year. This is because families that tend to purchase larger, more expensive homes tend to move in the summer months when their kids are out of school.

The average price of a foreclosure or short sale dropped -3% to $188,000 from 2006 to 2007. The average price of a non-distress sale increased 5% to $370,000. Sales volume over the last twelve months is off -4% for DSF/ASF. Foreclosure and short sale volume is up +31%; non-distress seller volume is off 20%. This trend continued in the 1Q 2008; foreclosure volume was up another 15% at the expense of the non-distress sellers.

Some areas did better than others. The attached chart shows different neighborhoods in Denver. Each region has the neighborhood’s name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from April 2007 to March 2008 vs. the twelve months immediately preceding. Next, you’ll see the average home price in the last twelve months and the number of homes that were sold.

The good news is that the foreclosures are likely to peak in the next six to nine months. Many of the foreclosures were due to resetting rates on ARMs (adjustable rate mortgages). There are two reasons. First, according to Bank of America data, the volume of ARM resets is set to peak in March 2008. It often takes six months or a bit longer for an ARM reset to conclude in the sale of a foreclosed home. Second, the index rates that many ARMs use have declined lately. As a result, some borrowers that might have had a huge shock if their rate reset a year ago might get less of an increase today. For these reasons, we’re likely to hit the bottom of this cycle this year.

There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.

Source: Your Castle Real Estate analysis, MLS data




Question or need more detail? Call Lon Welsh at 303 619 0633 or LonWelsh@YourCastle.org

(C) Copyright 2008 Your Castle Real Estate

Aurora, Colorado 1Q 2008 Real Estate Trends

Recap of First Quarter 2008 Home Price Performance
By Lon Welsh and Terry Wenze, Your Castle Real Estate.
The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000. Comparing 2006 to 2007, the average home price across the metro dropped 2%, to $311,000. The first quarter of 2008 was $278,000 vs. the first quarter of 2007 was $296,000: a 6% decrease. Note that prices in the first quarter are usually a bit less than the rest of the year. This is because families that tend to purchase larger, more expensive homes tend to move in the summer months when their kids are out of school.
The average price of a foreclosure or short sale dropped -3% to $188,000 from 2006 to 2007. The average price of a non-distress sale increased 5% to $370,000. Sales volume over the last twelve months is off -4% for DSF/ASF. Foreclosure and short sale volume is up +31%; non-distress seller volume is off 20%. This trend continued in the 1Q 2008; foreclosure volume was up another 15% at the expense of the non-distress sellers.
Some areas did better than others. The attached chart shows different neighborhoods in Aurora. Each region has the neighborhood's name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from April 2007 to March 2008 vs. the twelve months immediately preceding. Next, you'll see the average home price in the last twelve months and the number of homes that were sold.
The good news is that the foreclosures are likely to peak in the next six to nine months. Many of the foreclosures were due to resetting rates on ARMs (adjustable rate mortgages). There are two reasons. First, according to Bank of America data, the volume of ARM resets is set to peak in March 2008. It often takes six months or a bit longer for an ARM reset to conclude in the sale of a foreclosed home. Second, the index rates that many ARMs use have declined lately. As a result, some borrowers that might have had a huge shock if their rate reset a year ago might get less of an increase today. For these reasons, we're likely to hit the bottom of this cycle this year.
There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.
Source: Your Castle Real Estate analysis, MLS data
Question or need more detail? Call Lon Welsh at 303 619 0633 or LonWelsh@YourCastle.org
(C) Copyright 2008 Your Castle Real Estate

A little more evidence we're past bottom of market cycle

Take a look at the first page, for AUN (Aurora North). Note these positive market trends this year:
- number of active listings steadily declining
- average list price pretty stable (finally!)
- U/C up dramatically
- Number of sales / month up (partially seasonality)
- DOM dropping
- Stability in average sold prices and sold price as % of list
- Sold price as % original price UP a lot – banks are getting better at pricing
- Number of expired listings down

Every indicator is improving this year in AUN. You will see the same trends in DSW (southwest Denver County), but not as marked an improvement as AUN.

By contrast look at DSE (southeast Denver County).
- listings are up (they should be – seasonality)
- Note the average list price ($758,000) is a lot higher than the average sold price ($418,000). Lots of expensive listings brining up the average ask price, but apparently they are not selling
- DOM (Days on Market) declining as it normally would due to seasonality
- Average price declining rather rapidly. Probably a mix issue – smaller, cheaper homes are probably selling better.

Since these homes in DSE are pricier, it has more of an effect on the “average” sales price on metro Denver. Oddly, we could see improvement led by the cheapo neighborhoods, with the lux neighborhoods falling behind for a while. It will be interesting to watch.

Why did Castle Rock Home Prices Drop So Much?

Here’s an analysis of what has happened with home prices in different suburbs around Denver Metro between Jan-May of 2007 and Jan-May 2008:

The average home in Castle Rock didn’t actually drop 17% in value. Instead, sales volume of the large, expensive homes (those over 4,000 square feet) plummeted 71%, while consumer instead bought many more mid-size homes in the 2,400 – 3,000 sq ft range. Here, sale volume increased 26%. The mix of selling fewer expensive luxury homes and selling many more affordable mid-market homes drove most of the sales price decline in Castle Rock. The average price of a mid-size home in the 1,800 – 2,400 square foot range declined only 1.7%.

This is why it looks like home prices are declining in Denver – there are many factors at work.