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.