AGENT MLS HOME FINDER

Denver’s real estate market is like Charles Dickens’ A Tale of Two Cities. Only in this version of the classic novel it’s the rich suffering unfortunate circumstances.

Luxury home sales have cratered but starter homes for first-time homebuyers are selling fast and actually at prices that are appreciating.  Home sales of over $1 million are slow and home sales above $2 million are exceptionally rare.

But, buyers seeking the $8,000 first-time home tax credit have driven up demand and prices.  In fact, 93% of all sales are now under $500,000 in the Denver real estate market.  Homes priced under $200,000 actually appreciated during the last three months.  So, it’s a buyers market for luxury homes in a sellers market for starter homes.

At least the Denver unemployment rate is better than the national average.  Unemployment here for the state of Colorado is 7.8%.  And, it’s lower than that in the Denver metro area.  Relocation buyers are still coming into the marketplace but at a slower rate than they were last year.  Interest rates have been very attractive and accommodated first-time home buyer too.

Last month under contract sales were the same as the previous month and down 6% from the same month last year.  But, sales of starter homes priced below $200,000 actually have been increasing for the last three months and are actually higher than the same period a year ago.  But, sales of homes or not distress sales, either for closures or short sales, actually increased by 7% from the year ago period.

Luxury home sales across the country are selling for less than they have been. Denver home sales in the $2 million range are generally significantly below the asking price.  For example, one listing in my office that had been priced in the $2.4 million range recently sold at $1.8 million.  Very few sales are occurring over $3 million.

The best news for Denver area home sellers is that the number of active listings on the market has continued to decrease.  It’s now down to 20,225 homes and condominiums units for sale.  That’s a decrease of 3% from July and 18% from the year ago period.  If supply continues to drop at this unprecedented rate, home prices in all market segments may experience the price appreciation as homes under $200,000

So is Denver real estate market improving?  It depends on which market. Denver seems to be experiencing the same demand pressure on the lower and as homes are nationally.  A recent survey by The National Association of Realtors found that 30% of all home buyers are being influenced by the $8,000 tax credit for first-time homebuyers.  There are currently six bills in Congress being considered to extend that tax credit beyond its current expiration date of November 30, 2009.  If the tax credit is not extended it’ll be hard for the starter home market to continue to sell so many homes and experience price appreciation.  If, however, the tax credit is extended it could allow more of the sellers of starter homes to buy more expensive homes.  Demand for larger homes is certainly influenced by the liquidity of the starter home market.

Market information provided by Larry Hotz Denver Real Estate Agent who is an area expert. Feel free to contact Larry if you are interested in getting more information about Denver and surrounding areas.