Single-family home outlook improves in Denver

Dennis Huspeni Reporter – Denver Business Journal
Date: Thursday, September 8, 2011, 11:29am MDT

Sales are up, and foreclosure rate and inventory are down, for single-family homes in the metro Denver market, according to three studies recently released.

The information gleaned from CoreLogic’s June foreclosure activity report showed the foreclosure rate dropped .17 percentage points from June 2010. Also, Metrolist Inc.’s sales report for August reported sales jumped 29 percent from August 2010.

Gary Bauer, an independent, Littleton-based real estate broker and Metrolist analyst, compiled the Metrolist Inc. statistics for August. He pointed out that the months of June, July and August each exceeded $1 billion in sales in the metro Denver market, including $1.04 billion for August.

“Frankly, I had expected only one month to be over a billion, not all three, so I’m pleasantly surprised,” Bauer said. “More importantly, you can point to those three months of more than a billion in a row when the focus has not been on homes.”

Those three months typically are the peak of the home sales market anyway, but Bauer said it’s been at least three years since he’s seen a three-month streak of more than a billion in sales.

Learn the metro Denver house sale Myths of real estate

“It was not uncommon in the early 2000s we’d have month over month over month of a billion or more,” he said. “To put that in perspective, we barely cracked $10 billion for all of 2010.”

Regarding foreclosures, the CoreLogic report showed Denver, Aurora and Broomfield counties’ foreclosure rate at 1.66 percent for June 2011, a decrease of 0.17 percentage points from 1.83 in June 2010.

That’s 1.80 percent below the national foreclosure rate of 3.46 percent for June.

The rate of delinquency rate also dropped. The June CoreLogic report shows 4.40 percent of mortgage loans in the three-county area were 90 days or more delinquent, compared to 5.22 percent for the same period last year — a drop of 0.82 percentage points.

David Simonson, Realtor for Re/Max Professionals, said another good sign for the local housing market is that available inventory of single-family homes, including condos, dropped 5.41 percent from July and 28.15 percent from August 2010, according to Re/Max’s analysis of the Metrolist numbers.

“I think it’s going to continue with a very steady sales routine,” Simonson said. “What we’ve seen the last couple of months, we’re going to continue on with that. I don’t know if we’re going to see 6 percent increases month over month.”

Simonson said he’s been “inundated with showings for properties and offers” this week.

“A lot of that has to do with people getting their kids in school, and Labor Day behind us and the end of summer travel season,” he said.

Bauer also was surprised by the marked decline in inventory.

“I anticipated that early in prime season, the inventory would hit the 24,000-plus mark, but it never made it,” Bauer said. “ At the end of high season, historically inventory drops. But if you pull the statistics aside and look at what’s going on, people who would have been in the marketplace — those who would normally make a move to upsize, make a parallel move or downsize — are not in the market today. They’re holding back and waiting to see if they have a job.”

Other highlights from Bauer’s Metrolist report:

• The number of homes placed under contract in August, 4,537, was up 7 percent from July and up 14 percent from August 2010.

• Homeowners sold 3,973 units in August, up 4 percent from July and up 29 percent from the same month last year.

• Single-family average prices stood at $260,821 for August, down 3 percent for both month over month and year over year.

• The average price for condos went up to $168,050 for August. That’s a 10 percent increase over July and a 5 percent rise from August 2010.

Simonson said the condo/townhome market here is getting stronger, likely because the investment market for rentals has been brisk with low vacancy rates and higher rents.

“All the focus is on single-family homes, but it’s important to know the number of sales and under contract on condos/townhomes is up significantly from last month,” he said.

Metrolist Inc. of Greenwood Village is metro Denver’s Multiple Listing Service, a database of home sales activity for real estate professionals.

CoreLogic of Santa Ana, Calif., provides consumer, financial and property information and analysis to business and government.

DHUSPENI@bizjournals.com | 303-803-9232

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About dherries
Dave and Sally Herries and The RealtyColorado Team - Real Estate Broker serving the metro-Denver area. Offering properties in urban, sub-urban and rural areas. Our mission statement is "Enriching lives through real estate."

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