Monday, February 19, 2007

Denver Real Estate Cycle

Well if you cannot tell by my previous posts I tend to be a bit of a trend watcher.
In 2005 I saw a spike in NEW LISTINGS occur towards the end of the year.
I have seen this before…end of the year wannabes who say “well if I can get that much I will sell”. They are also known as greedy sellers and silly Realtors who take the listings. Now take a look at the NEW LISTINGS in January 2007!!!! Is this the start of a trend? Oh by the way, the new home builders have reported 14% fewer new home starts. What do you think?

In 2005 Sales stayed even with the previous year.

Then the press hit Denver with the stories of so many listings on the market and the foreclosures. This had a stifling effect on the sellers and the buyers so in 2006 sales were down by over 10% from the previous 2 years, but right on que for the years of 2001, 2002, & 2003. Here is the graph of sales:

One of the reasons I watch these indicators is to help my Buyers make good decisions. The other is selfish…I knew we were going to have a bad year in 2006 so I re-aligned my business model to reduce expenses as a result of this “analysis”. Now I am faced with 2 realities, listings are down and sales are too. That means Supply is down and Demand is growing. Lets add to this mix a report I heard that new home starts in Denver are down 14%, further indication that Supply is down. Yet we know that in a frenzy of buying activity the Denver market can sustain 35000 single family sales (demand) in any given year.

In order to get an econ class waived as a requirement in college I once said to a college dean that if you could teach a parrot to say “Supply and Demand” you would have an economist. Certainly it is not that easy, but with supply down, and sustainable demand prices at sometime must go up!

NOW for some Highlands Ranch information…

Well even after looking at this data, there is still a hole in my view…where is the news coming from with these record foreclosures? Well, lets report what I know from Land Title…

For the year 2006 in the Castle Rock MLS area the number of sales were up 5.1% and the average sale price was up 13%. Days on the market were also up 28%.

For the year 2006 in the Parker MLS area the number of sales were down 1.4% however the average sale price was up 8%. Days on the market were also up 32%.

For the year 2006 in the Highlands Ranch/Lone Tree MLS area the number of sales were even however the average sale price was up 7%. Days on the market were also up 32%.

I do not know about you, but these numbers are encouraging to me. They also point out the idea of Macro vs. Micro economies. While the market on the north end of the Denver metro area may be taking a beating, the south end seems to be holding up. Imagine what the reports would be if the market was not so good in the south area. We have been blessed but we will continue to help folks sell homes here in Colorado, no matter the circumstance.

And it seems as though, right now would be an excellent time to buy property, while the rest of the world believes the Denver real estate, market is in the tank.

Lone Tree Colorado, Highlands Ranch real estate, Littleton, Castle Rock, Centennial, Englewood, Parker CO, Franktown, Elizabeth, Morrison, Kiowa, Larkspur, and metro Denver Colorado real estate property listings mls (Denver multiple listing service) is available at including searches for properties and homes.

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