Thursday, March 22, 2007

Denver Real Estate re-bound?

Does this make a trend? Only one point of data certainly does not but reviewing the previous year’s new single family listings compared to previous year’s (admittedly, only 5 years of data but 22 of experience) one can see a true reduction in the number of new listings entering the market.
The large spike of "new listings" in 2003 was due to a Denver MLS rule change.

This is really good news for the seller today as it means there are fewer new listings competing with their’s. Unfortunately, it does not mean there are fewer homes on the market, rather the ones that will normally sell fastest are coming on the market at a slower pace.

And ultimately, that is good for prices. The trend I noticed reminds me of a very active market in the spring 3-4 years ago. And part of that was based upon the sales figures, while down, are not in the basement.

As you review these graphs please remember I only track 2 data points and certainly one could track a myriad of them. These 2; Denver Single Family SALES and NEW LISTINGS OF SINGLE FAMILY HOMES should give a good general direction for the market. Sold data is the only true indicator of activity so take note of January & February 2007, both down from the previous year yet up or on par with our market of 2-3 years ago. So far from burying our heads in our hands, we should take advantage of this "depressed" market place and the differential pricing*** it offers.
***When moving up from a 200k home to a 400k home the larger home will have taken a larger discount than the smaller. So, while you might not make as much selling your current home, you make up for it in the purchase of the new home.

Advice? I feel like a broken record but if you look at the past you will see that events such as this last 12 months are always followed by sharp increase in activity (sales) and the number of listings stays down so prices start to climb. If I were thinking of making a move and needed to sell in order to buy, I would do it now. If I was making my first investment in Denver Real Estate now is a great time.

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