Is 2012 The Beginning of a  Denver housing recovery?

I can remember back in 2005 when sales began to slow and prices stabilized then began to decrease. I could tell within 60 days that the market had changed and that we were in a downturn. I had no idea how deep and long it would be, but I knew something had changed. I get the distinct feeling that the real estate market is beginning to change again and this time for the better.

Home prices in Denver may increase but not the number of sales.

Our market is as simple as supply and demand. In recent months the number of homes and condos for sale has drastically decreased. One reports shows homes inventory in the Denver area is down 37% from last year for single family homes while condo inventor has decreased 50%. In addition to a decrease in inventory, there has been an increase in pending sales. I have had several clients in multiple-offer situations on homes already this year. Even crazier has been that the clients bid above the asking price on those homes and still came up short compared to other offers.

Interest Rates Remain Low on Denver Mortgages.

Another factor in our housing market has been low mortgage rates. I have seen buyers lock on 30 year loans below 4% on fixed rate mortgages. As rents continue to increase and mortgage rates stay low, it will continue to create demand on housing. For most people it is less expensive to buy a home than rent. I believe that when we begin to see a slight increase in mortgage rates there will be an even larger surge of people wanting to buy before rates get any higher.

Consumer Confidence and Jobs are beginning to help.

When people feel better about their future and the economy as a whole, they are more likely to make large purchases and decisions like buying a home. I think most of us are hesitant to say things are getting better but there is at least a sense that things aren’t getting worse. Even Fox News is optimistic on Denver’s Housing Market.

I understand that many of these reasons for an optimistic outlook are anecdotal. In 2005 I could not prove to anyone what was about to happen but I knew it in my bones. I feel the same way in my gut about 2012 being a turning point for the good. We will not know for sure until 2013.

Existing Home Sales In Highlands Ranch Increase 50% Over First Two Months of 2009

Great news for Real Estate in Highlands Ranch and Lone Tree so far this year.  In 2009 there were 110 closed sales from January to February. So far in January and February we have had 167 closed sales in the same time frame according to information in Metrolist. ( A Multiple Listing Service – MLS in the Denver Metro Area )  There are several factors that have contributed to the rapid increase in closed sales. The historically low interest rates combined with government incentives for first time home buyers and move up buyers has helped people get off the fence and into a home.  We have also had a relatively mild winter as far as snow goes which makes it easy for us to get out and look at homes.

The Average Sale Price Increased 8.9% over February 2009

Not only were there more sales in the area, but the average sale price also had an upward trend.  In 2010 the average sale price was $334,635 compared to  $307,185 in February of 2009.  One month does not make up a whole year but I for one hope that the trend continues in this direction.

Highlands Ranch and Lone Tree Condos and Townhome Sales Increase while Values Drop

The condo and townhome market is also beginning to rebound in the local market.  The number of sales Year to date through February 2010 was up 22% over the same period in 2009.  I believe that the condo and townhome market will continue to gain strength overall through the next decade.  Some national companies that follow these trends see a shift away from large homes in suburbs to smaller efficient housing closer to transportation and other conveniences.  I have personally noticed increased interest in properties close to RTD Light Rail and Bus Routes.  People are paying more attention to things like walk scores and ease of maintenance.

Unfortunately the values of condos and townhomes in Highlands Ranch and Lone Tree dropped from $251,730 in February 2009 to $222,006 in February 2010.  That is a decrease of 11.8% in value.  Hopefully this trend will reverse itself over the rest of the year.

Here is the full report from my friend Jim Renshaw at Land Title.

Highlands Ranch and Lone Tree Market Statistics February 2010