If you've been waiting for the market to bottom out in Denver before buying, the time has come to invest in your new home. Average prices for single family homes fell 2.71% from March to April. Compared with 2007, average home prices have fallen 17.13%, a much needed correction in the Denver market which was still hyperinflated from double-digit growth in the 1990s. The market seems to have bottomed out and presents a grand opportunity for buyers looking to buy in Denver this spring and summer.
In April the median price of a Denver single-family home was $222,550, down from $224,900 in March, a decrease of 1.04%. The average price declined 2.7% from March's $274,693 to $267,259 in April. Condos and townhomes fared better. The median price was $134,500, up from $132,000 in March. The number of homes sold in April is up 15% over March this year, and the average days on market before continues to decline from last year this time by 3.16%, indicating a more active market this year than in 2007.
A question asked by many of my buyers is "If I buy now, what about declining values? Will my home be worth less when it comes time to sell it?" The answer varies depending on how long you stay in your new home.
On average buyers stay in their homes about 5 years before selling according to independent real estate broker, Gary Bauer (Bauer issues a monthly market report used by the Denver dailies) is widely regarded in Denver real estate circles as a market expert. In a report in the Rocky Mountain News by Rob Reuteman (4/19/08), Bauer is quoted on the issue. He says, "If I bought my home a year ago for $200,000, and I had to sell for $180,000, I'd be upset. If I'm staying in the Denver market I take $180,000 and buy a house that would have cost me $200,000 a year ago. But I'd still have a little feeling that I really didn't do so well. If I were that individual five years ago, my average appreciation would be 39 percent. Would I be concerned about a 10 percent drop in price today? I don't think so. I would have bought it for $130,000 and sold it for $180,000."
The Denver Post has updated their very useful interactive map of home values across the metro area. Check out http://www.denverpost.com/ci_6797508. You'll be able to look at values by neighborhood, discover whether values are rising or declining and much more.
Interest rates are still low (conventional loans were at 6.000% for well-qualified buyers as of May 13, 2008, from our preferred lender, Rate One, The Mortgage People). Housing supply is as high as it's been in awhile at 26,171. Homes are more affordable. Denver's economy is steady and jobs are expected to increase this year. The metro Denver unemployment rate in March was 4.4% (3.7% for the state), .7 percent lower than the national rate of 5.1%. 22,000 new jobs are expected in Colorado in 2008, and foreclosures are expected to drop by about 9% according to Patty Silverstein, Chief Economist for the Metro Denver Development Corporation.
New home builders, faced with a sizeable inventory of unsold homes in early 2007, have pared the excess to virtually nothing. In the 4th quarter of 2007 starts of single family new homes and condos dropped to 1,611, the "lowest quarterly starts in the seven years that Metrostudy has gathered information for the metro area" according to the Rocky Mountain News ("Metro new-home sales, starts "worst in 20 years", February 7, 2008).
The Denver market is not in the same situation as many cities. We're still riding out the effects of the mortgage crisis which led to so many foreclosures, but values haven't dropped nearly as much as the rest of the country. Values dropped about 2% in 2007 and are expected to drop another 3% overall in 2008. Contrast that with Orange County, California (suburban Los Angeles) which dropped 10.2% or Boston a 13.3% drop.
Many parts of the country have suffered a double whammy with the real estate bubble bursting together with the number of foreclosures rising which put a downward push on prices. Denver's bubble burst in 2001, but values remained steady until 2007 when they began to drop. 2006 values increased an average of 2.7%, while values at the end of 2007 had dropped by 2%, a difference of 4.7%.
Denver's cost of living makes it an easy choice over higher cost areas like both coasts. According to CNNMoney.com it costs 57% less to live in Denver than in San Jose; 53% less than in San Diego; 61% less than in San Francisco; and 20% less than Seattle. If you live in the east, it will cost 51% less than in Washington, D.C.; 36% less than in Boston; 72% less than in New York; 26% less than in Philadelphia.
For buyers coming from the south and the midwest, Denver could cost more. It costs 14% more in Denver than in Atlanta; 49% more than in Houston; 41% more than in Dallas; 29% more than in Dayton, Ohio; 22% more than in Rochester, MN, and 23% more than in Boise. But living in Denver still costs 17% less than in Chicago, 16% percent less than in Portland, and a whopping 56% less than in Los Angeles..
You'll need to do your due diligence to compare cost of living between your city and Denver at websites like http://www.bestplaces.net, http://www.bankrate.com/brm/movecalc.asp, or http://cgi.money.cnn.com/tools/costofliving/costofliving.html.
Having an Exclusive Buyers Agent to find the best buys will shore up your buying ability by representing your best interests - finding the best home at the lowest possible price, and saving you time and hassles. See client references at http://www.buyers-advantage.net/references.html Phone numbers available upon request. Call Judith Clausen now at 303-587-3509 to help you find your next house.
Approximate Location Boundaries: Denver Metro Area
Location Characteristics: Denver's an exciting place to live. Winter, summer, spring or fall -- there's always something special to do in the Denver area. Cultural amenities include the Denver Center for the Performing Arts which houses the Colorado Ballet, the Denver Symphony, and the Denver Center Theater. Art galleries, the Denver Museum of Science and Nature, over 90 golf courses, sophisticated shopping centers, the Denver Zoo -- the list goes on and on. Denver is a large urban area close at hand to some of the most beautiful country in the U.S. Ski areas are just hours away. Fly fishing, hiking, mountain climbing and much more offer spring, summer and fall recreation in the nearby Rocky Mountains. Quality of life in the Denver area is its biggest draw.
About Judith Clausen, Broker/Owner:
I represent Buyers only. My hallmark in assisting buyers is to provide timely, energetic and honest service. Check out my website at www.Buyers-Advantage.net for client feedback. When asked to fill out a Customer Satisfaction Survey one recent client, "I'll give you all tens because you're worth it!!"
If you're planning to buy in the next six months go to my website (www.Buyers-Advantage.net) and click on Home Search to look for homes in the Denver area. You can save your searches, and return as often as you want. And I'm always available to answer any of your real estate questions. Just email me at Judith@Buyers-Advantage.net or call direct at 303-587-3509.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
