Denver Real Estate Market Update

Information courtesy of Jack O'Connor, Re/Max Professionals, LLC.
All data taken from Metrolist, Inc, on September 7, 2009. Denver, Colorado.

Lower priced homes continue to drive our market with a low supply which should lead to some price increases in those price ranges below $250,000.

• Single Family Homes priced from 0-$250,000 have a 3.569 month supply of homes as of September 7, 2009
• Single Family Homes priced from $250,000 to $500,000 have an 8.185 month supply as of September 7, 2009. This price range is starting to shrink slowly.
• Single Family Homes priced from $500,000 to $750,000 have a 19.127 month supply of inventory as of September 7, 2009.
• Single Family Home priced from $750,000 to $1 million have a 30.77 month supply of inventory.
• Single Family Homes priced above $1 million have a 58.269 month supply of inventory as of September 7, 2009.

Remember, a six month supply of inventory typically creates equilibrium between buyers wanting to buy and sellers wanting to sell homes in the Denver market.

The data continues to show an improving but fragile real estate market in Denver, but job insecurity is holding back a rush of buyers into the marketplace. As the inventory continues to decrease and job stability improves, Denver is poised for real estate to improve in value. We are seeing this happen below $250,000 and the next price point of $250,000 to $500,000 is starting to experience a decrease in inventory. It normally takes 6 months to see each $250,000 of price catch up to the market.

The telling sign of the marketplace is that buyers who can buy upper end properties are able to secure a lot of home for an attractive price. Although each area is a little different in what a buyer can buy a million dollar property for, we are experiencing discounts of 25-30% in some cases. Even though upper end priced inventories are decreasing, there are still plenty of great buys above $750,000.

What should sellers do in this market?

• Price per square foot is a number buyers use to determine value. Although this may be a flawed number, make sure you know what your price per square foot is against your competition.
• Why should a buyer buy your home in today’s marketplace? Know the why to create the proper position for your home.
• Be the best conditioned home on the market. The competition is weak against condition, so to differentiate your home, be the best looking.
• Showings increased in August over July. If your home is not getting enough showings, ask your RE/MAX Professionals broker to help you better position your home where the buyers are showing.
• Stage your home for successful positioning.
• Add an incentive to your package, like prepaying HOA dues for a period of time to attract the buyers.
• Add carbon monoxide detectors to your homes vs. waiting for buyers to ask for them.

What should buyers do in this market?

• Become a “cash buyer” meaning have your loan in place to get the best prices. Price should be secondary to the terms a buyer can get.
• Know your options on price and terms and you will be better leveraged and have a more financially secure loan when buying a home.
• Eliminate lots of inclusions into your loan, as lending practices have changed and this could delay your process.
• Ask for a Home Warranty Plan as part of your offer.
• Get a copy of your appraisal before your loan conditions deadline.
• Ask for Carbon Monoxide detectors that are wired into the home as your choice of detectors.