Michael Welk

Take a look at the first page, for AUN (Aurora North). Note these positive market trends this year:
- number of active listings steadily declining
- average list price pretty stable (finally!)
- U/C up dramatically
- Number of sales / month up (partially seasonality)
- DOM dropping
- Stability in average sold prices and sold price as % of list
- Sold price as % original price UP a lot - banks are getting better at pricing
- Number of expired listings down

Every indicator is improving this year in AUN. You will see the same trends in DSW (southwest Denver County), but not as marked an improvement as AUN.

By contrast look at DSE (southeast Denver County).
- listings are up (they should be - seasonality)
- Note the average list price ($758,000) is a lot higher than the average sold price ($418,000). Lots of expensive listings brining up the average ask price, but apparently they are not selling
- DOM (Days on Market) declining as it normally would due to seasonality
- Average price declining rather rapidly. Probably a mix issue - smaller, cheaper homes are probably selling better.

Since these homes in DSE are pricier, it has more of an effect on the "average" sales price on metro Denver. Oddly, we could see improvement led by the cheapo neighborhoods, with the lux neighborhoods falling behind for a while. It will be interesting to watch.

(C) Copyright 2008 Your Castle Real Estate

Recap of First Half 2008 Condo Price Performance

By Mike Welk and Lon Welsh, Your Castle Real Estate.

The takeaway for your clients: If they want a move in ready condition unit, many of the foreclosures are not going to be appealing. The units they will like will most likely be non-foreclosures. Since they are still going up a bit in price, there is no reason to sit on the fence and wait - buy now to take advantage of the opportunities in the market!

The average condo price in Metro Denver declined 4% between 2006 and 2007: from $187K to $180K. Homes dropped 3% in that time period. Looking just at the first six months of 2008 vs. the same time period in 2007, the price dropped 5%: from $181K to $172K. Homes dropped 10% in that time period. From their peak prices in 2006, condos have dropped around 9.5% while homes have dropped 12%. It looks as thought the condos fell harder at first, but have stabilized a bit, while the homes suffered more in recent months. These numbers will be slightly different than Metrolist, as they are just Denver Metro and don't include outlying areas like Fort Collins, Colorado Springs, or Boulder.

Some areas did better than others. The attached chart shows different neighborhoods in our region. Each region has the neighborhood's name and the percentage of sales in the last twelve months that were either short sales or bank-owned properties. The second line has the price change the twelve months from July 2007 to June 2008 vs. the twelve months immediately preceding. Next, you'll see the average condo price in the last twelve months and the average days on market (DOM) in the last twelve months. There had to be at least twenty sales in the last year for an area to be included. The numbers are more reliable in areas where there were more sales.

The good news is the last four times the market had a change from a buyers market to a sellers market, or vice versa, it was preceded by a change in the DOM. Condo DOM peaked in 2006 at 120 days. It dropped to 115 days in 2007, and so far this year (through June) it's at 102. The home market turned the corner on marketing times just in the last six months or so. It appears that the condo market might pull out of the doldrums a little bit ahead of the homes.

The average price of a foreclosure condo dropped -6% to $105K in the first half of 2008. The average price of a non-distress sale increased 6% to $224K. Sales volume was down for condos in the first half of 2008 versus the first half of 2007. Foreclosure and short sale volume is up (estimated +19%) and non-distress seller volume (estimated -28%) is down. The 4% drop in prices this year is completely driven by the fact that more banks are dumping condos at low prices, which is driving down the average price. Non-distress condos - generally in good condition - are continuing to go up modestly in value.

Source: Your Castle Real Estate analysis, MLS data

Question or need more detail? Call Michael Welk at 303 263-3217 or mwelk@YourCastle.org