Altos Research Real Estate Insights - Denver real estate market

February 2008 National Housing Market Report

Mike Simonsen — Tue, 12 Feb 2008 12:41:34 -0800

Last week we published the February editition of our National Housing Market report [PDF download]. I was traveling and forgot to add it to the blog, so here it is. We've expanded the coverage this month and added a few more cities ebyond the initial 20 covered by the Case Shiller Index. We'll add a few more important cities in the upcoming versions of the reports too.

Here are the highlights from this month's report.

Listing prices declined in 19 of 22 markets during January. Prices only increased in the New York metro area during January and were flat in Dallas and Phoenix.
The largest monthly decline of 3.6% occurred in San Francisco. Over the three month period, listing prices in San Francisco have fallen by 6.1% from $708,551 to $665,100. The other California markets of Los Angeles and San Diego logged declines of more than 2% for the month of January.
Property inventories declined in most markets except in the Northwestern markets of Seattle and Portland. Inventories tightened sharply in the Midwestern markets of Cleveland and Detroit with decreases of 10.4% and 5.4% respectively during January. Seasonal declines in listing inventories are typical during the winter months.
Markets with the longest time-on-market are Miami and Minneapolis at an average of 144 days-on-market. Miamiâs days-on-market only increased slightly from the previous monthâs 143 days while Minneapolis jumped over 5% from 136 to 144 days. Sixteen of 22 markets had an average days-on-market of over 100.
Denver led all markets with the fastest rate of inventory turnover at 61 days, followed closely by Dallas and San Diego at 80 days. The sharp decrease in Denverâs days-on-market indicator â almost 39% during the past three months â coupled with an inventory reduction of over 11% during the same period, should be a positive for listing prices in the coming spring selling season.

Denver vs. Las Vegas, Phoenix

Scott Sambucci — Thu, 07 Feb 2008 04:59:43 -0800

Over my morning cup of coffee(s.. that is...), I was reading a bit about the Denver real estate market. John Rebchook keeps a blog on the Rocky Mountain News, and wrote yesterday about local prices in Denver and possible collusion to prop up the market. He offered some examples for relativity, including a mention about Las Vegas and Phoenix. For me, the alarms went off - "AltosChart alert! AltosChart alerts!"

Looking at price in these three cities since the Spring, we can see that single-family homes in Denver held very strong throughout 2007 when Phoenix and Las Vegas were getting hammered, until the the fourth quarter, when Denver joined much of the rest of the nation with a strong downward pricing trend.

It's interesting to note though, that early in 2008, there's a bit of an uptick - some relative strength for single-family homes in Denver compared to Las Vegas and Phoenix.

I was interested to see how single-family homes compared to the Townhome/Condo market in Denver. Looks like the Condo market never weakened in 2007 and is even stronger in early 2008.

We're on pins and needles to hear from some of you in the local market as to what the reason might be? Does John's article make a good point, or are things just plain good in Denver?

Denver Housing Market Turning the Corner?

Mike Simonsen — Thu, 06 Dec 2007 08:28:37 -0800

If you've watched the Case Shiller Index numbers this year, you might have noticed that Denver, Colorado is the lone market still registering positive housing price gains for 2007. (BTW: if you prefer Uncle Sam's OFHEO numbers, you'll have just this week discovered that the US housing market is under pressure.)

We've been watching Denver too, because that a market that's been bucking the trend. We recently opened our subscription service for real estate professionals in Denver, as well as home buyers and sellers there.

Here's what the median price looks like for the Denver MSA, in a rolling average over the past several months.

Denver Real Estate Market as of December 2007. Median Home Price rolling average. Single Family Homes.

You can see from the chart, home prices in the Denver area have so far missed the bursting that's hitting most of the rest of the country. Up just fractionally, but steadily this year.

Why the resilience? A couple reasons probably: 1) Colorado real estate didn't have as much upside in the last few years to begin with. 2) The economy and investment levels are still strong. 3) Denver is just a little bit of a laggard economically behind the coastal cities. That implies the burst simply hasn't hit Denver yet.

Looking at the rolling average smooths out weekly noise, so the trend is easier to see. But using a three month rolling average, it'll lag the real-time market a bit. The next chart is the weekly sample.

Denver Median Home Price thru December 2007. Real-time sample. Single Family Homes

In this image we're just starting to see the weeklies break below the 90-day rolling average. Too early to make a big bet, perhaps, but a noticeable change nonetheless.

Plus, if you look at the city of Denver the change is much more pronounced. Zowie! That's quite a drop. (caveat: don't discount the seasonal impact that's surely happening in some capacity here.)

City of Denver median single family home prices.

Keep an eye on Denver. I'll be fascinated to see if that town is able to demonstrate real staying power, or if it's just a few months behind.

Links:

Free research for the Denver housing market

Free research for the Aurora housing market

etc.