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By Michael Clarkson The Mile High Home Hunter Market Conditions - June 2009
In June, the national unemployment rate reached 9.4%. That is the 2nd highest it's ever been since statistics have been tracked consistently, starting in January 1948. The five most recent highs have been:
1. 10.8% - November and December 1982
2. 9.4% - May 2009
3. 9.0% - May 1975
4. 7.9% - October 1949
5. 7.8% - July 1976, November 1976, July 1980, June 1992
While that is a high number - one which was not expected to be hit, we have come back from similar - and worse - unemployment.
Despite that news, Denver's real estate market was substantially improved over most of the rest of the country. Remembering that 6 months is the tipping point between Seller's markets (below 6 months) and Buyer's markets (above 6 months), here is how Denver is faring:
- Nationwide - 10.2 months of inventory
- Denver - 5.71 months of inventory
Denver's sub-markets by price were the following: - $0- $200k (up to the median price) or 50% of the market - 2.4 months of inventory (strong seller market)
- $200k to $400k (median to the $100k annual qualifier) or 50% to 88% of the market - 5.6 months of inventory (seller market)
- $400k to $1m - 13.8 months of inventory (heavy buyer market)
- $1m and up - 43.3 months of inventory (fuhgeddaboutit! You're holding on to this home for a LONG time)
So, 88% of our addressable market is seller to strong seller market and remaining firm to firming.
Listings are static at 20,734. This has not materially changed since January and has been nearly exactly the same for three straight months. The 5 years' average is 26,366 listings, meaning listings were down 21.4%.
Sold listings were 3,628. Though up from last month, the 5 years' average is 4,702, meaning 22.8% fewer homes were sold. However, this drop in sales appears to somewhat coincide with approximately 2,200 homes under contract for more than one month, which are still yet to close. Including those, the Denver market approaches more historical sales levels. Nevertheless, despite these pending contracts, Denver continues to be a strong market and will be measurably stronger when those close.
As a result of this market strength, prices are moving up. - Median sold price - $220k up from $210k last month
- Average sold price - $262k up from $254.4k last month
- As a result of high end homes listing, but not selling, the average list price was $538k up from $532.5k last month. The lack of high end mortgages precludes them from being sold readily, and increases the risk of higher end foreclosures in the near to intermediate term.
Days on market (DOM) is 105 days, consistent with prior months.
Overall, the market is strong and improving. However, that is still subject to national macro-economic issues and a restricting lending environment.
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." - Churchill
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