Denver's Market

Denver’s housing market shows signs of shift from buyer’s to “normal” market
Posted May 17, 2008 Denver’s real estate market is showing signs of a precipitous shift from a buyer’s market to a “normal” market, according to a newly released report by Jack O’Connor, Managing Broker of Prestige Real Estate Group and a widely read industry analyst. The shift is evident, O’Connor reported May 5, in the continued drop of market-wide inventory to just over 27,000 homes, down from peak levels of 2006; as well as in the market’s supply of homes, now indicated at just over seven months of supply. Traditionally, a buyer’s market is defined by a supply greater than eight months. A seller’s market, one with high demand where sellers have flexibility in pricing their homes, is defined by a supply of less than six months.“What we’re seeing is a return to a normal market in Denver,” said Leeann Iacino, President of Prestige Real Estate Group, in releasing the report. “This is further evidence of the countercyclical performance of Colorado’s market, which went into a post-911 slowdown faster than other national markets, and now appears to be recovering faster, as well.”Iacino added that the data are for the seven-county Denver-Boulder area, which includes portions of northeastern counties that were abnormally affected by foreclosures in the wake of heavy production homebuilding during recent years. “In talking with our own agents, we’re seeing signs of an even stronger turnaround in mid-priced markets of south-central Denver and the south and southwestern metro area,” she added.The report also suggests that a combination of staff reductions in the banking and real estate service industry, along with the challenging mortgage environment, may be causing a backlog of homes headed for closing. Although the number of properties under contract this month is up 6.87% compared to May 2007, year-to-date properties closed through April are lagging behind those posted year-to-date April 2007 by around 1,300 sales, indicating a lag in processing time. “In the past, buyers who could rightfully afford a home could be approved for a loan in less than 14 days,” O’Connor noted in the report. “But lenders’ reduced staffs over the last eight months and the challenges faced in obtaining financing are causing delays of as much as eight weeks.” Iacino noted that national studies are corroborating the indications that Denver is returning to a normal market and has little resemblance to markets seen as “overvalued.” Prestige Real Estate Group serves the entire Denver area and is particularly strong in popular neighborhoods of south Denver, Arapahoe County, Highlands Ranch and Douglas County, with offices in the I-25/Tech Center corridor, Highlands Ranch, Cherry Creek, Castle Pines North, and Conifer/Evergreen