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Foreclosures nip Nov. home sales

Median price falls for single-family homes in metro area

John Rebchook, Rocky Mountain News

Published December 8, 2006 at midnight

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Rising foreclosures as well as typical seasonal forces took their toll on homes sold in the Denver area by Realtors last month.

However, strength in the upper-end market pushed up the average prices of homes and condominiums.

On the other hand, the median, or middle, price of single-family homes fell by $7,600 in November from October and fell $2,000 from November 2005, according to reports based on Metrolist data.

Metrolist is owned by area Realtor groups and represents the vast majority of homes sold each month. The reports were issued by independent broker Gary Bauer and Coldwell Banker.

The median price is less affected by a handful of expensive sales than the average.

"Quite frankly, I thought the average price was going to be pretty stable or even slightly down," Bauer said.

For seasonal reasons, sales will tail off for the rest of this month before picking up in January, he said.

"I think next year is going to be slightly better than this year," Bauer said.

As of last month, a record 17,782 homes were in foreclosure in the Denver area. That is almost equivalent to all the homes in Littleton.

The foreclosures, however, are concentrated in places such as Adams County, north Aurora and northeast Denver.

"I would say that foreclosures are impacting the market," said James Browning, who specializes in selling REO, or real estate-owned homes, that have been acquired by banks after homeowners default on their mortgages.

He said there are homes in Montbello and Green Valley Ranch whose prices have dropped between $20,000 and $40,000 in the past 12 to 18 months.

"These are homes in the $115,000 to $160,000 range," said Browning, a Coldwell Banker broker.

However, lenders aren't selling homes at fire sale prices.

"The banks have taken a stand - they will not give them away," he said. Typically, foreclosures can be purchased at no more than a 10 percent to 15 percent discount to the rest of the market, he said.

Broker Chris Mygatt said that last month the average price of a single-family home rose to $310,562 and the average price of a condo rose to $195,747 because of strength in the super-expensive homes.

"That tells me that the big money is not afraid to put money in Denver real estate," Mygatt said. "When someone is making a $5 million or $10 million or $15 million wager on a home, that is very good news for the local economy. These are very bright, savvy people who won't park $10 million in a home unless they think it is a good investment."

Separately, Zillow.com, which allows people to estimate home values, now is listing homes for sale nationwide for free.

Denver-area real estate broker Peter Niederman launched a similar service, ColoradoMLS.com, six months ago.

"Zillow will be competition, but what they're doing validates our concept," Niederman said. "It may sound funny, but I think what Zillow is doing is actually good news for us."

He said about 15 percent of the homes for sale in the Denver area are being listed for free on Colorado- MLS.com.

Bauer said he thinks the jury is still out on how well that concept will work.

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