Metro home prices drop 2%

Year-over-year slump apparently Denver area's first

By John Rebchook, Rocky Mountain News (Contact)

Published January 9, 2008 at 12:05 a.m.

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The average price of a previously owned single-family home in the Denver area fell 2 percent last year, apparently the first time the area has seen a year- over-year decline.

The median price also suffered the first year-over-year decline.

The year-over-year price slump started with condos in 2006 and spread to single-family homes last year, as record foreclosures and tightening credit continued to squeeze the market.

"Yes, pricing is down on residential," said Gary Bauer, one of several people to complete a report on Tuesday based on Metrolist data. "But if you look at the tremendous numbers of foreclosures, the tightening credit and what is happening in other markets with really big problems, I'm very happy."

The total sales volume of both single-family homes and condos fell last year to $14.03 billion, a drop of $485 million from 2006, the biggest dollar decline ever.

The first time that sales volume nosedived from the previous year was in 2006, when the market experienced a $424 million drop, to $14.516 billion from $14.94 billion in 2005.

Although the average price of a single-family home sold last year fell 2.1 percent to $310,416 from $317,112, that actually was a strong performance, relative to many other cities. Previous hot markets suffered double-digit losses.

The median, or middle, price of a single-family home in the Denver area fell by just under 2 percent, to $245,000, for all of 2007, compared with $249,900 during all of 2006.

"Quite frankly, I continue to be very happy with what I see here," Bauer said. "We saw about the same number of properties closed and under contracts last year."

Sales and prices will be lower in January and February this year, Bauer said, unless 30-year, fixed-rate mortgage rates stay below 6 percent for a sustained period.

In recent weeks, rates have fallen briefly below 6 percent but then have risen quickly.

The market for homes priced at more than $1 million had been strong during the past couple of years and the first half of 2007, but sales for expensive properties began to slow in the fall, according to data from Coldwell Banker Colorado.

There are 1,759 single-family homes priced at $1 million or more on the market, according to broker Jim Nussbaum's Kentwood Co. office.

"Buyers are more picky," Nussbaum said. "You can't be sloppy in your pricing."

Ed Jalowsky, who recently launched Hottest Homes Realty, said the market is the best buying opportunity he has ever seen.

"If you're a buyer, you're not in the captain's seat, you're in the admiral's seat," Jalowsky said.

Jalowsky said he is getting ready to list a home in the Crestmoor neighborhood in east Denver for about $480,000. The home had sold in 2006 for $569,000, he said.

Beverly Meade, a broker with RE/MAX Avenues, saw a condo near Lowry with structural damage advertised for $11,000.

"I called the listing agent because I thought it was a typo," Meade said. The agent assured her the price was $11,000. She saw another foreclosed home near Sloan's Lake advertised at $39,000, which last month sold for $43,000, or about $57 per square foot.

"If you have money, it is a good time to buy," Meade said. "If you are in foreclosure, you are not in a position to benefit from today's market. This market is not unlike the late '80s in Denver. It's a trippy time. There are some amazing deals out there."

rebchookj@RockyMountainNews.com or 303-954-5207

• January 9, 2008

  7:38 a.m.

  Suggest removal

  burningspleen writes:

  Denver home prices are grim. Appreciation is competing with inflation. Gary Bauer’s optimism together with the article is misleading because it does not address the plight facing Denver’s home owners. Pointing out that Denver is doing better than the worse performing markets is a bizarre interpretation of the data. The Denver market is weak and will remain stagnant for many years.

• January 9, 2008

  9:01 a.m.

  Suggest removal

  WarrenJimmyBuffett writes:

  Denver's foreclosures have skyrocketed in the face of overbuilding and easy credit (mortgage debt bubble). A 2% fall is just the beginning, not the end. Pain for housing owners and the economy will accelerate over the next few years as the reprecussions of these foreclosures and the bursting of the mortgage debt bubble sweep over Denver (and the nation). The results are inevitable. Those who were prudent will be okay. Those who foolishly used ARMs for one or multiple houses or spent home equity like drunk sailor will be destroyed.

• January 9, 2008

  9:12 a.m.

  Suggest removal

  Wildjavelina writes:

  Here's another take: housing is becoming more affordable! And, I gotta agree with SASQUATCH...the 2% pales in comparison to the run up. The folks that are going to be burned are the ones that want to, or have to, sell now and sell fast. I love my house and plan to stay in it for a long while. I really don't care what it's worth because it's my home and not an investment.

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