Fewer homes on market, but sales up

By John Rebchook, Rocky Mountain News (Contact)
Published October 8, 2008 at 12:05 a.m.

It's as if the Denver-area housing market has gone back in time.
The number of unsold homes on the market in September dropped to the lowest level since December 2005 and the number of homes placed under contract jumped almost 22 percent from September 2007, the best September for sales in three years.
The average and median sale prices of homes, meanwhile, have fallen back to 2002 levels.
That doesn't mean that if you bought a home six years ago you can't sell your home for a profit.
"It's the mix of homes," that resulted in the median price of a single-family home falling 11.6 percent to $216,150, and the average price falling 14.8 percent to $260,118 from a year earlier, said Gary Bauer. Bauer, an independent broker, released one of three reports on Tuesday that analyzed data from Metrolist.
But if you bought a home in 2002, and you can afford the mortgage and you have no compelling reason to move, you probably won't put your house on the market, competing with foreclosures and otherwise distressed homes.
"People are afraid to put their homes on the market and are going to wait until next year," said Jim Levy, of RE/MAX Classic.
Levy said the southeast area, including Highlands Ranch and Castle Rock, is not experiencing the pain of cities with large pockets of foreclosures, such as Aurora. And Denver's housing market is in far better shape than almost every other U.S. city, he said.
But the reluctance of move-up buyers to sell leaves more lower- priced homes on the market, driving down the average and median prices.
"I don't think you can paint a very rosy picture for the market," said Jason Miller, managing director of Realty Source Financial. "We'll be seeing job losses sooner, rather than later. And when you have no equity in your home and you lose your job, that is a recipe for a foreclosure."
Miller said the lower end of the market may have hit bottom because there are so many investors shopping in that price range.
"There are homes in Montbello that had sold for $190,000 and are now selling at $75,000 or $80,000, and as rentals, they will cash flow," Miller said.
With the credit crisis, it is almost impossible for custom builders to get permanent financing for ultra-expensive spec homes, which means more foreclosures are on the horizon at the upper end, Miller said.
Still, Bauer said he was surprised so many homes were placed under contract in September: 5,269 or 21.7 percent more than 4,329 in September 2007. He said he doesn't expect the trend to extend into fall and winter, and because homes sold then to be lower-priced, he thinks a large percentage won't make it to closing.