Report: Denver area prices heading upward for properties under $250,000
The Denver metropolitan area’s newest inventory numbers, combined with a strong showing of homes that went under contract during January, spell an increasingly optimistic picture for many homeowners, according to a report by Prestige Real Estate Group.
Jack O’Connor, managing broker of Prestige Real Estate Group, in front of newly opened Light Rail bridge at Park Meadows. He issued a report Feb. 5 telling agents to expect price increases that will affect most Denver residential real estate in 2009.
According to the Prestige Monthly Report issued Friday, there were 5,300 Denver area homes under contract as of Feb. 5, up 15% from under-contracts reported after December. The increase, according to the report, stands 6% or 7% above typical January increases. The total represents the second highest under-contract number recorded during the past six years.
“Those suggest that buyers are returning to the Denver market with confidence this year, and that we may see an increase in recorded sales during early spring,” said Jack O’Connor, managing broker of Prestige, and author of the monthly report.
Meanwhile, the report suggests that homeowners in the price range of $250,000 and below are already experiencing price increases, due to the lack of inventory in that lower range. Combined inventory of single-family and multifamily homes in the Denver area stood at 8,816 at the start of the month, which works out to a 3.864-month supply at current rates of absorption. Sellers markets, O’Connor noted, are generally experienced when supply falls below a 4.5-to-6 month supply.
Owners of higher priced homes from $250,000 to $500,000, currently standing at a 6.86-month supply, can expect to see rising prices later in the year. Properties priced higher than that, which are being kept in check by a lack of jumbo market financing, are still very much a buyer’s market situation. “Now is a tremendous time to buy a home above $750,000,” said O’Connor in releasing the report. “Sellers are discounting prices at higher levels, and that makes for a perfect reason for someone with a home priced under $500,000 to make a move up.”
The new activity is very much in keeping with Prestige’s own reports of showings activity. “We’re really pleased by the showings our agents are reporting since the first of the year,” says Leeann Iacino, president of Prestige Real Estate Group, celebrating its tenth anniversary this month.
O’Connor noted that although market analysts have speculated whether the favorable inventory situation could be reversed by a large number of homes coming on the market this spring, inventory climbed only 8% January over December, an increase that in an average year is in the double digits.
Some 260 Prestige Real Estate Group agents serve the Denver area from offices in the I-25/Tech Center corridor, Highlands Ranch, Cherry Creek, Castle Pines North, and Conifer/Evergreen. For a copy of the latest Prestige Monthly Report, contact Jack O’Connor at 303-268-0597; or contact a Prestige broker-agent for complete market information.
