Breakdown of Denver housing sales

Share/Bookmark

It won’t be a surprise to any Realtor active in the Denver-area market, but lower-end houses constitute a larger percentage of the overall home sales than in the past.

An analysis of price band sales in the Denver area from 2007 through 2009 by independent broker Gary Bauer, shows that in 2007, homes priced below $110,000 accounted for only 6.42 percent of the market.

In the first 10 months of this year, they account for 13.93 percent of the market, although that is down from the 15.44 percent of the market in all of 2008. Bauer said with 10 months of data, and with only two months left in the year, in which there typically are not a huge amount of sales for seasonal reasons, it is statistically fair to compare 12 months to 10 months of data.

Sales of the lowest-price homes peaked in January of this year, with those priced under $110,000 accounting for 23.28 percent of the market. By comparison, they accounted for 13.48 percent of the market and only 4.85 percent of the market, in January 2008 and January 2007, respectively.

“I really think it started in January, with the tax-credit, which today was just extended,” Bauer said. “Early in the year, a lot of investors were buying low-end homes, fixing and flipping them to first-time buyers.”

But in October of this year, only 8.24 percent of the homes were priced below $110,000, compared to 18.14 percent of all the sales in October 2008. One reason that the lowest price point-point is not as it was a year ago, is because those homes are becoming scarce, as demand from buyers bids up their prices, according to Bauer and other brokers.

And the percentage of more expensive homes sold also are creeping up, so far this year, slightly higher than they were in 2008, but far below their 2008, levels.

But on a month-to-month comparison, the percentage of more expensive homes being sold is more dramatic.

For example, homes priced from $200,000 to $299,999 accounted for 33.34 percent of the market in October, compared with 26.86 percent of the market in October 2008. That is a 24.2 percent increase in the most popular price point for a home in the Denver area. As I reported in an earlier blog, the average price of all homes sold in October was $261,771, and the median price of a single-family home sold and closed last month was $222,000.

If you look at homes priced below $300,000, they account for 44.49 percent of the market so far this year, almost unchanged for the 43.84 percent last year.

But Tom Cryer, a broker with the Kentwood Co., on Thursday told me it is not enough to know where the activity is for the overall market, but also for your neighborhood.

“You have to know where you are buying into the cycle,” Cryer said. “Buying into the $200,000 price range in one neighborhood can have completely different supply and demand ratios than in another neighborhood. That way you can see two houses in two different neighborhood and it is almost like picking a stock. You can compare them and pick the good stock.”

Cryer urged buyers to pressure Realtors to give them concise neighborhood information, so they can make an educated choice based on current data.

“I agree 100 percent,” Bauer said.