This Denver home sold for $2.56 million in January.

The Denver-area million-dollar home market started the year on a strong note.

A report released today by the Kentwood Real Estate Co. shows that 39 homes in the Denver area closed in January, a 14.7 percent increase from the 34 in January 2011.

The dollar value was up almost 13 percent to $56. 2 million compared with $49.8 million a year earlier.

Although the number of sales isn’t huge, they are moving in the right direction, noted Carol Ihli, marketing director for Kentwood.

She said that it appears that people putting their luxury homes on the market are still asking too much money when they initially list them.

“The sellers are coming in about 10 percent to 17 percent too high,” Ihli said. “When they sell them, they typically are selling them from 10 percent to 12 percent below their asking price – otherwise they just sit there.”

Let’s make a deal

Despite the disconnect between the buyers and the sellers, deals are being made.

“The buyers and sellers are getting together,” she said. “It appears on the part of buyers there is starting to be some sense of urgency.  They are afraid that new inventory is not going to be hitting the market anytime soon. There is a sense that a lot of people in this price range are not going to put their homes on the market until after the Presidential election.”

Ihli said that the “core” neighborhoods of Denver, from Hilltop to Highland, continue to be stronger than suburban enclaves, such as Cherry Hills Village and Castle Pines.

Rollie Jordan is seeing a lot of activity in Cherry Creek.

“I also think Cherry Creek is really beginning to pop,” she said.

Indeed it is, according to Kentwood broker Rollie Jordan. Jordan closed $7.75 million in deals in Cherry Creek in December and has closed another expensive home in January.

“I think Cherry Creek has definitely come back,” Jordan said.

The $7.75 million tally includes a 12,000-square-foot lot for $1.65 million. “It wasn’t on the market,” but Jordan contacted the owner and got him a deal he couldn’t refuse. “It was the last big corner lot in Cherry Creek.” The buyer was not a developer or builder, but someone who is going to construct a home on the lot for his own use. It probably will be “7,000 to 8,000 square feet and real high quality,” Jordan said.

So far this year, she also has closed a duplex in Cherry Creek for $1.25 million and has a single-family home in the area under contract for just over $1.5 million.

Many of her buyers are in the gas and oil energy. “All my buyers are coming from Houston. I think they are here because of the fracking.” Fracking, slang for hydraulic fracturing, allows oil and gas to be extracted from rock formations by injecting fluids into cracks.

She currently is working with three clients relocating from Houston, many of them interested in living in Cherry Creek or the Denver Country Club.

Ihli said the high-end market, as with the overall market, is facing a dwindling inventory.

There currently are 520 homes for sale in that lofty price range. Of those, 63 are under contract or pending, she said. Some of the pending homes are short sales, in which the lender accepts less than the mortgage.

In January, the average price of a luxury home closed was $1.44 million, down 1.5 percent from the $1.46 million in January 2011. The highest price that sold in January was $2.56 compared with $4.8 million in January 2011, a 46.6 percent drop. The Kentwood report includes the counties of Adams, Arapahoe, Denver, Douglas and Jefferson.

Contact John Rebchook at JRCHOOK@gmail.com

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This Cherry Hills home sold for $8.2 million last year, the highest price paid in the metro area.

The Denver-area luxury market in 2011 was little changed in terms of sales and dollar volume from 2010, but like the overall market, the active inventory of homes priced at least $1 million plunged, according to a report released today.

At the end of last year, there were 566 single-family unsold homes in that price range for sale, a 35 percent drop from the 875 at the end of 2010, shows a report released  by independent broker Gary Bauer.

The number of unsold condominiums on the market fell by 28 percent to 53 from 87.

“The big thing is that for the $1 million-plus market, like every other market, inventory has been reduced dramatically,” said Bauer, who uses Metrolist Inc. data to track sales in an 11-county area.

Some brokers who specialize in high-end homes think that will help boost prices, because typically a smaller supply, combined with demand that is relatively to the same, usually results in higher prices.

“I’m not so sure about rising prices,” Bauer said. “I think the discounts already have been priced into homes Homes on the market are selling for less than they would have in prior years. Sellers are much more realistic in terms of the asking price, and prices have been reduced.”

Dan Polimino, who this week launched a luxury home division at Keller Williams Realty DTC with business partner Gary Lohrman, said nothing in the numbers surprise him.

“In essence, clearly from 2010 to 2011, people bought the existing inventory and nothing new came on the market,” Polimino said. “What this will mean is A, prices will stabilize, and B, dare I say, they will increase. But there are a couple of components to that equation. No. 1, the inventory has to continue to come down and No. 2, demand needs to come up. I’m not so sure that the demand is going to rise.”

Polimino said there are several things making the well-heeled skittish.

First, he said, is the general economy, which faces even more uncertainty because this is a Presidential election year. “Some people are holding back from pulling the trigger, because they want to know who is going to be elected President, first.”

Also, borrowing money at today’s historic low interest rates is a hassle even for the well-heeled, he said.

“There are people out there who have the cash to pay for a home, but they say why would I do that, if I can borrow somebody else’s money at 5 percent? Even though there is more money available for these kind of loans than a couple of years ago, they find with all of the guidelines and documentation involved, it is just ridiculous. It is another barrier and becomes an impairment, so they say, the hell with it. I’ll just wait.”

On the other hand, those qualified to buy a seven-figure home are finding spectacular deals. He said there are homes out there in which the current owner has invested north of $6 million and now it can be purchased in the neighborhood of $3.3 million.

“Anytime you can get a home for 50 percent off, it might be the time to pull the trigger, even it is an election year.”

Buyers paid $763 million for 502 single family homes last year, compared with $773 million for 505 single-family homes in 2010. The average price of a single-family home that sold was unchanged at $1.5 million.

“The sweet spot remains in the $1 million to $1.5 million price range,” Bauer said. “There are still more expensive homes selling, but they are far and few between.”

The most expensive single-family home last year sold for $8.2 million for a 5-bedroom, 12,298-square-foot home in Cherry Hills Village.

Meanwhile, 38 luxury condominiums sold last year, 10 percent more than the 32 in 2010. Sales volume for condos rose 15 percent to $56 million from $49 million, although the average sales price fell by 3 percent to $1.4 million from $1.5 million. The highest price paid for a condo was $2.85 million for a 3,120-square-foot unit.

Bauer’s report includes the counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Gilpin, Jefferson and Park.

In December, there were 39 luxury single-family homes sold, compared with 42 in December 2010. The average sold price in December was $1.5 million, and the median sales price was just under $1.3 million. Of those homes, 10 were in Douglas County, nine were in Boulder and Denver counties, five were in Arapahoe, four were in Jefferson and one in Broomfield and Gilpin counties.

Four luxury condos, all of them in Denver, sold last month, compared with one in December 2010. The average condo sale price was $1.62 million, and the median sales price was $1.575 million.

Contact John Rebchook at JRCHOOK@gmail.com

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Metrolist, the largest MLS, or Multiple Listing Service in the state, is offering Colorado buyers, sellers and brokers an “unrivaled ability” to search for properties and open houses, find local real estate agents and coordinate home buying searches with a broker, the organization said.

The new site offers simple, yet powerful home searching capabilities for Colorado homebuyers, Metrolist said. The search engine incorporates a variety of tools to help in the home buying process, including an aerial-view map search with rooftop accuracy and parcel line overlays, custom searches tailored to regional and market specifics, and enhanced listing information with access to school and neighborhood data. Through the site or a smartphone application, home buyers will have access to:

• Property Alerts – Property alerts notify you when potential properties become available.
• Open Houses – Search for local open houses to tour properties first-hand with turn-by-turn directions.
• Home Valuation – Check out your home’s current estimated value.
• Rentals – A searchable rentals database is coming in early 2012.
• Realtors- Find an agent or office.

“For the first time, Colorado consumers and real estate agents have a real estate search website that truly does it all,” said Metrolist interim Chief Operating Officer Kirby Slunaker. “Whether you’re a homeowner who wants to value your home or you’re a homebuyer looking for the perfect home buying experience, we offer the tools to get the job done.”

Metrolist selected Real Estate Digital, based in Irvine, Calif., to power the new site. Real Estate Digital is a provider of integrated technology, media, and data solutions to the real estate industry.

“Clearly, consumers with independent access to MLS data like listings and open houses are much better informed,” said John Hensley, Chief Product and Technology Officer for Real Estate Digital. “The new will give consumers just that kind of access through Metrolist’s individual brokers and agents. In the end, it’s all about maximizing the consumer experience.”

Metrolist supports the largest network of Realtors in Colorado with the most comprehensive database of real property listings throughout the Front Range. Home sellers planning open houses are encouraged to have their real estate professional to schedule the event in the Denver-based MLS.

“Our new public website allows homebuyers to better coordinate with their local real estate professional using the most detailed and timely housing information, greatly improving on what’s currently available in the marketplace,” said James T. Wanzeck, chair of the Metrolist board.

To check out REColorado.com, please visit this link.

Contact John Rebchook at JRCHOOK@gmail.com

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This 3,112-square-foot home in Lakewood is on the market for $279,900. Realtors say the Denver-area market could use more homes like this, because of the unprecedented drop in inventory.

The inventory of unsold homes on the Denver-area housing market in 2011 experienced the largest percentage drop on record from the highest point to the lowest point in a year, shows an analysis of more than 20 years of data by InsideRealEstateNews.com.

While it has been well-publicized that the inventory levels had been dropping in the Denver area last year, even experts were awed by the huge intra-year drop in 2011.

From the peak of the market in June of last year, when there were 19,573 unsold homes on the market to December when there were only 12,531, the market plunged by 36 percent. The year-over-year inventory drop at the end of 2011 also was a record at 34 percent.

By contrast, in 2010 and 2009, inventory levels fell about 21 percent from the peak to trough in each year. And in 2003, the inventory fell only 12.6 percent, the lowest intra-level drop since at least 1990.

“That is huge,” economist Patty Silverstein, said about last year’s 36 percent inventory drop. “It is really interesting to look at it that way. It really puts it into perspective.”

Surprised? Months supply lower now than in 2006

The low inventory combined with slightly increased sales, has led to less than a four-month supply of homes on the market, which under normal conditions with be considered a solid, seller’s market. By contrast, in the summer of 2006, when it was clearly a seller’s market, there was about a six-month supply of unsold homes on the market.

Yet, while there is anecdotal evidence that prices are rising at lower-price points, clearly prices have not taken off the way they would normally do when the supply is so out-of-balance with the demand.

“There are a lot of metrics we like to monitor, but they don’t tell the usual  story in this unique market,” said Peter Niederman, CEO of Kentwood Real Estate.

“You still have to be cautious. There are still challenges to the economy and challenges to consumer confidence and challenges to the job market. People have to feel good about their jobs before they buy a home. But I do think that our market is better than most places in the country, and will recover faster than most places.”

Silverstein, the chief economist for the Denver Metro Economic Development Corp. and the Metro Denver Chamber of Commerce, said the drop in inventory raises the question whether consumers are simply not selling their homes because they are  unhappy with the offers they are likely to receive in today’s soft housing market, or has there been a sea change in the decline of inventory because so few new homes have been built in recent years?

“My guess it is a little bit of both,” said Silverstein, who also is principal of Development Research Partners in Littleton. “Some folks will begin putting their houses out there again when they can see a bit more appreciation. And we’re starting to reach the point given the organic household formation and in-migration that it might be time that homebuilders start to build some more homes.”

Independent broker Gary Bauer said that he is “100 percent certain” that last year’s inventory drop was the biggest percentage drop ever experienced in the Denver area.

11-year low

Indeed, the last time that there were fewer homes on the market in December was in 2003, when there were 8,820, a time when the Denver-area population was about 20 percent lower than it is today.

“Essentially, this is a good news, bad news story,” Bauer said. The low inventory keeps the pressure on prices, while it also means that consumers have less to choose from and may become discouraged.

A year ago, many in the market were worried that a “shadow market” of bank-owned foreclosures were going to swamp the market in Denver and markets across the country, driving down prices.

That didn’t happen.

“I just read a White Paper that the federal government is looking at putting more short sales, pre-foreclosures and REO (real estate owned, or bank foreclosures) in a rental pool,” Bauer said, which would further reduce the chance of shadow inventory causing a glut of homes hitting the market.

Stephanie Prather, a broker with 8z Real Estate, last week heard of a bank-owned home near Belmar in Lakewood receiving six offers. She had a buyer potentially buying it at around the $165,000 asking price, but the listing broker told Prather that she already had received several offers above that price.

“That home is in absolutely awful condition,” Prather said, although it is in a neighborhood of $240,000 to $250,000.

Prather sells a lot of homes in the $150,000 to $300,000 range, the “sweet spot,” for home sales in the Denver area.

Prospective buyers, especially in that price range, need to change their strategy, she said.

“It’s becoming more of a seller’s market,” in that price range, she said. “Buyers think they can still beat-up sellers when they write offers, but sellers are not cooperating the way they were. The market has not just gone crazy out there, but people, especially below $300,000, are getting multiple offers, and some of them are at the asking price or a little bit above.”

Why wait ’till spring?

The low inventory, however, does create opportunities for seller of homes that are appropriately priced.

Prather convinced one client to put her home on the market at the end of this week, rather than wait for the traditional spring selling season.

“We talked about it, and I suggested we list it now, instead of waiting to the spring when there will be more competition,” Prather said.

Chris Mygatt, president of Coldwell Banker Residential Brokerage, said today’s inventory levels “truly are incredible. They are unprecedented.”

Mygatt said the low inventory is keeping pressure on prices, “but I don’t think it artificial. The low inventory is a real driver of prices.”

However, he is concerned that some prospective buyers, especially first-time buyers, will become discouraged when they can’t find their dream home, and will continue to rent. On the other hand, rising rental rates increasingly will make buying appear attractive, especially with interest rates hovering at or near historic lows, he said.

Sense of urgency

At this point, he thinks the market can absorb quite a few more homes on the market, before it will drive down prices.

“What it is going to do is create a sense of urgency,” something the Denver market has not experienced during the past five years or so. “That’s because as some of the finer properties that are priced right begin to hit the  market, they will be gobbled up quickly.”

Jack O’Connor, principal of the Denver 100 LLC, said that more people aren’t putting their homes on the market because they do not have any equity in them and either can’t, or are unwilling, to bring a check to the closing table.

“I agree with Jack on that,” said Niederman, of Kentwood. “I think a lot of people are just not comfortable yet with being able to sell.”

Still, the extent of last year’s inventory drop is “amazing,” Niederman said.

“I think a lot of parts of the country are still seeing increased inventory, while we are facing one of the largest, if not the largest, declines we have ever seen,” Niederman said.

“I think we just need to be patient right now. Markets are never 100 percent in balance; they always have a certain ebb and flow. The thing is, we do not have enough inventory right now. It might be a good time to put your home on the market. If you are a move-up buyer, you might make a little less than you had hoped for selling your home, but you will more than make it up with the deal you get on the buy side.”

Year	Month with highest inventory	High-point for inventory	December inventory	Percentage drop from high point to low point
1990	June	16,711	11,839	29.1
1991	June	13,669	10,147	25.7
1992	August	12,771	9,631	24.6
1993	August	10,415	7,711	25.9
1994	September	10,630	8,569	19.4
1995	August	11,531	9,854	14.5
1996	August	13,793	11,000	20.2
1997	Augut	14,296	11,093	22.4
1998	July	13,654	10,352	24.2
1999	September	10,310	8,097	21.4
2000	September	10,998	8,820	19.8
2001	October	19,319	16,482	14.7
2002	October	23,769	20,676	12.6
2003	July	26,764	21,623	19.2
2004	June	28,043	20,891	25.5
2005	September	27,200	23,572	13.3
2006	July	31,389	24,534	23.3
2007	August	30,827	24,603	20.2
2008	May	26,333	19,600	25.6
2009	July	20,890	16,456	21.2
2010	July	23,933	18,867	21.2
2011	June	19,580	12,531	36.0

Contact John Rebchook at JRCHOOK@gmail.com

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This 10,072-square-foot, 9-bathroom, 7-bedroom home in Franktown is on the market for $1.5 million, the "sweet spot" for luxury homes in the Denver area.

The number of luxury homes on the Denver-area market have dropped by more than a third in the first 11 months of the year, when compared with the same period in 2010, according to a report released on Tuesday.

“Like every other segment of the market, the inventory of luxury listings is down in double digits,” said Gary Bauer, an independent broker who analyzed sales of homes priced at $1 million or more in the 11-county area.

“In this case, the inventory of residential (single-family homes) are down 34 percent and condos are down 22 percent,” Bauer said.

Bauer’s report shows that there are currently 650 luxury single-family homes on the market, compared with 979 during the same period last year. There are currently 74 condos priced at $1 million or more for sale, compared with 97 in the counties of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, Gilpin, Jefferson and Park. Last Friday, Kentwood Real Estate released a similar report that focused on the core Denver-area counties, and did not include Boulder, Gilpin or Park counties. Both reports were based on Metrolist information.

In the first 11 months of the year, a total of 463 single-family homes sold, the same as last year, while the dollar volume was down 1 percent to $704 million, compared with $712 million in the first 11 months of 2011. The average sales price was unchanged at about $1.5 million.

In the first 11 months of the year, 34 luxury condos traded hands, up 10 percent from the 31 last year. The condo sales volume as $48 million, compared with $46 million last year, a 4 percent increase. The average sales price this year as $1.4 million, down 7 percent from $1.5 million in 2010.

“Prices have been relatively stable,” Bauer said. “The sweet spot of the luxury market now is about $1.5 million.”

Bauer said those paying $1.5 million now, would likely have paid north of $2 million during the peak of the market. Buyers are purchasing them today for less than the replacement cost. That is, if they build them from scratch, it would cost more then $1.5 million.

“I do think with the inventory decreasing, we are going to see continued pressure on prices,” Bauer said.

The highest price paid this year for a single-family home was $8.2 million was a five-bedroom, 12,298-square-foot house. The most paid for a condo was $2.475 million for a three-bedroom, 2,691-square-foot unit.

Contact John Rebchook at JRCHOOK@gmail.com

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Developer Mark Smith sold this home for $2.3 million, far less than what he put into it.

It took most of the year and a 33 percent haircut, but developer Mark Smith has sold his penthouse unit in the heart of Riverfront Park that his company developed in downtown Denver.

Smith, a principal of East West Partners, sold the ultra-modern, two-story home in the Central Platte Valley, with about 4,000-square-feet and sweeping views of Denver’s skyline and mountains for $2.3 million in October. He put the home in the Park Place building that is next to the Millennium Bridge, on the market early in the year for $3.45 million.

While the original asking price was closer to the $3 million or so he put into it when he built it for himself a decade ago, Smith, who also is part of one of the teams competing for the renovation of the nearby Denver Union Station, was philosophical about selling it for a loss.

“I’m a realist,” Smith said. “I’m aware of the market. I’ve been there since Day 1. I bought it to live in, not to maximize my profit.”

The staircase in the two-story penthouse sold by Mark Smith is a focal point.

He notes that he also has a big home in Vail, where he spends a lot of his time, and he no longer needed such a large home in downtown, especially now that his kids are grown and out on their own.

The home, according to public records, was bought by Thomas Coleman and Jennifer Engler.

Buyer get great deal

“I don’t know them, but I think they got a great deal, a fabulous deal,” Smith said. “It is certainly far less than what I had in it – although that doesn’t mean anything, other than I spent too much on it. Sometimes you make money in real estate, sometimes you don’t. Would I like to have tripled my money on it? Sure. That’s not the reality. I lived there for 10 years and had a great time there. How do you put a price-tag on that?”

Kim Norton, a broker with Kentwood City Properties, who previously worked for East West Partners and knows Riverfront like the back of her hand, represented the buyers, who live in Silverthorne.

“We looked extensively at homes in Riverfront, LoDo and LoHi,” Norton said. “It quickly became clear that because they are bringing their two children – the four-legged children – they wanted to be closer to the park. And they wanted to be able to walk to restaurants and sporting events.”

As soon as they walked into Smith’s crib, it felt right.

“They wanted a large project that they could really make their own,” Norton said. “They wanted something very unique, very edgy, very contemporary. They looked at some newer construction, but she said it felt too much like a suburban home. Mark (Smith) really showed off his architectural flair. Everything in it is custom and very sleek. Of course, the new owners will customize it to their own tastes, and I can’t wait to see what they do.”

She said the deal was good for Smith, because he can put this behind him and move on. “And, of course, the buyers think they got just an absolutely fantastic deal.”

Deviree Vallejo, also a broker with Kentwood City Properties, used to live in the nearby One Riverfront building that East West Partners also built.

Vallejo said Smith’s experience is par for the course in today’s market.

“It is kind of the status quo right now,” she said. “Mark, originally listing it at $3.45 million, was setting the bar kind of high. It ultimately came down to what a buyer was willing to pay. No one was willing to pay $3.45 million. One of the problems with having the nicest place in a neighborhood is that there are very few comparables.”

Buyers want to steal homes

Low-ball offers abound at the high end, which is frustrating for sellers, she said.

“They say never buy the most expensive house on the block and you combine that with everyone wants a deal right deal, so it is not surprising it sold for 33 percent less than the original listing price,” Vallejo said.

She said people shopping for high-end homes tend to be savvy business people that are motivated by the mantra of buying low and selling high.

“It is tough, especially selling a home at the high end,” Vallejo said. “Buyers are forcing the sellers to take big haircuts. The truly frustrating thing is that owners are trying to sell homes at what they think is a reasonable, market-rate price, and buyers come in offering 20 percent, 30 percent less – and they think it is a good offer. Really?”

She said she was listing one luxury home and the prospective buyer’s broker told her that her client really liked the home, but getting a great deal trumped buying his dream home.

“Jeez, if you’re going to live there, don’t you want to buy a place you are going to love? Sure enough, he loved my listing but he ended up buying a foreclosure that came on the market in Wash Park. He snapped it up, because it was a great deal.”

As far as Smith, he also owns a piece of dirt bordered by 18th, 17th, Bassett and Little Raven streets, in front of the Glass House, where he could build a big, single-family detached home.

“I’m playing around with I want to do with that lot, if anything, at this time,” Smith said. “I don’t have any specific plans. I did have some plans, but I find my tastes are evolving. It’s such a unique site in the city – the only house next to Commons Park – I want to make sure I am making the absolutely the right choice before I pull the trigger.”

Also, East West Partners owns an adjoining parcel with Crescent Partners, so he said he might see what is built on that site before moving forward on his land.

“I’m renting downtown right now,” Smith said. “I’m taking a breather on owning a place downtown for now.”

To see what else is available for sale in the Riverfront, LoDo area, please visit this COhomefinder.com link.

Contact John Rebchook at JRCHOOK@gmail.com

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Independent broker Gary Bauer, who each month tracks the luxury housing market – which he defines as those selling at $1 million or more (as well as tracking the overall Denver-area market) has sliced the housing market to a level just below the million-dollar cut off.

Today, Bauer released his first “Signature Properties” report, which tracks the sales of homes that closed between $750,000 and $999,999.

While the $1 million-plus market in the first 10 months of 2011 is flat when compared with the same period in 2010, the Signature market is up about 11 percent both in terms of closings and dollar volume.

There have been 550 single-family home sales in the Signature price range this year, representing $465.6 million in sales, compared with 494 for $418.3 million, in the first 10 months of last year.

“When I was going through the data, I noted that quite a few of what I am calling Signature homes had originally been priced at above $1 million, when we were a little closer to the top of the market,” in the 2006-2007 time frame, Bauer said

For the month of October, some 42 homes sold for $35.2 million, compared with 44 in October 2011 for $36.2 million. Last month, the average Signature sold price was $839,115 and the median sold price was $828,900.

Bauer found that 12 of the sales were in Denver, 11 in Douglas County, eight in Arapahoe County, seven in Boulder County, two in Jefferson County, and on each in Adams and Park counties.Bauer based his report on Metrolist data. He said he thinks well-heeled buyers like the idea of buying a $1 million home for $825,000.

“I think there is an advantage to that,” Bauer said.

After all, once the market start to recovers, their dream home could quickly regain the cachet of carrying a 7-figure price tag.

Contact John Rebchook at JRCHOOK@gmail.com

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The Denver-area housing market was the third-best performing of the 20 cities tracked in the Case-Shiller report.

The Denver-area housing market was the third-best performing metropolitan statistical area  tracked by the closely watched S&P/Case-Shiller index released today.

The overal Denver housing market showed a 1.6 percent decrease in August,  less than half the 3.8 composite drop for the 20 major metropolitan areas tracked by Case-Shiller. On a month-to-month basis, Denver tied for fourth place, showing a 0.4 percent gain, the fourth consecutive month showing a gain from the previous month.

However, Peter Niederman, CEO of the Kentwood Real Estate Market,  said “one month does not make a market,” and there can be a lot of fluctuations on a monthly basis, so a year-over-year change is a better indicator of the direction of the market.

And he likes how Denver stacks up to the rest of the country.

“Denver in the top 3? That is pretty darn good,” Neiderman said. “What is encouraging to me is that Denver is consistently in the top quartile on a year-over-year basis. That makes me happy.”

On the other hand, the 1.6 percent drop marks the 14th consecutive year-over-year decline from the same month in the previous year. However, the 1.6 percent drop was the smallest percentage drop in more than a year. The last time the year-over-year percentage drop was smaller was in August 2010, when home prices fell 1.2 percent.

Don’t break out the fireworks

“This is nothing we would set fireworks off for,” Niederman said. “The housing market is still in a funk. But what this tells me is that relative to the rest of the country, Denver is in pretty good shape. I think Denver is poised to continue to out-perform most of the country.”

The only two markets that out-performed Denver on a year-over-year basis were Detroit and Washington, D.C. They also were the only two markets to be in positive territory, showing a gain of 2.7 percent and 0.3 percent, respectively.

“What they are doing in Detroit is pretty dynamic,” said independent Denver Realtor Gary Bauer. “The are bulldozing entire streets and starting from scratch. It is a place that that has no place to go but up.”

Bauer shares Niederman’s enthusiasm for Denver’s showing in the Case-Shiller report.

“It is extremely good news to hear that Denver continues to maintain its position in this particular report,” Bauer said.

Lane Hornung, president, CEO and co-founder of 8z Real Estate, summed up the Case-Shiller report with one word: “Stable.”

Hornung said the Denver-area market is, “Not crashing, not hot…just stable. We will see if the strength in the lower price segments can work their way up to the higher price points.”

Meanwhile, the August report may have put to rest fears from earlier this year that the market was going to re-visit its earlier lows, as a number of other markets did across the country, before bouncing back slightly.

Double-dip, shadow markets haven’t materialized

“The chatter about a double-dip has abated for now, as we are more than 5 percent above our post-peak low set in February 2009,” Hornung pointed out.

Niederman also noted that earlier fears that a “shadow market” of unsold homes held by banks would blanket the market, increasing the unsold inventory and driving down prices, also never materialized.

“Where is this shadow inventory everyone was so concerned about? Instead, the inventory is down 26.5 percent,” he said. “And prices have held steady.”

Earlier this year, Niederman predicted that he expected that 2011 will out-perform 2010 by 3 percent to 5 percent in both closed units and dollar volume. At the end of September, the area was down about 1 percent from the first nine months in 2010, by both measures. Now that the year is drawing to a close, he said he thinks the year-over-year market likely will be closer to 3 percent, barring some global crisis that hammers the housing market in Denver and nationwide.

Bauer said that despite mortgage rates still hovering near historic lows of about 4 percent for a 30-year, fixed-rate loan, he doesn’t expect a stronger than usual fourth quarter, when sales tend to drop for seasonal reasons. He admits, however, he wouldn’t mind being wrong.

“I’d be very happy if people took advantage of these low mortgage rates and affordable prices,” and went on a year-end home-buying spree, “but I don’t think is it going to happen.”

National snapshot

Meanwhile, nationally, there is a “glimmer of hope,” said David M. Blitzer, chairman of the Index Committee at S&P Indices. As Hornung said the for the Denver market, Blitzer also sees the nation’s housing market stabilizing.

“With 16 of 20 cities and both Composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data,” Blitzer said.

“There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,” Blitzer said.  “And even though the annual rates are largely improving, 18 MSAs and both Composites are still negative. Nationally, home prices are still below where they were a year ago. The 10-City Composite is down 3.5% and the 20-City is down 3.8% compared to August 2010.

“In the August data, the good news is continued improvement in the annual rates of change in home prices. In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. As of August 2011, the crisis low for the 10-City Composite was back in April 2009; whereas it was a more recent March 2011 for the 20-City Composite. Both are about 3.9 percent above their relative lows. “The Midwest is one region that really stands out in terms of recent relative strength. Chicago, Detroit and Minneapolis have all posted very sharp monthly increases going back to May. These markets were some of the weakest during the crisis, particularly Detroit. But as of August 2011, Detroit is the healthiest when viewed on an annual basis. Prices there are still back to their 1995 levels, but the recent pickup in the U.S. auto industry may finally be helping.”

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In September, the median-age of Denver’s housing inventory was 46 days, up from 39 days in August. The median-age of inventory is seen by some observers as a proxy for how fast homes are selling.

Denver homebuilder Stephen Holben isn’t surprised by the report.

“Denver is one of the most desirable cities in the country, housing inventory is at an all time seasonal low, interest rates are at an all time low, people are moving to Denver, and the economy is showing sings of growth,” said Holben, owner of Holben Homes. “These all represent the best opportunity to buy a home at any time in history. People who are seeing the current economic circumstances as temporary – and are functioning – are getting some terrific, never to be seen again deals on homes, and will be rewarded when the economy turns around – as it always does.”

Trending the right way

Denver tied with Oakland as having the lowest median age in the country in April, and has been No. 1 ever since.

Independent Gary Bauer said that the string of consecutive months where Denver had the lowest median-aged inventory could be seen as a trend.

“While the Denver market does face tremendous pressures from local, regional and national forces, we, in our own right, shine,” Bauer said. “We do not stand up and puff up our chests to say we are No. 1. We simply continue to do the best job we can for our clients and consumers. It is good to see that we are recognized as such. I hope this is a trend that continues.”

At least one local broker has wondered if Denver has an unfair advantage to other Multiple Listing Services across the country that may not have a “pending” category. The reasoning goes that in other markets, short-sale candidates without a pending category could be listed in the unsold inventory as active, and because it takes them longer to sell on average, in turn those distressed properties  could drive up the median age of the homes in their inventory.

Bauer doesn’t think that is an issue.

“Just about every major MLS in the country has something equivalent to a pending status,” Bauer said. “From the little research I have done on this, I don’t think the pending status would have much impact, if any, on how Denver compares to other markets.
Because Realtor.com analyzes each market using the same methodology, it does provide a fair ranking, he said.

Nationwide, the median age of inventory for listings was 107 days in September, a 3.9 percent increase from the 103 days in August, and unchanged from a year earlier.

The median age of inventory exceeded 120 days in 28 markets.  In previous months, most of these markets had been in resort areas such as Florida or the Carolinas.  However, September ushered in additional MSAs in which the median age of the inventory exceeded 120 in markets in such as:

• Reading, PA (147 days)
•   Santa Fe, (136 days),
•   Mobile, (129)
•   Knoxville, (126 days)
•  Chicago (120 days)

The median age of inventory is not the same as the more common metric of average days on market.

Realtor.com calculates the median days on market by subtracting the listed date from the earlier of their end listing date or the end of the time period, taking the median of all the resulting individual days on the site. This accounts for properties that were withdrawn from a MLS and subsequently re-listed. Because median-age of inventory is based on the days displayed on Realtor.com, it may differ form days on market calculated by the local MLS where the listing is posted. However, it does provide a national comparison using the same methodology for the entire country.

Denver’s list price higher than nation’s

Realtor.com also reported that the median list price in Denver in September was $254,338, compared with the national median price of $190,000.

Denver’s median asking price was down 1.38 percent from September 2010, but up 1.74 percent from August.

Nationally, the median price was up 1.6 percent on a year-over-year basis and up 0.05 percent from August.

The apparent year-over-year stability in median list prices masks the marked decline that began in August 2010 — when the impact of the homeowner tax credit effectively came to an end — and continued through the end of February 2011, according to Realtor.com

While the national median list price rebounded in March and April of 2011, effectively erasing previous declines, it has remained essentially unchanged for the past six months.

The continued stability in the national median list price through the end of the 2011 buying season stands in stark contrast to patterns observed in 2010, when the expiration of the tax credit was accompanied by a precipitous decline in the national median list, the organization noted.

Realtor.com is the most searched real estate website in the nation. It displays more than four million “for sale” and “for rent” property listings fed directly into its site for free by more than 933 MLSs across the country. Denver was the nations’s 22nd most searched area on Realtor.com in September.

Month	Denver Median Age of Inventory	U.S. Median Age of Inventory.
April	44	95
May	39	92
June	30	93
July	32	97
August	39	103
September	46	107

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