NEWS

92 Percent of homes sold priced below $500,000 in the Denver area

Date: Apr. 19th, 2010
Contact: John Rebchook Phone: 303-945-6865
An analysis of Metrolist data by independent broker Gary Bauer shows in the eight-county Denver area, almost 93 percent of the homes sold and closed in the first quarter were priced below $500,000. Metrolist is a Realtor-owned data base that tracks houses they sold in the Denver area.

Overall, the sale of homes priced from zero to $200,000 and those from $200,000 to $500,000, were just about equally divided, with 3,746 sales at $200,000 and below and 43,750 priced between $200,000 to $500,000 Of the 8,121 single-family homes and condos sold and closed in the first three months of the year, , only 628, or about 7.7 percent, were priced at $500,000 or more. Homes priced at $100,000 or below accounted for 12 percent of the market. Those from $100,000 to $200,000 accounted for 34 percent; $200,000 to $300,000, 27 percent; $300,000 to $500,000, 19 percent; $500,000 to $750,000, 5.4 percent; $750,000 to $1 million, 1.2 percent; and $1 million-plus, 1.04 percent.

Lower-priced sales waning

“The biggest change that I see is that in 2008 and 2009, homes priced below $100,000 accounted for a much bigger part of the overall housing market than in 2010,” Bauer said. ”First, there are just not as many homes priced below $100,000 out there. All of the activity is no longer at the low-end. We are seeing mroe activity in the $200,000 to $300,000 range and the $300,000 to $400,000 range.” Although this is the first-time that Bauer has released a first-quarter report using this method, an earlier report he did found that in 2008 15.4 percent of the homes sold and closed in 2008 were priced below $110,000 and through October of 2009, homes priced below $110,000 accounted for about 13 percent of the overall market. In 2007, by contrast, the lower-end homes only accounted for 6.4 percent of the market.

“Where the money is”

Mike Rinner, of the Genesis Group, which tracks housing along the Front Range, said that Bauer’s statistics that show the vast majority of homes being sold are priced under $500,000, reflect todays’ Denver-area market.

“That’s where the money is,” Rinner said. “That is where you can get financing.”

Rinner said that the few new home builders who are building speculative homes – those without buyers – are for the most part targeting the lower end. Indeed, in the Denver area and across the country, builders have been constructing more homes that can take advantage of the tax credits for first-time home buyers, which require a house to be place under contract by April 30 and be closed by June 30.

Buyers also appear to be more cautious than during the headier times of 2006 and 200, and are no longer stretching to qualify for the most expensive home they can qualify for, Rinner said. He noted that he was speaking to a sales person at a new home community, where the houses were priced in the $400,000s. “He told me that buyers were basing their decision on what they could afford on one income,” Rinner said. He said he thinks many couples are making that decision, even if both are currently working. “There is a fear that one person could lose their job,” Rinner said. “I think this is all part of the new frugality.”

He also agreed with Bauer that one reason the lowest priced homes are not as big of a factor today, because there are simply fewer of them on the market.

“It’s demand-driven,” Rinner said. “A year or two ago, the home you could have bought for $75,000, might now be priced at $110,000, because there are so many people bidding for it.”

Case-Shiller a broad brush


Rinner said when looking at national reports, such as Case-Shiller, which shows home prices being flat or slightly up, that does not speak to the market across the board.

“If a market is flat, that means we are actually seeing 5 percent to percent swings at different price strata,” Rinner said. “At the low-end, prices are up 5 percent, 10 percent, or even more from the bottom. At the higher-end, I think we will continue to see more depreciation.”

County $0-$200,000 $200,000-$500,000 $500,000-+ Total
Adams 914 338 12 1264
Arapahoe 900 699 77 1676
Boulder 206 442 150 798
Broomfield 42 95 16 153
Denver 952 735 162 1849
Douglas 146 697 118 961
Elbert 20 37 8 65
Jefferson 564 706 85 1355
Total 3744 3749 628 8121