Real Estate Term of the Day: Buyer’s Market
BUYER’S MARKET – a situation where buyers have a wide choice of properties and may negotiate lower prices. Often caused by over building, local population decreases, or economic slump (Barron’s Dictionary of Real Estate Terms)
Is Metro Denver’s real estate market considered a buyer’s market? In my professional opinion, I believe our current market shows more traits of a balanced market rather than a true definition of a buyer’s market (especially at the lower price points, i.e. under $300,000). My opinion is based on these of key factors that shape our real estate market in Metro Denver:
- Building – According to Peter Niederman CEO of The Kentwood Company, “We did not really see the boom and we have not really seen the bust, compared with other cities,” Niederman said. “And we didn’t become hugely overbuilt with new homes like other markets. I’ve been talking to major home builders in the Denver area and they have been, and are continuing to be, very responsible. They are building to demand. They don’t have a lot of spec homes on the market.” *
- Population – Metro Denver has a population of 2.8 million people, and has a growth rate that has consistently outpaced the national rate every decade since the 1930s. The region grew steadily in the past 10 years. And by 2030, Metro Denver’s population is anticipated to increase to almost 3.8 million.**
- Foreclosure Rate – The total count of Metro Denver foreclosures reported through the first 11 months of the year was 28.8 percent lower than the count reported for the same months in 2010.**
- Building Permits – Total issuance of detached home permits was up 3.8 percent year-to-date in November 2011, issuance of permits for condominiums and town homes was up 8.9 percent.**
- Housing Inventory – Based on the December 2011 market stats for Metro Denver published by Metrolist, the YTD-Year To Date (December 2010 vs December 2011) number of active single family homes listed at the end of the month decreased 36.5% to 8,854. Furthermore, the number of active condo/town homes listed at the end of the month decreased 50.4% to 2,139.
- Average Sales Price – The December 2011 market stats for Metro Denver published by Metrolist, shows that the YTD (December 2010 vs December 2011) average sales price for single family homes slightly decreased .8% from $282,080 to $279,230. Whereas, the average sales price for condo/town homes slightly decreased 1.2% from $161,005 to $159,141. In fact for the past 6 month’s YTD data, the lowest decrease in average sales price for single family homes was .9% from $282,717 to $280,230 (November 2010 vs November 2011). While the lowest decrease for the past 6 month’s YTD data shows the average sales price for condo/town homes decreased 2.7% from $162,012 to $157,697 (June 2010 vs June 2011).
Additionally, OwnAmerica.com CEO Greg Rand cited Denver as the place to invest in housing, due to the area’s quality of life, young and educated residents, and high in-migration patterns.”**
See also: The #1 Question I Was Asked Over the Holidays… to find out how you can take advantage of this opportunistic real estate market in Metro Denver.
*Source: Inside Real Estate News