Take a look at what our clients have to say and you will better understand why 95% of our business is referral based.
We recognize that a realtor’s reputation and business success go hand-in-hand. That’s why we treat every transaction as an opportunity to build a relationship and showcase our Integrity, Competency, and Commitment.
--Mark and Lisa Cramer
The Cramer Group at Coldwell Banker
Our analysis shows that the drop in inventory cuts across all price points as well. The absorption rate is the number of months it would take to sell the current housing inventory at the rate at which homes have sold over the past 12 months. For Denver the absorption rate has dropped 56% for homes over $1 million and 51% for homes under $200,000.
Most analysts attribute the decrease to frustrated sellers with expectations that the market cannot meet and to new government regulations on banking foreclosure procedures.
We analyzed 7,000+ sales transactions in Denver from the past 12-months to see which type of seller (builder, government, bank, individual, or relocation) was willing to give the biggest discount off their final asking price to get their home under contract (see graph below).
Government and bank sellers are a bit trickier, because they are not, or perhaps should not, be in the business of selling homes and need to move inventory efficiently. In many cases they underprice homes to create buyer frenzy and force prices closer to market value. Their “drama pricing” skews the numbers to make them appear, at least in this analysis, not as giving as they might be.
Relocation companies that corporations hire to help sell moving employees’ homes are full of good will and much merry! In some cases, certainly not all, relocation companies will make up the loss between what their seller paid for the home and how much a buyer is willing to pay for it. To the home owner, once they are underwater, they don’t care how much of a loss the relocation company will take. There is a limit to how big the spread can be, but usually it’s quite generous. Knowing that they have a second round of negotiations for inspection items, sellers are motivated to pass on a bigger loss to the relocation company on the purchase price in order to avoid having to shell out money for inspection items, a cost that most relocation companies will not cover.
Denver Real Estate Statistics - October 2011
Metrolist released Denver’s October real estate statistics, and as mentioned in previous posts – inventory is down. In fact for the greater Denver metro area, it’s down 33% compared to October 2010. At the same time closed transactions are up 12%.
Our central Denver real estate analysis that includes neighborhoods such as Cherry Creek, Wash Park, Hilltop, and Platt Park shows inventory down 28%. Considering that central Denver has a median price that is almost twice that of the greater metro area, shows that lower priced homes are in shorter supply than more expensive homes. Home under $300,000 in Denver will start to see increasing prices if they are not already.
Pending is a new field that Metrolist recently added, so the increase of 233.6% is a result of poor data capture in the past.
Our Denver real estate market continues to disappear. October’s numbers show a 28% decrease in available inventory compared to October last year for central Denver (Colfax to Hampden and Quebec to Broadway). Sadly, prices remain flat at an average of $423,690 compared to $424,518 a year ago. It appears that buyers are taking their ball and going home as well.
[Denver Business Journal] “Consumers are not putting their Denver homes on the market unless they have a pressing need to sell,” said Gary Bauer of Littleton, an analyst of Metrolist data.
The inventory of listed unsold Denver homes stood at 15,794 in October, down 8 percent from September and 28 percent from October 2010. There were 21,851 homes on the market in October 2010.
“We are moving into new territory with the current level of unsold Denver homes,” Bauer said, noting people aren’t putting homes on the market because of concerns for jobs and the economy.
[Denver Business Journal] Home prices in metro Denver posted a year-over-year decline in August for the 14th consecutive month, but they rose from the previous month for the fourth time in the last five months, according to the latest S&P/Case-Shiller Home Prices Index, released Tuesday.
Denver’s single-family home price performance also bested the average for 20 major U.S. cities covered by the closely-followed monthly report, both for month-over-month and year-over-year changes.
The prices are for resales of stand-alone single-family homes in Denver only, not new construction or condominiums.
Work is also under way on the Kent Place property, Denver real estate’s latest addition, as crews continue clearing and grading the site, constructing retaining walls and installing underground utilities.
Kent Place is the proposed development of the former Denver Seminary site that covers 11.4 acres of land at University and Hampden. The original proposal put forward by developer Continuum Partners was to build 270 to 300 luxury residential condominium units along with about 52,000 square feet of retail and office space.
However, the economy brought about changes to the Denver Real Estate market. The current plan calls for construction of a retail development on half the site and will include a new concept King Soopers specialty grocery and food store as the major tenant. The elevations, along with color and material samples for building that will house the grocery store received Denver city approval.
Denver’s Country Club neighborhood is among the 10 most-searched U.S. neighborhoods, based on search activity for for-sale homes in September at Zillow.com, the online real estate company reported.
Zillow estimates the median value of homes in the Country Club neighborhood at $665,600, which is 244 percent above the estimated median value of $193,500 for homes citywide.
Four of the five most-searched U.S. neighborhoods — and five of the top 10 — are in Portland and Seattle.
View the full report: Top 10 hottest neighborhoods for real estate searches.
Appraisals these days are as anxiety ridden as an appointment with your accountant or dentist. A below-value appraisal will stick with a property for 4-months with an FHA loan application. Here is a strategy for both home sellers and refinancing home owners to relieve some of that anxiety.
The 2,300 page Dodd-Frank Act enacted July, 2010 states, among many other things, that it is a Federal crime for anyone with an interest in financing a home to:
So don’t do any of that; however, you do have the right to ask an appraiser to:
Before the appraisal:
Call the appraiser and ask how many homes he has appraised in the neighborhood in the past 12 months. Tell him that you plan to meet him at the property and that you have additional information to share (the appraiser packet). If you are not satisfied that the appraiser knows your neighborhood, or if the appraiser does not seem receptive to your offer, then ask the lender to assign a new appraiser from the appraiser pool.
On appraisal day:
Make the appraiser’s job easy without being annoying and you will win some reciprocity so you can ask for the favor. The favor you want to ask the appraiser before he leaves is to contact you before he submits the appraisal if his calculations do not support your financing needs. Only 8% of below value appraisals are reconsidered once the paper work is filed. Obviously, you want to make sure that you have a second shot at correcting the appraisal before it is filed. Building rapport with the appraiser will give you that second shot.Homes Sold: 1753
Average Days on Market: 107
Median Days on Market: 67
Most Expensive: $5,700,000
Least Expensive: $74,450
Months of Inventory: 6
| Original Price | Final Price | Sold Price | Net Sold | |
| Average | $527,496 | $498,197 | $473,471 | $471,705 |
| Median | $400,000 | $387,000 | $370,100 | $369,150 |
| Avg Price / SqFt w/o Basement | $287 | $272 | $258 | $257 |
| Avg Price / Fin SqFt w/ Basement | $218 | $206 | $196 | $195 |
The Cramer Group had their annual client appreciation party at the Denver Chop House recently. We’ve posted pictures from the event and the Shutterbooth photo booth on our new Facebook Page, and we hope you’ll check in and click on the “like” button. If you were at the party and would like a higher resolution photo of any of the pictures, let us know and we’ll email them to you.
Central Denver Housing Prices
Based on data that we gathered from Metrolist we graphed the annual percentage growth in Central Denver from 2000 to 2011. Central Denver is defined as Colfax to Hampden and Quebec to Broadway (Congress Park, Wash Park, Hilltop, Cherry Creek, etc.). This area includes such neighborhoods as Park Hill, Hill Top, Congress Park, Wash Park, and Cherry Creek. We used 2000 as our baseline.
Today we are up 45.22% over 2000 prices, or a compounded annual rate of return of about 3.6%. Of course if you purchased at the height of the market in 2007 at the average central Denver price of $487,000 and sold this year, you would need to cover a 9% or $48,656 spread.
You will also notice that in 2010 prices ticked up slightly and then dropped back down to 2009 prices in 2011. We attribute this to the government’s now expired home-buyer tax incentives. Nothing of substance has changed in comparison to the previous two years. We continue to bounce along the bottom. So, no need to get out your rifles, beans, water filters and duct-tape; the world has not come to an end.
We looked at the difference between the last list price and the final contract price on homes sold in Denver, Cherry Hills Village, and Greenwood Village over the past twelve months by price point. The graph below shows what we found as a percentage difference.
As you can see, on average buyers purchasing a home between $400,000 and $600,000 were able to negotiate their final price down by only 3.91% from the last offered price. Between $1.0 and $1.2 million, however, buyers were able to negotiate down a whopping 9.93%. Luxury home buyers have 150% more negotiating power than lower end home buyers.
You probably noticed that the negotiating power for buyers is slightly higher in the first two columns than the third. We took a closer look at the data and found that quite a few of the properties in the first two price ranges, especially between $0 and $200,000, were real dogs. Sellers have a tougher time negotiating a price on properties listed as “uninhabitable”, “possible mold”, or “as is”.
You can see from these numbers that a luxury seller who drops their price $50,000 has not really enticed a new pool of buyers much. $50,000 is about half of what an interested buyer would negotiate down anyway. On the other end, a buyer who expects to purchase a $400,000 home for $360,000 will on average find it frustrating to come to agreement with a seller.
Of course every deal is different and each has to be given its own consideration, but having a sense of the numbers is essential to getting what you want. If you or someone you know would like to purchase or sell a home, we would be grateful for the opportunity to put our knowledge to work.
The luxury real estate market, homes over $1 million, has had a rough deal from the deck for the past three years both nationally and here in Denver. While inventory remains high and prices continue to drop, some luxury homes still manage to sell (see our sale of the Phipps’ home in Belcaro).
Here is a review of the market for the past twelve months for the combined area of Denver, Cherry Hills Village, and Greenwood Village (see these markets individually).
Sold: 215 grateful sellers have come up aces and successfully sold their homes. Over 60% of those sold were less than $1.5 million (see chart). The average reduction from the original list price to the final contract price was 21.5%. The number of luxury homes sold has edged up slightly to 217 from 205 the previous year.
About to sell: Currently 20 anxious luxury sellers are under contract awaiting their closing day, a happy day that may rival their wedding day or the birth of a child. Another 5 homes have contracts that require bank approval before they are fully executed as part of a short sale or foreclosure.
Not selling: Another 260 sellers are keeping the faith as they continue to market their homes. The average days on market for these faithful is 290 days — the market average under a million dollars is 149 days, or almost half. The most expensive home listed in MLS, 5000 E Quincy Avenue in Cherry Hills Village, is listed for a mere $18,900,000.
The market has 14.5 months of inventory available; meaning that if no other luxury homes come on the market and luxury homes continue to sell at their current rate, it would take 14.5 months to sell all of them.
Given up: 268 sellers have folded and withdrawn their listings from the market. If you consider the first two categories above (sold and about to sell) as “successful ventures”, and the second two (not selling and given up) as “failed ventures”, then your probability of selling a luxury home is 1 out of every 3.19 listed.
If you or someone you know is thinking about selling a luxury home, knowing the reality of the market is essential to beating the odds. Feel free to forward this article on to friends and family and don’t hesitate to send us an email. We appreciate your continued support and referrals.
