A quick visual aid may help you understand what’s really behind the numbers in Denver Real Estate price trends.
Wednesday, 22 October 2008 by Dave
As I posted previously, the numbers are somewhat frightening as market data continues to come in regarding home prices in Denver. I have had the conversation numerous times with both clients and colleagues but as they say, a picture is worth a thousand words.
Perfect timing by my friend Spencer Barron as he sent me an email regarding a cool new mapping tool. He’s doing some research on foreclosures and the true reasons that a borrower decides to stop paying the mortgage. Interesting reading.
Below you’ll see a screen shot from his Denver foreclosures map. The orange dots represent all the lender owned properties on the market in Denver at the moment.
Fun to play around with the full map but the screenshot from above illustrates what I’ve been trying to convey previously with words alone. There are distinct areas in the Denver Real Estate market that have a high number of foreclosures. South West Denver, as well as Montbello, and Green Valley Ranch seem to be the worst of our market. These areas also happen to be the lower priced areas of Denver. When lenders are competing with themselves more often than market ready and conditioned resale listings things can get ugly pretty quickly. Lenders have to sell their REO’s and they will lower their prices to whatever threshold brings a buyer to the closing table.
Combine the high number of foreclosures with the lower priced neighborhoods and a market that has many buyers scared to make a purchase and you’re going to see the number of bank owned, lower priced properties rise as a percentage of overall sales. This would be the root of the downward price adjustments in the average sales price that we’re starting to see in the media.
I will attempt to expand on the idea of price points and market segments in a forthcoming post and provide some real numbers for North West Denver real estate as an example soon. As always, real estate is local. There are pockets in Denver real estate that are actually seeing values rise even now.
