Denver's home-resale market shows signs of life

Metro Denver home prices and sales continued to slide last year, according to real estate statistics released Wednesday.

But Denver's home-resale market also showed signs of finding its balance, with the supply of unsold homes falling sharply and homes selling a little faster.

"Right now, things are still kind of fuzzy, but as we watch the numbers start to unfold in the first quarter, I think the picture will become clearer," said Mike Cox, a real estate agent with Re/Max in Highlands Ranch.

Cox said he is hopeful that last year's 20.3 percent decrease in the inventory of unsold homes will be met by increased demand from buyers lured by lower prices and mortgage rates.

Median single-family home prices rose between November and December, from $195,000 to $196,000, but remain down from the median price of $220,000 in December 2007. Median condo prices in December were $125,000, down from $130,000 in November and $140,000 in December 2007.

The type of properties sold influences the median price of resale homes. In a weak market, fewer expensive homes tend to get listed, while foreclosures make lower-priced homes a bigger part of the mix, driving prices down.

That said, independent real estate analyst Gary Bauer estimates that distressed home sales became less of an issue as the year went on.

Counts from the Colorado Division of Housing indicate that foreclosures are leveling off this year and may actually decline from 2007.

What became more of an issue in the fourth quarter were the difficulties buyers faced in obtaining mortgages after the investment bank Lehman Brothers collapsed in September. "We had a lot of deals fall through because of the financing," said Bauer.

Financing difficulties help explain why the number of closings fell 3.9 percent last year despite a 1.6 percent increase in the number of homes put under contract.

Buyers were willing, but their financing was weak. Buyers closed on 47,837 homes in 2008, compared with 49,789 homes in 2007. Between 2006 and 2007, the decline in closings was less than 1 percent.

A decline in 30-year-mortgage interest rates from more than 6 percent to about 5 percent didn't come soon enough to boost markets in December, Bauer said.

If lenders aren't sitting on a large inventory of homes that they need to unload and if job losses don't force another surge in foreclosures, Cox said, Denver's housing market could start a slow, gradual recovery sometime this year, ahead of the rest of the country.

"I don't believe we have seen the bottom," Bauer said, "but I don't believe we are far from it."

Aldo Svaldi: 303-954-1410 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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