The end is near. Another year is about to hike over the horizon and a new year will magically make its presence known. The years seem to slip by more quickly these days as we try to keep pace with the newest cell phone, computer or television. Technology has made things smaller, more efficient and quicker. We would die of boredom waiting for an old IBM 286 to boot up; all fifty pounds of it.
Despite all the changes in technology over the past couple of decades, the purchase and sale of real estate has remained pretty much the same. It is still a hands-on business. Ultimately, all the final decisions are made by humans, not computers.
The pace of a real estate market isn’t defined by the human element, though. Statistics rule here. How many homes have sold this week, this month, and this year? How does that compare with last year or the year before that? Are home values going up or down? How many homes are on the market for sale? All questions requiring statistical answers.
Here are some statistics compliments of MetroList (the Denver Metro MLS). The year 2005 is used as a benchmark, since that has been the most active year for sales activity for the past six years throughout the Denver Metro and Northern Colorado real estate markets.
Through November/2005, there were 6,466 single family sales and 695 attached unit sales in Douglas County. That compares to 4,203 single family sales and 559 attached unit sales through November/2010; approximately a 34% reduction in the number of sales. When looking at 2009 figures, single family home sales for 2010 are similar (4,203 vs. 4,220); attached unit sales are down about 14% (559 vs. 650).
Surprisingly, the number of Douglas County active listings in November/2010 (2,679 single family; 318 attached units) vs. November/2005 (2,555 single family homes; 370 attached units) is up about 5%. November/2009 active listings were comparable to November/2010 figures (2,637 single family; 337 attached units).
Statistics can be confusing at times. They can be manipulated to represent a specific position or point of view. If looked at solely from the perspective of what the numbers are, they don’t lie. So, what do the numbers above tell us?
• Sales are down noticeably from 2005. They have trended down every year since 2005 for the Douglas County market area, but 2010 sales numbers indicate the market is beginning to stabilize.
• The number of active listings has risen slightly when compared to 2005. Over the course of the past few years, the number of active listings in the market collectively as a whole has decreased. Sellers have decided to (a) stay where they are and not move; (b) wait for the market to improve and then move; or (c) rented their home and moved.
Real estate market values haven’t improved since 2005. The upper end of the market has experienced the greatest negative impact from the economy. The lower end of the market has been able to sustain itself. The government’s foray into assisting the housing market through tax benefits created some short-lived positive energy. Historic lows for home mortgage interest rates have helped people to refinance out of adjustable rate and interest only mortgages, but haven’t provided a noticeable shot-in-the-arm for home sales.
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