Jefferson County Economic Snapshot - July '12

As we linger on this path of low mortgage interest rates and a depleted inventory of available homes for sale, the Jefferson County real estate market continues to show signs of positive improvement. Through June/2012, the Jefferson County market is up about 22.60% compared to through June/2011 for single family homes and attached unit sales (1,809 sales vs. 1,475 sales). The market still trails the peak year of 2005, down approximately 16.20% for single family home sales compared to through June/2005 (1,508 sales vs. 1,800 sales).

One of the encouraging signs for home sellers is what is called the Absorption Rate. The Absorption Rate is the length of time it would take for the market to sell the existing inventory assuming no new listings came into the marketplace and the level of sales activity remained the same. At the end of June/2011 the Absorption Rate for the Denver Metro market for all single family homes stood at 170 days. That number at the end of June/2012 was 93 days. The noticeable reduction in the length of time is attributable to two factors: (1) overall sales activity being UP 16.84% and (2) available listing inventory being down 36.17%. For the Jefferson County market, the Absorption Rate for single family homes at the end of June/2012 was 90 days. That number at the end of June/2011 was 158 days.

Below is a brief chart showing home values have trended-up thus far this year for single family homes when compared to 2011. Information is from MetroList (Denver Metro MLS).

Real estate markets follow three distinct patterns. The first would be described as a balanced market. This is where there are an equitable number of home buyers and sellers. Homes sell in a reasonable amount of time. Mortgage interest rates are affordable. Multiple offers are not the norm. Sanity prevails. The second would be a buyer’s market. Inventory levels are normally at a high level. Homes values trend downward as sellers are willing to take less. Buyers have a shark like intensity. The third would be a seller’s market. Inventory levels are low. Home values are trending up. Multiple offers are the norm. Scarcity creates demand.

For the balance of  the summer and into the fall  look for the Jefferson County real estate market to continue on a similar path. Inventory levels will peak late summer and characteristically decline as school starts and fall settles in. Home values should continue to increase with the shrinking inventory. For home owners thinking of selling, this late summer and fall may be an opportune time to do so with fewer properties on the market to compete with.