I continue to be frustrated when I read news reports about the housing market. It drives me crazy that people who know nothing about real estate, aren’t in the business, continually write reports that are misleading (in my opinion).
A recent LA Times article talks about both year over year and month over month data. It is almost always misleading to evaluate the real estate market based on month over month data, especially a broad measure like median sales price.
The key to the market’s health is ALWAYS, let me say it again, ALWAYS about volume and transactions. As long as their are willing and able buyers, the market is good and healthy.
The challenges over the last 18 months has been not only the lack of buyers, particularly in the higher price ranges, but also the lack of ABLE buyers. In other words, there are many cases where there are WILLING buyers, but because of the huge lending pull back, these buyers are not able to obtain financing.
As you can see from the graphic below, the Denver market as a whole is showing broad strength in looking at year over year numbers. For some of the southern area markets, such as Centennial, Highlands Ranch, Castle Rock, Parker – the year over year numbers are much more pronounced; meaning that Q1 of 2009 was exceptionally weak, and Q1 2010 was substantially stronger.
source: LTGC, Metrolist
In any case, I continue to see progress in the market as a whole. Sure, there are still several problems: financing for condos remains difficult and the upper end of the market is still out of balance in terms of sellers and buyers (more sellers than buyers). However, I am seeing higher end properties begin to sell when the buyer(s) begin to see the value (i.e. “deal”).
