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Jennifer Steck (Rocky Mountain Homescapes, Keller Williams Denver Central): Real Estate Agent in Denver, Denver County, Colorado


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Fourth Quarter 2007 Denver Real Estate Absorption Rates

Statistics

Fourth quarter real estate statistics show that Highlands Ranch and Lone Tree are continuing to average a lower absorption rate in comparison to other featured areas, which can translate into quicker home sales. North Jefferson County’s absorption rate is also lower in this current quarter. During the third quarter we had three areas identified as a Buyers Market. This quarter, we are up to eight areas. Buyers tend to shy away from purchasing a home during the holidays and that may explain the increase.

Considering Absorption Rate is one way to measure the health of our real estate market. Absorption Rate designates the number of months of housing supply on hand. The larger the supply, the more competition there is for sellers and the higher likelihood that prices will drop or concessions will be offered. The market has definitely slowed in a the last quarter.

More Months of Supply = Buyer’s Market = Possible Reduced Pricing and/or Concessions

Fewer Months of Supply = Seller’s Market = Possible Price Increases and/or Bidding Wars

The commonly accepted separation between markets is:

Seller’s Market          1-4 months of supply
Neutral Market          5-6 months of supply
Buyer’s Market          7 months and above
 
Single Family Homes
 

Area

Oct 

AR

Nov

AR

Dec

AR

Avg.

AR

Market

Condition

Aurora North

 6.72

 7.90

6.68

 7.10

Buyers

Aurora South

 6.37

 6.46

6.08 

 6.30

Neutral

Broomfield

 4.47

 7.18

5.98

 5.88

Neutral

Douglas Cnty West

 10.28

 9.04

11.72 

 10.35

Buyers 

Douglas/Elbert/Parker

 8.31

 7.99

 9.28

 8.53

Buyers 

Highland Ranch/Lone Tree

 4.02

 4.22

 4.12

 4.12

Sellers

Denver Northeast

 7.30

 6.94

 7.85

 7.36

Buyers 

Denver Northwest

 7.48

 7.78

 5.91

 7.06

Buyers 

Denver Southeast

 8.57

 9.25

 9.75

 9.19

Buyers 

Denver Southwest

 6.34

 7.67

 7.82

 7.28

Buyers

Jeffco Central

 5.45

 6.07

 8.05

 6.52

Neutral

Jeffco North

 5.25

 3.36

 4.67

 4.43

Sellers

Jeffco South

 4.88

 6.75

 5.05

 5.56

Neutral

Jeffco West/Golden

 7.57

 7.61

 5.95

 7.04

Buyers

Jeffco North Central

 5.50

 5.60

 4.74

 5.28

Neutral 

Jeffco South Central

 5.43

 5.75

 5.13

 5.44

Sellers

 
 
 
This quarter, I have created a separate chart showing the absorption rate in the condominium market. There is a higher average absorption rate in most areas in comparison to single family homes. Check out the October absorption rate in North Jefferson County. If we had only looked at October statistics, we would not have had the total picture. October’s rate of more than a two year supply on the market was an aberration and has corrected in the following months. This is a good reason why we look at longer term trends.
 
Condominiums/Townhomes
 

Area

Oct 

AR

Nov

AR

Dec

AR

Avg.

AR

Market

Condition

Aurora North

5.28

7.67

5.78

6.24

Neutral 

Aurora South

6.61

7.08

8.89

7.53

Buyers

Broomfield

13.11

16.29

9.64

13.01

Buyers

Douglas Cnty West

14.56

6.82

9.27

10.22

Buyers 

Douglas/Elbert/Parker

6.86

7.28

4.96

6.37

Neutral

Highland Ranch/Lone Tree

6.38

9.19

4.28

6.62

Neutral 

Denver Northeast

16.40

15.27

14.88

15.52

Buyers 

Denver Northwest

14.82

12.25

12.10

13.06

Buyers 

Denver Southeast

8.52

9.28

7.53

8.44

Buyers 

Denver Southwest

13.85

9.84

7.19

10.29

Buyers

Jeffco Central

6.56

5.82 

8.18

6.85

Neutral

Jeffco North

27.50

5.78

3.70

12.33

Buyers

Jeffco South

5.40

7.06

6.63

6.36

Neutral

Jeffco West/Golden

5.07

4.47

5.55

5.03

Neutral

Jeffco North Central

5.66

7.13

6.38

6.39

Neutral 

Jeffco South Central

6.16

4.81

5.50

5.49

Neutral
 
I’ve heard it said over and over that all real estate is local. This quarterly review of absorption rates clearly shows that is the case. There is a huge difference between Northeast Denver condominium sales where we are averaging a fifteen month home supply and the four month supply of single family homes available in Highlands Ranch and Lone Tree. I’ll be writing another post in the next week or two that compares quarterly averages throughout 2007. I’m hoping that we’ll begin seeing improvement in the market this year. The next few quarterly reports will tell.
 
Based on information from Metrolist, Inc. for the period of October 1, 2007 to December 31, 2007. Note: This representation is based in whole or in part in content supplied by Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.
 
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This entry was posted on Sunday, January 27th, 2008 at 11:43 am and is filed under Buyers and Sellers, Market Activity, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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