Local home prices set record
Single-family houses bringing $275,305 in Denver-area market
By John Rebchook, Rocky Mountain News
November 28, 2002
rockymountainnews.com
If you're a Denver-area homeowner, you can be thankful today for record home sale prices, although experts caution it's because more mansions are trading hands, not because the overall market is enjoying appreciation.
Reports released on Wednesday showed that the average price of a single-family home sold and closed in November hit a record of $275,305, or more than $8,300 higher than the $266,954 average in October.
The increase in November reverses three months of declining average prices.
The monthly data from MetroList Inc. was released early because of Thanksgiving. Coldwell Banker Residential and Jerry and Steve McGuire of RE/MAX Professionals, in separate reports, adjust the sales for the number of days in each month.
The average price of a condo was a record $172,034 and the average price of all homes sold hit a record $249,807.
However, the median, or middle price, of a single-family home fell to $222,500 from $223,500 in October.
"I think the median is more reflective of the market than the average," said Jim Nussbaum, a broker with the Kentwood Co. "I think we might have one or two years where houses appreciate 1 or 2 percent a year."
Despite the higher prices, brokers aren't under the illusion that housing prices are skyrocketing, not with 22,494 homes sitting on the market. Although that's down 5.4 percent from October, it's up 22.6 percent from a year ago.
Gary Bauer, an independent broker and real estate consultant, noted that in November, 20 single-family homes and one condominium each sold for more than $1 million. The total for those 21 properties was $30.6 million, or an average price of nearly $1.5 million.
In addition, 24 percent of the sales activity in November was for homes priced at more than $300,000, while 41 percent of the homes sold between $200,000 and $299,000.
"It really is the higher-priced homes that are setting the prices this month," Bauer said. "I've been talking to a couple of brokers and they believed that executives who are relocating want to be in their homes before Christmas."
He said anyone who has owned a home for at least 18 months probably isn't taking a loss when selling, although they're having to lower their expectations.
Steve McGuire of RE/MAX Professionals said he was a bit surprised that the average price rose.
"It has to be because of the mix," McGuire said. But he says that with the "powerful factor of low interest rates," the market should boast a strong December and a good 2003.
"A little bit of the upper market is starting to break loose," said Chris Mygatt, executive vice president at Coldwell Banker.
"And I think all the press about 40-year- low mortgage rates is getting some people off the fence who wouldn't normally be buying during the holiday," he said. "They're afraid if they don't take advantage of them, they're going to miss the boat."
Indeed, James Spray of Clarion Mortgage Capital noted that 30- year fixed- rate mortgages, which had been hovering around 6 percent, on Wednesday rose by 0.375 to 0.50 of a percentage point as institutional investors moved out of the bond market.
Rollie Jordan, a broker with Kentwood Co., who sells many expensive houses, said she's noticed an increase in her business.
"My month has been great," Jordan said. "It's not closed yet, but I'm going to sell a home in Cherry Creek for $2.5 million, which is the most expensive home to sell there for quite some time. I've noticed a big improvement lately. It's usually really slow this time of the year." |
