The State of the Denver Real Estate Market – October 2009
Posted by Bruce Swedal on Monday, November 9th, 2009 at 1:06am.Maybe you have not realized it just yet, but changes are upon us in the local metro Denver real estate market. October, 2009 has set some records in home sales, which on a broader scale indicates a shift in the market to one of recovery and strength.
During October there were 4,910 home that were placed under contract while the previous record for an October was in 2005 with 4,839 homes. The majority of these sales have been under the $400,000 mark and driven by first time home-buyers.
What caused the crazy market? Well pent up demand from the previous year to start and the $8,000 tax credit to first time home-buyers also helped to push it along. The fact that the tax credit program has been extended and expanded to also include some existing home-owners just indicates that this trend is going to continue into 2010 and open up the higher end markets with existing home-owners taking advantage to move up.
It is said that real estate has a leveraged effect on improving the economy due to every dollar spent on real estate generates another four dollars in the service industries. Think about it because when a family buys a home they also need furniture, garage door openers, landscapers and the list goes on.
| Year | Under Contract | Number of Closings |
| 1990 | 2069 | 2294 |
| 1991 | 2520 | 2364 |
| 1992 | 3215 | 3054 |
| 1993 | 3093 | 3348 |
| 1994 | 2439 | 3279 |
| 1995 | 2300 | 3186 |
| 1996 | 2842 | 3197 |
| 1997 | 2961 | 3578 |
| 1998 | 3528 | 3795 |
| 1999 | 2830 | 3824 |
| 2000 | 2821 | 4499 |
| 2001 | 2076 | 3882 |
| 2002 | 2306 | 3931 |
| 2003 | 2285 | 4292 |
| 2004 | 2731 | 4443 |
| 2005 | 4839 | 4174 |
| 2006 | 4715 | 4133 |
| 2007 | 4645 | 3848 |
| 2008 | 4504 | 4282 |
| 2009 | 4910 | 3958 |
Another factor to keep in mind during our discussion is that the population base in metro Denver from 1990 through 2007 has increased by 49% while the number of housing units failed to keep pace by only increasing 40%.
These factors have caused a depletion of the inventory in the metro Denver area. The existing home inventory represents the lowest number of homes on the market since October, 2001. That low inventory level and a high buyer demand has also created the highest sales rate since October, 2001 with 5.99% of the inventory of homes being placed on the market each week. That represents a 185% increase over the sales rate in October, 2003.
| Year | Sales Rate % |
| 2001 | 2.48% |
| 2002 | 2.24% |
| 2003 | 2.10% |
| 2004 | 2.42% |
| 2005 | 4.26% |
| 2006 | 3.66% |
| 2007 | 3.71% |
| 2008 | 4.50% |
| 2009 | 5.99% |
The number of unsold Denver homes on the market in October, 2009 was 18,945 which represented the lowest level of inventory since at least 2001.
| Year | Unsold Homes # |
| 2001 | 19,319 |
| 2002 | 23,769 |
| 2003 | 25,181 |
| 2004 | 26,030 |
| 2005 | 26,828 |
| 2006 | 29,722 |
| 2007 | 28,928 |
| 2008 | 23,120 |
| 2009 | 18,945 |
The meaning behind the numbers is clear and can be seen from clients looking to purchase homes. In many Denver metro areas homes are receiving multiple offers after only days on the market creating competition during the purchase.
Bruce Swedal
Licensed Colorado Realtor
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