The contraction in the Denver real estate market continues.
April statistics released by Metrolist this week show that the number of active, single-family residences for sale fell from 26,171 in April of 2008 to 20,705 last month - a decline of 21%.
Fewer homes on the market - especially at the lower price points - coupled with high entry-level demand is pushing values up in the sub-$200,000 market for the first time in years.
Currently, there are about 5,500 homes for sale priced under $250,000... accounting for 29% of all active listings. But homes in this price category are accounting for about two-thirds of all sales. That spells continued upward pressure on pricing for homes under $250,000.
There's also some better news for homes in the $250,000 - $400,000 range. In April, the inventory of homes for sale in this category fell from 6.32 months to 5.85 months. In January, there was nearly a 13-month supply of homes in this range, so things have improved significantly here as well since the stimulus bill was passed in February.
In short, at the lower and mid-level price points, the Denver real estate market is performing better than at any time since at least 2004. Above $400,000, things remains slow. And above $600,000, there is simply too much ongoing fear about the economy for people to confidently make purchase decisions.
But it's evident the stimulus package, low interest rates and the $8,000 first-time buyer tax credit have created a positive shift at the lower price points.
We know that interest rates are going up, the tax credit is going away November 30 and prices are increasing by the day. So the question is, will the gains of this spring and summer hold up when fall comes around?
The answer to that question will go hand-in-hand with whether or not the larger economy can get some traction after eight months of financial turmoil.