Monthly Economic Summary for Residential Real Estate

BY: Article and data provided by: Metro Denver Economic Development Corporation (Metro Denver EDC)

Following the typical seasonal slowdown, Metro Denver existing home sales declined between June and July. Total Metro Denver home sales through the first seven months of the year, however, were 16.8 percent higher than sales reported during the same months of 2011. Although the housing market is stronger compared to last year, a shrinking housing inventory continues to limit buying opportunities. However, analysts say historic affordability continues to keep buyer interest strong despite ongoing difficulties in securing financing. Total unsold inventory for all of Metro Denver in July was a substantial 38 percent below the unsold inventory available at the same time in 2011.

Despite the month-over-month decline in existing home sales, stronger home sales overall are helping to support higher home prices. The July average sales price for Metro Denver's single-family homes was up 4.8 percent over-the-year, and the average price for condominiums was up 24.3 percent.

The pace of new filings in Metro Denver is still on the rise as banks continue to clear their backlog of inventory. Metro Denver public trustees filed four percent more foreclosures through the first six months of 2012 than they filed during the same period last year but was 29 percent lower than the count recorded in the first half of 2010. Officials with each of the seven counties except Boulder reported year-to-date new filings that were at least 1.5 percent above comparable 2011 numbers.

Metro Denver officials issued 84.8 percent more residential building permits in June than they did in June 2011, a sign that new home construction is on the rise. Building activity for detached single-family homes and apartments continued at a measured pace, while permit activity for condominiums and townhomes was also up over-the-year.

The total count of Metro Denver building permits pulled through the first half of the year was 68.5 percent higher than the number pulled during the first six months of 2011. Notably, total building permit issuance for multifamily projects rose 173.1 percent between the first six months of 2011 and 2012.

Data from the Denver Metro Apartment Vacancy and Rent Survey show the region-wide average apartment vacancy rate in the second quarter (4.8 percent) was the lowest reported since early 2001. Second quarter vacancy rates around the region ranged from 3.6 percent in the Boulder/Broomfield area to 5.5 percent in Arapahoe County.

These lower vacancy rates have also pushed rental rates higher. In fact, analysts say the demand for rental properties has begun to outpace new construction activity. The region-wide average rental rate in the second quarter ($980) was 7.1 percent higher than last year's average rate, and rates around the region were up from last year's levels by anywhere from 2.3 percent in Adams County to 9.6 percent in the City and County of Denver.

Article and data provided by: Metro Denver Economic Development Corporation (Metro Denver EDC)