Your Trusted Real Estate Advisor

When all is bad news, even a back-handed compliment is acceptable. That’s my feeling after reading this article in the Denver Business Journal’s online headline feed.

The lead paragraph says, “While metro Denver home prices are expected to decline in the next few years, according to a new study by Moody's Economy.com Inc., they won't drop as much as most of the country's 100 largest markets.”

So that’s it—the good news is that the bad news isn’t as bad as elsewhere. Well, I’ll take it. That’s better than hearing that Denver housing will drop almost 18% as in Phoenix or over 21% in Detroit. Reminds me of the person who complained about having no shoes until he found someone who had no feet. If we look hard enough we can always find something to complain about. And if we look hard enough, we can always find something positive to talk about.

So, looking at the positive, the Denver market is booming in comparison to what was happening here 20 years ago. I became a Realtor^® in late 1985 just as the real estate market was heading South. By 1987 I sold a home just like the one I had bought in 1983 for $93,400. The one I sold was a HUD home (that is, the home was being sold by HUD because the former FHA loan was foreclosed), and it sold for $70,000. That 25% drop is even greater than what is forecast for Detroit.

I recently started going through the files I had kept from my first years in real estate and shredding them. I ran across a letter I sent to a former client who had moved to Florida. When Bob sold his home in Aurora he allowed someone to buy it by assuming his VA loan. Bob had to bring $5,000 to closing to pay closing costs, and although that was a lot of money, he didn’t want to have his home go to foreclosure. Unfortunately, the man who assumed his loan later lost his job and couldn’t keep up the payments. The loan went to foreclosure anyway.

To put that market in context, when was the last time you heard of a home in your neighborhood selling for 25% less than what you bought yours for? Looking at some recent figures, there were 23,229 single-family homes on the market. That’s 29% more than the 17,985 active homes in January. But we also had 3,943 homes sell, which is 47.84% more than in January. The median price was $257,500, 9.11% higher than January’s $236,000. Had this been like 1987, a $236,000 home could have sold for as low as $177,000.

The point is that the market may seem slow if you’ve had your own home on the market for months, or if you see homes in your neighborhood unsold after many months. But homes are selling, and overall the market is in pretty good shape. In comparison to 1987, the market is fantastic!