Everywhere you look, real estate is in the news.  In recent years, web sites like Zillow and Trulia have become increasingly popular sources for updates on property values, and articles about the housing market are a mainstay of traditional media outlets.  Until recently, just about all news focused on the decline of home values nationwide.  Now some magazines have begun to report positive news, while others continue to ring the death knell for real estate.  How can you sort out what’s accurate?  Are values going up or down?  What does this mean for our community?

Three pieces of positive information about the real estate market have appeared in the media recently.  According to the closely watched S&P Case-Shiller Home Price Index, the 20 cities they monitor scored a 1.4% increase in home prices over the previous month, and Denver was among the leaders with a 2.5% increase.  Also, the Commerce Department said new home sales surged 9.6% in July over the previous month.  Further, Jeff Thredgold of Vectra Bank Colorado said that home sales are stronger as a result of a high number of foreclosure sales and the $8,000 first-time homebuyer credit offered by the federal government.

Sounds as though the good times are just around the corner for real estate, doesn’t it?  But if you consider the details of each report, you realize they may not impact our local market like you might hope.  The Case-Shiller Index covers 20 major metropolitan areas (granted Denver is one of them) but not smaller, outlying communities like ours.  The dynamics of a big city are different than ours:  more lower-priced homes, more homogenous subdivisions and more diverse housing stock, to name just a few.  For example, large investor groups have been snapping up blocks of foreclosed properties in Denver, driving up sales figures for low-priced homes, but we’ve seen none of that activity in Evergreen/Conifer.

The Commerce Department’s report on improvement in new home sales is certainly encouraging, but the ratio of newly-constructed home sales to existing home sales is much lower here than in Denver.  As of August, only 12 new homes had sold in our entire local market, and, by the way, I know many builders who would throw flowers in the path of any buyers for their now-completed but unsold homes.

Mr. Thredgold is a respected economist whose every word I hang on but, again, we do not have nearly as many foreclosures or homes that are appropriate for first-time homebuyers as Denver has, so the impact of those sales on our local market is not nearly as great as in Denver.

So, if you have to take all these reports with a grain of salt, where do you go to get accurate information about our local real estate market?  The solution is to ask a local real estate broker whom you trust. 

Here are some interesting facts about our local real estate market.  The number of homes for sale this year is down from last year, which means there are fewer homes for buyers to select from.  This is hopefully the beginning of a positive trend where supply will eventually come into balance with demand.

Home sales, on the other hand, are down by nearly 20% from where they were a year ago.  So the demand side of the equation is still disappointing.  But earlier this year, sales were off by more than 35% from the year before, so, while overall sales are still down, they are less bad than before. 

But prices, which reflect the balance of supply and demand, continue to fall—the median selling price in our area is off by 10% from the same month last year.  The reason for this is that prices are a lagging phenomenon and will respond only after the dynamics of supply and demand force them to.  We need to wring the excess inventory out of the market before increasing demand pushes prices higher—and that will take a while.

Evergreen and Conifer are part of the MetroList MLS system that’s based in Denver and it’s possible to extract data specific to our market from MetroList—and that is where I obtained the data above.  A good real estate broker keeps their eye on the market and advises their clients about the dynamics of supply-and-demand, pricing trends and ways to enhance their position in the market at all times. 

Find a broker who takes the time to explain the market to you and who speaks to you in a way you understand.  They may be young or old, with years of experience or new to the business with an unbeatable enthusiasm.  They may have a penchant for statistics (like me) or a clairvoyant ‘feel’ for things.  If you can trust them to tell you the truth, hang on to them and don’t let go.  Especially in times such as these, this information is critical to making sound decisions about buying or selling.