Washington Park Real Estate Trends

In past articles we have segmented the Washington Park market by the types of houses. Those segments were the not maintained (scrapers), maintained, remodeled, pop-tops, and remodels. This month I changed the analysis of the segments and divided the houses by their square footage so that I could easily compare the results of 2007 YTD with those of 2008.

The analysis revealed some interesting conclusions.

The segments look like the following (Prices are in $000s):

Avg. Price				Count
Sq Ft	2007	2008	Delta	Sq Ft	2007	2008	Delta
<1250
1251-1600	$497	$542	9%	1251-1600	16	15	-1
1601-2400	$649	$768	18%	1601-2400	16	5	-11
2401-3000	$863	$831	-4%	2401-3000	9	7	-2
>3000	$1,125	$1,258	12%	>3000	7	7	0
Total	$630	$686	9%	Total	63	49	-14

The smallest houses have maintained steady prices and volume. In terms of price only the 2401-3000 square foot segment had a drop in average price (-4%). In terms of volume it was also the hardest hit segment with 11 units less sold in 2008 than in 2007. There are 70 active listings with the >3000 square foot segment having the greatest increase in units for sale (13 more for sale than have sold so far in 2008).

In the last two months 25 houses have sold so sales volume is improving. Days-on-market are strong at 78; the overall Denver market is 95.

The price per square foot average is $400 with little variation around that number.

Larger houses have diminished as a percentage of total sales.

While our neighborhood continues to have one of the stronger markets in Denver, there are changes occurring. Million dollar inventory is growing and days-on-market are increasing. The not maintained houses that used to sell immediately to builders are now taking longer to sell.

These two phenomena are evidence of the same problem. Families that can afford to move up to the million dollar homes are waiting to see when the Jumbo Loan spread from conventional loans will decrease. Further, banks are requiring stiffer construction loan terms for builders and some builders are built out. The result is that the dirt where these homes would be built in stronger markets is taking longer to sell.

We have observed through over 1000 open house visitors over the last 6 months that there are 5 buyer segments looking at Washington Park. They are:

• Cool hunters, who thought living in a LoDo loft was a great idea.
  
• Ahh, I'm glad that's over, whose kids have finished high school in the suburbs and who have tired of the drive and now they want out of traffic.
  
• Out-of-towners, who view the park, Old South Gaylord and say,A green, walking, urban environment; that's for me!
  
• Need more space, sir, whose young families are growing, careers are stable, they love the neighborhood, and they don't want to leave
  
• "Make-a-bucksters, who are awaiting price appreciation or who want to po a top or scrape a not maintained.
  

Lately, there has been a shift in the mix from the dominant lookers being the Ahh, I'm glad that's over to the Out-of-towners. Visitor volume is down in June from the prior three months.