Market Insights

Here’s  a  question  in  keeping  with  the pending  arrival  of  spring  and  the  birth  of a  new  baseball  season.  What’s  the  most expensive baseball card ever sold? Is it the Tulowitzki rookie card? Not! You’d have to go back over a hundred years for the card that sold in 2007 at auction for $2.8 million to  Ken  Kendrick,  owner  of  the  Arizona Diamondbacks. It’s the Honus Wagner T206 card  produced  by  the  American  Tobacco Company between 1909 and 1911.

With  that  bit  of  baseball  trivia,  let’s  segue from baseball to real estate and the concept of scarcity. What made the Honus Wagner card so valuable was the fact there were so few cards distributed  –  only  forty  to  the  public.  What  has  made  home  values increase over the course of the past few years across Jeff erson County and the Front Range is too few homes available for sale.

As an example of appreciation, the average sales price of a single family home in Jeff erson County in 2011 (when the real estate market bottomed  out)  was  $270,802.  The  average  sales  price  of  a  single family  home  in  Jeff erson  County  in  2014  was  $349,463.  That’s  a collective increase of 29.04% over that period of time. For attached units  the  numbers  are  $132,829  (2011)  and  $177,027  (2014)  –  an increase of 33.27%.

Here’s  another  way  to  look  at  the  Jefferson  County  real  estate market during the above periods of time. In March/2011 there were 3,063  active  listing  single  family  homes  on  the  market  for  sale.  In March/2014  that  number  was  538  and  in  March/2015  the  number was 428. For attached units, the numbers were 866 (March/2011), 118 (March/2014), and 91 (March/2015).

Balanced  real  estate  markets  are  where  there  are  a  somewhat comparable  number  of  buyers  and  sellers  actively  involved  in  the process. There is an adequate inventory of properties available for sale, which provides buyers with the opportunity to make educated decisions and sellers don’t feel stressed about having to deal with multiple  contract  off ers,  but  can  assess  their  options  and  make practical decisions.

In  a  real  estate  market  where  either  the  buyer  prevails  or  the seller prevails i.e. a skewed market, the rules are  different. Time is the dominant player, because the buyer can choose to move onto another property (buyer’s market) or there’s another buyer waiting on the front porch (seller’s market).

Since 2005 we’ve experienced three types of real estate markets across Jeff erson County. The market peaked in 2005 in terms of the number  of  overall  sales  transactions,  but  inventory  was  plentiful. Buyers and sellers didn’t feel frazzled. It was a balanced market.

Then, almost overnight, things changed and not in a good way. Dark clouds moved in. To quote Dickens, “It was the best of times, it was the worst of times …”, but the best of times were missing. Can you spell “buyer’s market”? The reality facing sellers was there were no buyers, unless you count banks and mortgage companies who were the unfortunate recipients of foreclosed properties.

It took nearly six years for the Jefferson County real estate market to  begin  to  rebound.  Driven  my  historically  low  mortgage  interest rates, the housing market climbed out of a hole and began a spirited revival, which still exists to this day. For home sellers, it is the best of times.market-insight_april-2015_jefferson-county.indd

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