http://www.denverpost.com/Stories/0,1413,3...l?search=filter
Home prices decline for 1st time since '90
Metro-area drop may signal housing slide
By Kristi Arellano
Denver Post Business Writer
Thursday, February 27, 2003 - Metro-area home prices in February slipped more than $2,200 from their year-ago level, marking the first time since 1990 that the average home price recorded a yearly decline.
The dip gives more weight to worries that the metro-area housing market is headed for a downturn.
"This casts a focus on one of my big concerns, which is whether home values are going to hold up," said Tucker Hart Adams, a regional economist for U.S. Bank.
"Consumers have seen huge losses in their stock portfolios, and the only thing that's kept net worth from declining is the increase in home prices.
" If housing prices go down, that is the nail in the coffin of consumer confidence," Adams said.
Yet Adams and other experts aren't ready to call February's price drop a sure sign that Denver's housing market is headed downhill.
A decline in homes prices is troubling for sellers, but it would be welcome news for buyers priced out of the market by fast-rising values in the 1990s.
The average price of a single-family home was $263,209 in February, down 0.8 percent from $265,451 a year ago, according to a pair of reports issued Wednesday.
The median price - often considered a more accurate gauge of the market - eked out a 1.4 percent gain over last year. The median represents the midpoint, with half the prices above it and half below.
The information, compiled by Coldwell Banker Residential Brokerage and Jerry and Steve McGuire of Re/Max Professionals Inc., is based on data from Metrolist Inc., the area's Multiple Listing Service.
A single month of data isn't enough to gauge the direction of the market, Adams said.
"One number does not make a trend, but this is one more piece of evidence pointing to a trend," Adams said. "It's another thing to be concerned about."
Some brokers attributed the dip to a slowdown in high-end sales - not an across-the-board price drop.
"Prices aren't coming down dramatically, but the homes that are selling more right now are the lower-priced ones," said Kate Rossi, president of Coldwell Banker in Colorado.
Steve McGuire, a broker associate with Re/Max Professionals, said that high-end home sales have flattened but that the market for homes and condos priced below $250,000 has remained strong.
Sellers with homes priced lower than $250,000 are still confident they won't have to take a loss.
Sara DeLuca and her husband, James, still haven't sold their Curtis Park home, which they put on the market in October.
"We knew that the market was slower and that we were taking a chance, but we didn't have any expectations of when it would sell," Sara DeLuca said.
The couple want to move to a larger house to accommodate their growing family, but they're not in a hurry.
"We haven't really looked for another house because we didn't want to put ourselves in a situation where we would be forced to lower the price," she said.
Their two-bedroom Victorian is listed for $199,900.
"It's a good price and a popular neighborhood, so we think our chances are pretty good," she said.
But some sellers of higher- priced homes are growing frustrated that they can't sell.
Mike and Shirley Pulciani have had their home outside of Parker on the market for more than a year. The 5-acre property, which includes a barn and horse arenas, is in near-perfect condition, Mike Pulciani said.
He and Shirley want to move to Meeker now that they're retired. Their three-bedroom home is listed at $399,000.
"It's a steal," he said. "If I was selling two years ago, I wouldn't have talked to you for less than half a million. I'm taking a loss if I sell now."
Buyers are in a better position to negotiate because so many homes are on the market.
Brokers listed 22,989 homes for sale in February. That was up 33 percent from February 2002 but down from the record 23,769 homes for sale in October.
The number of homes and condos under contract was down 7.7 percent from last year. The 2,423 homes under contract is the lowest recorded for February since 1995, when interest rates were around 8.5 percent.
Housing experts said today's interest rates are enticing first-time buyers into the market, fueling the demand for lower-priced homes. Mortgage rates last week reached a new low, averaging 5.8 percent, with 0.6 points for a 30-year, fixed- rate loan.
The average condo price was up 2.1 percent while the median climbed 4.2 percent, according to the reports.
The last time single-family home prices fell from the previous year was February 1990, said Gary Bauer, an independent real estate broker and consultant who tracks Denver's housing market.
He is predicting that Denver's resale housing market will struggle as long as there's a possibility of war with Iraq. Political and economic uncertainty often lead people to postpone big purchases, he said.
"We're going to see adjustments on a monthly basis because people are concerned about what's going to happen," he said.
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