Tuesday, June 26, 2012

Realtors: Home sales up in Denver, Colo. Springs, statewide

The home sales index for April 2012 was up 9 percent from April 2011, and hit a 2-year high for April, although overall activity remains down from April 2010 when the homebuyer tax credit increased sales activity.  The index, which is just a 3-month moving average for sales totals provided by the Colorado Association of Realtors, was at 2,617 sales during April 2012. There were 2,726 sales during April 2010. This article examines single-family homes only.

The first graph shows the 3-month moving average for each month. Sales activity has increased from 2011's 10-year lows.

Looking at the broader trend, we do find that home sales activity has been up in recent months. In the 12-month moving average, which removes the monthly seasonal issues, we see that there have been seven months in a row of year-over-year increases. Sales totals are still down significantly from where they were during 2005 and 2006, but they have come up about 10 percent from the sales nadir reached during May 2011.

We see a similar trend statewide in home sales, where the home sales index has been up, year over year, for each of the past ten months and is now at the highest value for April seen since 2008.

We also see an overall building trend of more sales activity at the statewide level in the 12-month moving average. The 12-month average has been up year over year for the past seven months, and reached a growth rate of 9.2 percent during April 2012, which is the largest growth rate since March 2005.  We can see that the 12-month overage overall has been building since June of 2011:

The Colorado Springs area is also showing signs of growth, although at a smaller pace. The home sales index for April 2012 was up 2.2 percent over April 2011 and has increased year over year for nine months in a row. 

The year-over-year increase in the 12-mo average was also relatively moderate and was at 5.6 percent during April and was down from February's rate of growth, which was 6 percent. This is a little different from what we saw in metro Denver and statewide where the year-over-year change in the 12-mo average has repeatedly grown during recent months.

Demographics continue to benefit home sellers. In-migration looks to continue to be relatively strong while new single-family production continues to be 60 to 70 percent below peak levels. Increases in home prices continue to be rather moderate, and suggests that new home construction is not about to boom.