Wednesday, March 6, 2013

Colorado home sales have biggest year since 2008 during 2012

The home sales total for metro Denver for December 2012 was up 15.4 percent from December 2011, and 2012 was the most active year for home sales since 2008. December's sales total, which is a 3-month moving average for sales totals provided by the Colorado Association of Realtors, was at  2,985 sales during December 2012. There were 2,586 sales during December 2011.

This article examines single-family homes only.

The first graph shows the 3-month moving average for each month. December's total continues a trend in which 2012 is experiencing some of the highest sales totals reported in four years.

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 fifteen months in a row of year-over-year increases, with December 2012 up 16.4 percent from December 2011. Sales totals in the 12-month average are still down from where they were during 2005 through 2007, but they have come up about 25 percent from the sales nadir reached during May 2011.

We see a similar trend statewide in home sales, where the home sales total (3-month average) has been up, year over year, for each of the past eighteen months and statewide, sales activity is also at a four-year high with the most sales overall since 2008. December sales were up 15.5 percent over December 2011 with 5,294 sales in the state. There were 4,580 sales during December of 2011.

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 fifteen months, and reached a growth rate of 15.2 percent during December 2012, which continues a growth trend that surpasses that which was in place before the financial crisis of 2008.

The Colorado Springs area is also showing signs of growth, although at a smaller pace. The home sales total for December 2012 was up 8.8 percent over December 2011 and has increased year over year for seventeen months in a row. Sales transactions have already surpassed 2008 levels in the Colorado Springs area, as 2008 was not a particularly active year for home sales in the region.

The year-over-year increase in the 12-mo average was at 8.2 percent during December and thus was considerably smaller than the growth rates reported in the metro Denver area, and recent growth also fails to match that which was seen during the period of the homebuyer tax credit in 2009 and 2010.

The Pikes Peak area continues to show a more shaky housing recovery than many parts of the state, and this is likely due to softness in employment in the Colorado Springs area, where the unemployment rate remains above 8.5 percent.

Overall though, demand for home sales continues to build, spurred by low interest rates.