Tuesday, June 28, 2011

Home sales closings: Denver area down 19 percent, Colo. Springs area falls 12 percent

Home sales closings in the Denver area fell 19.6 percent from May 2010 to May 2011, while closings in the Colorado Springs area fell 12.1 percent during the same period.

According to data recently released by the Colorado Association of Realtors, the number of closings in the Denver area fell year over year from 3,408 during May 2010 to 2,797 during May 2011. In the Colorado Springs area, the total number of closings fell from 888 to 780 during the same period.

The number of closings increased in Colorado Springs from April to May, and fell slightly during the same period in metro Denver. There were 2,809 closings in metro Denver and 748 closings in the Colorado Springs area during April.

The first graph shows the year-over-year changes for each month since 2004 in metro Denver. May's year-over-year decline was the fifth month in a row in which the year-over-year change was negative. Ten months of the last twelve have shown negative year-over-year changes in the region.

The second graph shows the same measure for the Colorado Springs area. Home sales closings have arguably been stronger in the Colorado Springs area than in the metro Denver area. Only eight of the past twelve months have shown negative year-over-year changes in closings during the past twelve months, and the Colorado Springs area reported 13 months of positive year-over-year changes from June 2009 through June 2010.

Overall, these numbers show that overall sales transactions remain muted. This is likely due to ongoing challenges in obtaining mortgages and a lack of demand fueled by ongoing uncertainty about employment and wages.

In addition, year-over-year comparisons in closings continue to be affected by the run up in closings through June 2010 that occurred due to the end of the homebuyer tax credit. In the face of this 2010 run-up, 2011 numbers will tend to be considerably smaller. While legally, homes could be still be eligible for the tax credit when closing as late as September 2010, most of these tax-credit closings occurred by the end of June 2010. More sound comparisons in year-over-year changes in closings will likely be available later this summer.

See here for the latest on median home prices.

Note: closings information reflects single-family homes sales only. The metro Denver district does not include Boulder County.