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02/10/2005: "Sales of new homes flat"

Denver Business Journal

LATEST NEWS
November 18, 2005


Total new-home sales in the Denver area stayed relatively flat in the third quarter, and there was an oversupply of existing homes up for resale, according to The Genesis Group's Denver Housing Overview for the period.

Apartment vacancies continued to be high, despite positive absorption of new units in the last year.

The Genesis Group is a real estate research firm based in Englewood.

New housing, from standard single-family homes to duplexes, saw third-quarter sales increase 3.6 percent to 14,226 from the same period last year. Sales of attached product such as condos and townhomes increased 16.4 percent, helping to compensate for a 2.1 percent decrease in single-family home sales.

"New-home sales remain virtually unchanged through Third Quarter 2005 from levels of the past few years," said the Genesis report.

The report added that while some parts of the metro area have healthy supply/demand conditions, others see builder incentives that offset home-price increases and high levels of contract cancellations.

"In essence, the success of the metro Denver homebilder may largely be determined by the geography in which its projects are located," the report said.

Overall new-home inventories increased 23.6 percent, with attached inventory up 33 percent and houses' inventory up 12 percent.

Average new-home prices have risen 9 percent in the last 12 months, with single-family homes hitting $326,687 on average in the third quarter.

Sales of existing single-famly homes dropped 1.5 percent for the period, while sales of condos, townhomes, etc., decreased 1.2 percent.

The average price for houses being resold rose 6.1 percent to $315,151, compared to a nearly equal increase to $192,449 for condos, etc.

The metro-area apartment market's "economic" vacancy rate, which includes rental concessions given by landlords, was a "very high" 24.9 percent in the third period, according to Genesis.

Net apartment absorption has been positive in the last year, as 18,500 units were occupied and only 8,365 new units constructed.