The Denver Post Real Estate section (Thomas McKay) quotes Coldwell Banker Residential Broker, Gary Bauer each week. They imply that the price of all homes in the Denver metro area is typically increasing to a present average value of $242,000. They claim the price of an average home has increased in 1999 from under $200,000 to its present price of $242,000. This information is misleading in several ways. They are quoting the price of an Average Price Sold and then they make the statement indicating that All homes have increased in value. The truth is that the same house is worth much less to sellers. There are several factors at play that make The Denver Post statement very misleading to the public in my opinion and to many people I talk to about these figures. First, the same home that was listed for perhaps $340,000 a year ago will typically be discounted, then settled for maybe $260,000. The average price of a house SOLD may be up, but the price of the same house is down. They owner may be expected to pay points and all closing cost where in 1999 this was most often not the case. Second, in 1999 there were few homes on the market, they sold in an average of 22 days as is. There is individual case after case that buyers can ask for upgrades such as all new windows, insulation, new roof, new floor, and new heating/cooling systems. These are built into the transaction, with the realtor taking their 5% to 8% commission. To claim the same house selling with no upgrades in 1999 where all homes in 2003 are expected to provide upgrades up to 15% (after a price discount) is not a fair or accurate portrayal of the housing market. Third, a local TV station reported that in one of the largest suburbs, there were 7 new homes coming up for sale for each one sold in the last year. There are huge numbers of new homes still under construction since it takes about two years to acquire permits and prepare home additions in large scales. Forth, Colorado unemployment (long-term not reported in the eligible for State Unemployment Benefits figures) is reaching new limits. The Denver Post reported that Denver area county courthouses are concerned that the number of foreclosures are already higher than they can process. They are backlogged; foreclosures rates are escalating, The Denver population of high paid technical workers that fueled the boom are leaving the area in record numbers from my direct and personal experience. For a reporter to mindlessly accept Coldwell Bankers numbers and make blanket statements indicating that all homes are increasing in value without recognizing other reports of a buyers market and other deflationary trends is probably not an accident. Coldwell Banker and other real-estate companies are one of the the largest advertiser for The Denver Post. These reports probably indicate a conflict of interest. This is somewhat like Enron having Author Anderson report the information that investors used to make purchases. Buyers should beware The Denver Post reports on the Average home price in Denver Metro area. RobEnglewood, Colorado
U.S.A.
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