November was a bit of a turkey for the Denver-area housing market, with the worst closing activity of previously owned homes for the month in almost two decades, the fewest number of under contracts for a November since 2004, and almost a 13 percent increase in inventory from November 2009.

-The 2,666 closings last month – the worst November since the 2,153 in 1991
-Denver metro-area’s population has grown by about 42 percent since 1991.
-The average price of a single-family home at $281,466 is 6.5 percent higher than the $256,498 in November 2009
-Median price is up 7.3 percent to $233,990 from $218,000.

The price increases are primarily due to the fact there are few super low-priced homes on the market, as well as more activity at the middle and upper-end of the market.

Looking forward

-Job growth in the Denver metropolitan area seems to be growing
-Stronger sales at restaurants and many retailers
-For seasonal reasons, sales almost always drop in November from October.

-Home supply rising 20,392 unsold homes November 2010 compared to 18,061 in November 2009

The increase in inventory could result in falling prices, said Jeff Thredgold, chief economist for Vectra Banks. “Supply and demand does work sometimes,” Thredgold said. “Increasing the supply can put some downward pressure on prices.”

Economist Thredgold said that the Denver-area’s economy has not bounced back as quickly as some other areas, which is one of the reasons that demand for housing remains soft. But more than anything it is being buffeted by macro metrics.

Thredgold said uncertainty on a number of national issues are making consumer reluctant to shop on the dotted line, including:

Tax rates
Health care
The ability of Democrats and Republicans to work together

“Even thought mortgage rates are still extremely attractive, despite recent increases, people are keeping their money very close to their vest, so to speak,” Thredgold said. “Plus, for many people, they have a house to sell before they can move up to a bigger one. And it is difficult to sell a home right now.”

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