Q1 2011 Castle Pines Real Estate Summary
Submitted by Doug Hutchins, Castle Pines Real Estate Specialist,
Broker Associate – The Kentwood Company
The performance of the Castle Pines real estate market continues to vary depending on the price point of the home. Sales of homes priced under $500,000 continue to stay stable while sales of homes priced above $1,000,000 continue to be slow. Prices are continuing to fall at the high end creating good buying opportunities for long term owners.
When comparing the first quarter 2011 numbers to the first quarter of 2010, it is important to remember that the government tax credit drove a large portion of the sales in the first quarter of 2010 for homes priced under $800,000 (the tax credit was only available for homes priced under $800,000). The tables below also present information on averages, which can be skewed substantially with a small number of sales. This is due to the variety of sizes and types of homes selling.
The Castle Pines area breaks into 3 distinct real estate markets, so I do look at each market separately to determine my outlook. The Castle Pines North market continues to be the strongest real estate market in the Castle Pines area.
At the end of March 2011, there were only 96 homes available for sale in Castle Pines North, which is a 22% reduction in inventory compared to the 123 homes available for sale at the end of March 2010. At the end of March 2009 there were 143 homes available for sale. For comparison, Single Family Home inventory in metro Denver was only down 8% from March 2010 to March 2011. Months in inventory, which is an indicator of future price movements, was at 6.7 months in Castle Pines North. This compares to 8.8 months at the end of March 2010. Inventory levels in a balanced market, where prices are neither rising nor falling, are between 5 to 7 months. The inventory levels are a positive sign for the Castle Pines North market.
The average sales price and average price per square foot have fallen compared to last year, but due to the small number of sales these averages can be skewed substantially by the mix of homes selling. In general, prices are holding steady in Castle Pines North.
Castle Pines Village has 15 months in inventory at the end of March 2011. This is down from the 17 months in inventory at the end of the third quarter 2010 and 23 months at the end of the second quarter 2010. This continues to be a positive trend for Village real estate, but inventory levels this high continue to signal further significant price declines over the next year. 13 homes have sold in the first quarter of 2011 versus 21 homes selling in the first quarter of 2010.
The average home price and price per square foot have dropped substantially in the first quarter compared to 2010, but so few homes sold in the first quarter this data is skewed by the mix of homes sold. Home prices have not really dropped 25% in the past quarter! The average pricing at the end of the second and third quarters will give a better indication of the pricing change in the Village, but prices are continuing to fall. The highest price sale listed in the MLS system in the first quarter in Castle Pines Village was 1055 Night Sky, which sold for $1,610,000.
There is an 8 month supply of homes in Acreage Properties at the end of the first quarter, compared to 9 months at the end of the third quarter 2010 and 13 months at the end of the second quarter 2010. 3 homes sold in the first quarter of 2011 compared to 4 homes selling in the first quarter of 2010. The average sales price has dropped 7% from 2010, but average pricing is affected by each sale and each home listed because there are so few homes in the Acreage Properties. Averages can be substantially skewed by one high or low priced sale. In general, the market for acreage properties continues to be slow and inventory levels are high in Douglas County.
In general, I continue to see real estate prices staying stable for homes priced under $500,000 in all Castle Pines areas for the next six to nine months. I believe homes priced above $1,000,000 will continue to see substantial price reductions due to the large amount of inventory and small number of Buyers purchasing in this price range. Homes priced from $500,000 to $1,000,000 will likely see slight price reductions over the next six to nine months, with reductions being larger for homes priced closer to $1,000,000. Interest rates continue to stay extremely low by historical standards, creating opportunities for Buyers to lock in low monthly payments. It is a great time to buy for someone who is needing to move up into a larger home if they plan to live in that home for six or more years.