I thought it would be fun to share my Stapleton Real Estate Market Report as detailed in this email to a prospective (now current) Stapleton homeowner. This was my assessment of the Stapleton Real Estate Market in November of 2007. Check it out:
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Hi Matt, No problem (last night), I understand what it's like to have your hands full with kids, dogs, etc. Once you have a good idea of the financial aspect you will be more comfortable when it comes time to decision making. I understand you are under no time constraints to buy, and that is good when speaking to the local market as a whole. Stapleton, as you know, is a unique community and is continuing to put up impressive numbers. I collect market data mostly via a subscription to a market analysis firm, Metrostudy and other reliable sources like Metrolist. I attended the Metrostudy 3rd quarter 2007 meeting 2 weeks ago and learned, amongst other things, the builders in attendance with new construction developments throughout the state were all envious of the select group of builders in Stapleton. Builders big and small rely on Metrostudy as they are the most respected and valuable information source for the home building industry. As I mentioned, I provide several groups with in depth Stapleton market analysis and statistics (I meet with all of the builders representatives in Stapleton once a month in a closed door sales meeting, local newspapers and the list is growing). Here is a portion of my findings to date:
1. Stapleton is the top ranked master plan community in the Denver Metro area on an annual basis as it pertains to new construction starts, closings and vacant developed lots. Recent numbers for 3rd quarter 2007 show Stapleton leading the pack with gains in all categories from last quarter. Also, Stapleton is ranked #1 for Denver sub markets in annual starts and closings for detached homes. Sub markets include areas like Aurora South, Castle Rock and the like. Due to the number of sales and size of Stapleton it was classified as it's own submarket.
Translation
Stapleton is tremendously well balanced and is the top ranked community in this category and many others. Due to the high standards put in place by Forest City new construction homes continue to sell and they are well prepared for the demand of new lots with which to build upon in the near future. Year to year and even quarter to quarter base sales prices continue to increase at a decent rate. I say decent, and this is good. In other developments in the past builders have dramatically increased base sales prices over the period of a year and have used large incentives and other teasers to keep the recorded sales prices high when in reality the homes sold for far less and once the buyers have taken possession the home is most likely to encounter a large correction in market value, which is due to the fact that other owners in the community that have to sell their home before they would like to can't compete with the incentives the builders are offering and the appeal of a newly constructed home with the buyers personal touches. Over inflated sales prices coupled with artificially high market valuations, due to lax appraising standards, prevented homeowners from selling, refinance, take out a 2nd mortgage or open a home equity line of credit. When this occurs you can rest assured these communities’ resale home valuations have declined greatly. This scenario we see so much around us is exacerbated due to other looming problems facing the market today; adjustable rate mortgages resetting, monthly mortgage payments skyrocketing and homeowners having no equity in their home or in most cases owe more than the home is worth. This all leads to a large number of foreclosures which eventually sell and for considerably less than the home was purchased for and is really worth.
2. Median base price of single family homes (new construction) has increased in Stapleton by 3% over this time last year and is roughly $425,000. With an overall number of 140 total homes sold in the past six months with an average sales price of $464,076.
3. Stapleton is also in the top 10 sub markets for "Finished Inventory Months of Supply" coming in at under 3 months, healthy . The number of finished homes are low and on pace to sell. Equilibrium range is just under 2 months.
Some data specific to New Town: the average New Town base price (new construction) as of the end of the 2nd quarter '07 is $434,650 for a 2,164 square foot home or $201.42 PSF (price square feet). The Clayton model on 28th Avenue is 2,167 SF with a PSF of $195.31. Other factors to consider when deciding to buy an existing home versus a new build includes living in an established neighborhood and for less money then it would cost to build a similar property that will be ready in the future.
Now who's rambling??:)
Stapleton is obviously a great community and has purposefully grown at a rate that would insulate homeowners from some of the described scenarios above. Yes, other properties will be available in the near future. My main purpose in sharing this info with you was because I thought you might like to see detailed market stats for the community you are most interested in purchasing. Secondly, I wanted you to know, factually, Stapleton is truly an exception to the market right now. You stated in a previous email to me:
"We need to take advantage of the fact that the market is in our favor and we can afford to be patient." While this is true for the overall Denver market, it isn't so much for Stapleton. Many buyers are taking this approach in the local Denver market as a whole and rightfully so. Past sales in Stapleton are strong and things don't appear to be changing anytime soon. If anything, market stats show home prices only increasing, new and resale. With this being the case, and you find a home that has all or nearly all of the features you desire and it is within your means financially I believe buying now is a good decision".
11/9/2007:
Hey Colby,
Thanks for the photos. Let us know when we can take a look at this place and the one on Yosemite.
I apologize for cutting things a bit short on the phone last night. I had my hands full. Just to reiterate - if we found the right place at the right price, we could jump at it. The reason I hedged at saying we could do it for this house is that the price is a stretch for us. When we see you on Saturday, we should have a better idea where we sit in that respect. I'm rambling, but I also wanted to say that we appreciate your attention to our search. It’s a great thing, as long as we all take the position that we are under no time constraints to buy. Thus, we need to take advantage of the fact that the market is in our favor and we can afford to be patient.
Thanks again!
Matt
