Submitted by Doug Hutchins, Castle Pines Real Estate Specialist, Broker Associate – The Kentwood Company

Closed home sales in the Castle Pines area in 2010 exceeded the number sold in 2009 and inventory levels are at the lowest levels in the past two years.  This is encouraging news, but prices continue to fall or stay steady depending upon the price point and neighborhood.  Inventory levels need to continue to fall further before any of the areas of Castle Pines will see price appreciation.

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 is currently the strongest real estate market in the Castle Pines area. 

Castle Pines North

Castle Pines North	2008 1/1 – 12/31	2009 1/1 – 12/31	2010 1/1 – 12/31	% Change 2009 to 2010
Average Net Sales Price	$534,618	$476,507	$523,536	9.9%
Average Price Per Square Foot	$180	$166	$177	6.5%
Average Days to Sell a Home	134	159	118	-25.8%
Number of Homes Sold	176	164	180	9.8%

At the end of 2010, there were only 77 homes available for sale in Castle Pines North.  This is the lowest level of homes available for sale since I have tracked this data for Castle Pines North.  At the end of 2009 there were 105 homes available for sale and 136 homes available for sale at the end of 2008.  Months in inventory, which is an indicator of future price movements, was at 5 months in Castle Pines North at the end of December.  This compares to 8 months at the end of 2009 and 9 months at the end of 2008.  Inventory levels in a balanced market, where prices are neither rising nor falling, are between 5 to 8 months. 

The average sales price has increased by almost 10% in Castle Pines North in the past year, but this has been due to an increase in the number of higher priced homes selling and not true price appreciation.  In 2010, 40% of the homes sold had a sales price above $500,000.  That compares to only 30% of the homes in 2009 selling above $500,000.  If sales were normalized against the 2009 product mix, the average price has stayed flat in Castle Pines North over the past year.   

Castle Pines Village

Castle Pines Village	2008 1/1 – 12/31	2009 1/1 – 12/31	2010 1/1 – 12/31	% Change 2009 to 2010
Average Net Sales Price	$1,197,282	$1,045,128	$982,878	-6.0%
Average Price Per Square Foot	$355	$305	$282	-7.8%
Average Days to Sell a Home	205	416	270	-35.1%
Number of Homes Sold	83	55	90	63.6%

Castle Pines Village has 17 months in inventory at the end of September 2010.  This is down substantially from 23 months at the end of the second quarter and down from 26 months at the end of the first quarter.  This inventory level, though, continues to indicate a significant oversupply of homes in Castle Pines Village and indicates continued substantial price reductions in the future.  

The average home price has only dropped slightly since 2009, but averages can be skewed by changes in product mix as well as price appreciation or depreciation.  Home sales priced above $1,000,000 have increased slightly from 2009 to 2010, which has helped support the average sales price in Castle Pines Village.  In 2010, 30% of the home sales in Castle Pines Village have exceeded $1M compared to only 27% in 2009.  In 2008, 41% of the home sales were above $1M.  

Castle Pines Village has 11 months in inventory at the end of 2010.  This is down substantially from the 17 months in inventory at the end of the third quarter and 23 months at the end of the second quarter.  However, many home owners pull their home off the market during the Holidays, which can create an artificially low inventory number at year end.  If this inventory level were to hold through the end of the first quarter, this will be a very positive sign for Castle Pines Village real estate.

The higher priced homes in Castle Pines Village, those priced above $1,000,000, continue to be difficult to sell.  At the end of 2010 there was a 27 month supply of inventory of these homes.  This continues to indicate substantial price reductions will be necessary to sell homes at this price point.  In metro Denver, the inventory level for homes priced above $1,000,000 was at 21 months at the end of 2010. 

The average home price in Castle Pines Village has dropped 6.0% since 2009 and 17.9% from 2008.  In 2010, 26% of the homes that sold had a sales price above $1,000,000.  In 2008, 41% of the home sales were above $1,000,000.  The highest price sale listed in the MLS system in 2010 in Castle Pines Village was 1029 Anaconda Lane.  It sold for $3,630,000.     

The Acreage Properties 
(Surrey Ridge, Happy Canyon, Charter Oaks, Oak Hills)

The Acreage Properties	2008 1/1 – 12/31	2009 1/1 – 12/31	2010 1/1 – 12/31	% Change 2009 to 2010
Average Net Sales Price	$519,611	$535,011	$478,192	-10.6%
Average Price Per Square Foot	$190	$156	$163	4.3%
Average Days to Sell a Home	149	268	122	-54.5%
Number of Homes Sold	19	9	13	44.4%

There is an 8 month supply of homes in Acreage Properties at the end of 2010, compared to 9 months at the end of the third quarter and 13 months at the end of the second quarter.  The average sales price has dropped by 10% from 2009, but average pricing and inventory levels are greatly affected by each sale and each home listed because there are so few homes in the Acreage Properties.  This data can be substantially skewed by one high priced or low priced sale.   In general, the market for acreage properties continues to be slow and inventory levels are high in Douglas County. 

For all three areas of Castle Pines I see little change in 2011 compared to 2010 for sales prices and the number of homes sold.  The biggest influence in the real estate market in 2011 will be interest rate movements.  If interest rates were to increase substantially to above 6.0% for a 30 year mortgage, the real estate market will suffer.  In the last eight weeks of 2010, interest rates increased from close to 4% on a 30 year mortgage to 4.75%.  The window is definitely closing for Buyers who want to lock in a long term, low interest rate on a home.