Last week, the well-respected Case-Shiller Report announced that Denver continues to be one of the least affected real estate markets in the country. In fact, Denver was the second best of the top 20 real estate markets. Still, prices declined an average of 1.1% in the month of November and 4.3% during the previous 12 months.

Of course, numbers like this can be deceptive. There are certain areas of town with many foreclosures that have suffered depreciation of more than 15% during the last year. But the best neighborhoods have tended to hold steady or actually increase in values. That follows the first adage of real estate: "The three most important things in real estate are location, location and location."

Another of positive factor in the Denver market is that the number of residential and condominium homes for sale has actually decreased dramatically during the last year. Currently, there are approximately 19,500 homes and condos on the market. That represents a decrease of 20% from the year ago period. So, there are fewer homes from which buyers can choose. And, homes are generally selling at an average of 95% of list value.

Homes priced under $300,000 continue to sell at a brisk pace. First-time homebuyers find themselves competing with investors in this price range. So, a well-priced home can sell over the list price. This is happening most often in the better neighborhoods within Denver. Outlying homes and those priced over $2 million are selling extremely slowly. These are the homes that can sell substantially below the list prices.

Buyers are still finding good deals on homes. Sometimes, a buyer may have to move on to the second or third choice in order to find a particular good value. Foreclosures can offer particular good values if the buyer is willing to invest some "sweat equity" in their new home. Foreclosures often have some cosmetics that need to be improved before moving in.

Still, most buyers find a home that best suits them on the open market. Sellers have become more realistic and are often open to negotiation. For the bargain hunters, foreclosure and distressed properties can still represent the great values.

I am often asked where are the best bargains in Denver? There is no one answer for every neighborhood in this large marketplace.

All real estate is local. You hear that all the time. Especially, now that we're in the midst of a nationwide real estate slowdown, you hear that about the differences and real estate markets across the country.

In Denver, we are very fortunate that the slowdown is not affected us as much as it has in other parts of the country. Still, real estate sales year-over-year have decreased by 3% according to the most recent statistics released earlier this month. And surprisingly, prices for homes sold across the entire market have decreased by 15%.

That doesn't mean that the average price of a particular home in Denver has decreased by 15%. It just means that the average of all sales prices have declined by 15%. Foreclosure neighborhoods have been hit more. So have higher priced, luxury home neighborhoods been hit harder. Jumbo loans are much more difficult to obtain than conforming loans below $417,000. And, the interest rate for jumbo loans is running almost a full percent higher. As a result, fewer higher priced homes are selling.

The table below clearly shows that even in the better neighborhoods of Denver homes sales priced from $100,0000-$300,0000 have slowed by a whopping 40% on homes priced between $1 million and $3 million. Higher priced home sales have slowed even more. But homes priced below $500,000 in those same neighborhoods have slowed at about half that pace.

The stability of home prices is less predictable by price range alone. What matters more is the ratio of homes on the market to the number of sales in a particular neighborhood. This is called market absorption. It means how many months does it take for a home in a particular price range and a particular neighborhood to sell on the average.

We've all heard that in some markets of Florida, for example, that the extortion time on the market is more than 12 months. For the entire metro Denver area, the absorption rate in April ran at less than six months. However, so far this year the absorption rate for homes priced between $1 million and $3 million in the southeast section of Denver is nine months. Last year the same time period, absorption rate was less than six months.

But, consider the absorption rate for the most expensive of the luxury homes priced between $3 million and $9 million. This year it takes an average of 22 months to sell such a home even in the best parts of the Denver metropolitan area. Even last year, the absorption rate was 10 months. In spite of that, home prices in affluent communities like Cherry Hills in Greenwood Village home prices have remained stable to only slightly lower. But in neighborhoods where supply exceeds demand by a large amount prices have declined. That includes the University Park neighborhood, Bonnie Brae and Hilltop in the city and Polo Reserve, Castle Pines and Diamond Ridge in the suburbs.

Bargain conscious buyers can find the best values in neighborhoods where there are more homes for sale than have sold in the last four months. The longer the average time on the market in a neighborhood, generally the more motivated a seller will be.

You may have already read the "Headline Numbers" for the performance of the Denver residential real estate market in November: " Home Sales Decline 3.2% From Last Year".

That is true but there is more to the story. First, that number is pretty good compared to the "boom-to-bust markets" in California, Florida, Arizona and the like where home sales are down over 20% year-over-year. Secondly, those numbers include both single-family homes and condominiums. The also include homes in the better neighborhoods and those in neighborhoods suffering more foreclosures. These are important distinctions.

Condominium average sale prices are down more than 15% year over year. But, single-family homes actually increased in average sales price over the previous month from $290,000 to $298,000 and actually increased slightly from last January. So, the single-family resale market is holding prices well even though the number of sales is down from a year ago. So, let's consider only single-family sales with the exclusion of condominiums in the rest of this article.

Now, consider the better neighborhoods in Denver itself and those in the suburbs. The southeast quadrant of the city has the more expensive homes on average. It is desirable and has suffered slightly less than the market as a whole. The best measure of home sales is absorption. That is the percentage of homes on the market that go under contract pending closing each month. Denver Southeast had 12% sales absorption in November compared only 6% in October.

The better suburban areas also improved in sales absorption. South Suburban East includes the renown Cherry Creek School District and some of the most expensive neighborhoods in the metro area. Sales absorption there increased from 13% in October to 15% in November.

In comparison to the whole Denver market including the city and all suburbs and outlying areas, home sales absorption actual decreased from October to November.

"All real estate is local". That is true not only for the difference in homes sales between cities but also the varying home sales within a city. So, if you consider buying a home in Denver, consider the neighborhood. Prices are very soft in neighborhoods with high foreclosure rates and lower-income neighborhoods. They are also soft in far outlying suburbs. But, the more desirable neighborhoods are relatively stable in home sales and home prices.

The Denver real estate market continues to "level-off" according to statistics just released by Metrolist, the local reporting multi-list reporting agency.

Under contract sales increased for single-family homes increased by about 5% from the previous month. However, sales were still down 1.66% from the year ago period. That suggests that the market has consolidated much of previous losses.

One important statistic to consider is not reported. It is absorption. Absorption is the number of months it would take at current sales levels to sell all the homes currently on the market. Professional sellers such as relocation companies and lenders rely on absorption to determine the true condition of the real estate market.

Interestingly, absorption has continued to improve all this year in Denver's market. Just single-family homes had 4.2 months of inventory (available homes vs those "under contract" for sale) in May. January absorption was over 5 months of inventory.

Condominiums always have less absorption in this market because it takes longer to sell condos than single-family homes here. The absorption rate for condos was 5.8 months in May. Absorption rate began this year at 7 months of inventory. So, condo sellers are finding slightly better sales conditions too.

An ideal, "healthy" market would have 3 months of inventory.

"Denver leads the nation in foreclosures". That's what several newspaper headlines said recently.

"Luxury home sales above $1 million have suffered less in the last year. Those sales are still relatively constant with the prior year." That's what I said in a recent editorial featured here on Denver.com.

Why are both statements absolutely true? Remember what is important in real estate? It's an old adage but it has never been truer. The three most important things in real estate are "location, location and location".

Most Denver area foreclosures are occurring in Adams and Weld counties. Those are suburbs on Denver's north side. Also, foreclosures in Denver proper have mostly been limited to the north and west sides of town. Also, the northern section of Aurora has had more foreclosures.

So, does that mean all the better neighborhoods are on the east and south sides of town. Not exactly. But, that is a fair generalization with many notable exceptions. Broomfield, Arvada, Lakewood, Highlands and other areas have been less affected by foreclosures. But, it is fair to say that the south side of town both in the city and suburbs has low foreclosure rates. Coincidentally or not, those are the more expensive section of the city.

I mostly practice south of I-70. My colleagues on my team work north of there. I rarely see foreclosures south of I-70 and when I do they hardly ever are great bargains especially given their generally rough condition. Luxury homes above $500,000 are generally in better areas that have held value during this downturn.

Still, bargains can be had. This is generally a "Buyers' Market" but exceptions do exist. Don't try to buy a new home in Cherry Hills and pay less than $3 million. It just won't happen. But, there are builders and motivated sellers all over town making deals. The trick is to determine motivation and capitalize on it.

Even though the average selling price in better neighborhoods is still 97% of asking price, many homes will sell at substantial discounts. I have been helping my clients get the best deals for 28 years. It's just a matter of knowing the various markets around town and how to play them. I know that can be done because I do it all the time!

Despite usually cold and snowy weather, Denver real estate sales increased in January for the first time in a over a year. At the same time, inventories of existing homes for sale declined for the fifth consecutive month.

Sales contracts increased over the previous month by a whopping 29%. Contracts were up about 1% from the previous January. The number of homes for sale declined to 24,350 in the metro Denver area during January. They had been more than 32,000 within the last 5 months.

This confirms what we have been predicting here for the last 3 months. A turnaround, or at least a stabilization, of the Denver real estate market seems to have begun.

Also, builders have liquidated now much of their completed new homes for sale. To do that, price and builder incentives competition became fierce in the last half of 2006. Some builders were discounting prices by as much as 10%. That cut their profits dramatically but also reduced their carrying costs for completed homes.

Popular areas such as Highlands Ranch have almost no completed new homes for sale now. Buyers have to wait for as much as 9 months for a home to be completed. Still, many homes are available for delivery to Buyers in late Spring.

"Incentives" do still exist but the amounts have been cut dramatically to less than half of their previous amounts.A few areas still have huge discounts available. But, those are in areas that are further away from employment centers such as the far eastern suburbs.

Luxury home sales above $1million have suffered less in the last year. Those sales are still relatively constant with the prior year.

Denver weather has been warm during the first part of February and the snows are melted away. High temperatures are back into the 50's and 60's now. It is beginning to feel a lot like Spring. That's usually when Denver home sales take off. This year seems to be no exception.

Residential listings of existing homes in the Denver metro area dropped for the second consecutive month even while sales dropped slightly according to November statistics just released.

Listings of single-family homes and condominiums in the metropolitan area dropped to 27,530. That is a reduction of 7.38% from October and the second consecutive month of reductions in the number of listings. October listings dropped 5.5% from the previous month.

This is a very good sign for the Denver market. The market here has been soft due mainly to increases in the number of homes on the market. A reduction of inventory over the last 2 months indicates this market may be at or near the bottom in this cycle.

Still, sales of existing homes were down by 3.78% from the year ago period. All figures included both detached homes and condominiums. Sales declined less for just detached homes. That reduction in sales from the year ago period was 3.4%.

Residential home sales have the focus for the local real estate industry. While sales have slowed somewhat over the last year, increases in existing homes on the market have doubled the decreases in sales.

Single family, detached homes always lead the market in any recovery. In particular, inventories of listings decrease usually before sales increase. That's the way it was when this market began its recovery in 1990. But recently, I've even noticed an increase in sales activity in early December. Multiple offers on listings are just beginning to show up. I've had two multiple offer situations in the last week. If this tread continues for the next month or two, our real estate market could be blossoming this Spring.

The much ballyhooed real estate slowdown has hit Denver real estate along with the rest of the country. Recent Multilist statistics have shown a slowdown in sales of about 5% from peaks reached in the Spring of 2005.

This cloud does have a silver lining and there is more than one. Firstly, sales of existing homes are exactly the same as they were last month and even in the same month a year ago. That shows that sales have not continued to erode. They are now constant.

Secondly, inventories of existing homes have actually begun to shrink. Inventories have been running 15% higher than the year ago period. That bloating of supply that has made prices soft in some of our market segments. Especially less desirable neighborhoods have suffered actually price decreases. But, luxury homes in the best areas have maintained relatively steady prices.

So here is the great news. In the last two months, inventories of existing homes have actually decreased 5.5%. If this trend continues into Spring, look for prices here to stabilize and perhaps begin to increase again. That right! It has been the suppy side that has hurt the Denver market most. If supplies actually continue to decrease, prices will have to firm.

So, the obvious conclusion for Sellers is not sell now. Buyers, however, might want to take advantage of a market that is showing signs that it might be firming and home prices could be on the rise again soon.

Of course, two months of statistics does not make a trend. The problem is when a trend has been established, it will be when prices begin to actually rise. Buyers might be well advised to "buy now" before prices and perhaps even interest rates rise again.

You always know summer is almost over when Monday night Football shows Denver at its coldest and wettest. This year was no exception as the Broncos whopped the Patriots on October 9 as hard rain and cold threatened snow that never quite appeared. It usually does.

By comparison the Denver real estate market looks almost balmy. Existing homes on the market remained essentially unchanged from last month . Sales are still down about 15% from the same period last year. So, the national press says Denver is not a "bubble market" but it certainly is not generally a strong market either.

There is a notable exception. Homes priced above $1 million are doing better than the general market. I believe this is because those homes are generally located in better neighborhoods. I remember learning the three most important things about real estate. They were "location, location and location". Guess what? They still are.

My office specializes in homes in better areas so our statistics for our 43 agents are pretty good. Year to date, we have sold 155 homes over a million dollars. That compares to 166 in 2005 and 122 in 2004 during the same period. Of course, we sell many homes below that price point as well. Those home sales are off significantly and buyers can usually buy those homes under asking prices.

Here we are in August and the Denver real estate market continues to enjoy more activity than many had predicted. After all, interest rates are higher than a year ago and The Fed wants housing to slow down.

The bottom line is that we appear now to be in for the ideal "soft landing". That's good because our market now is more in balance than it has been. The market statistics below show some interesting trends that might not be obvious at first.

Yes, the number of resale homes on the market continues to rise from the same month last year by about 20% including both single-family homes and condominiums. And, yes, sales of both condos and single-family homes are off combined about 7% from the same month last year.

But, here are some interesting anomalies. The average price continues to rise. Recently, the Denver Post asked me if that means that average home prices are going up. "No", I relied. "It means that the market sales for higher priced homes are stronger than for lower priced homes".

In fact that is true. Homes priced especially from $500,000-1,000,000 seem to be selling as well as ever in many neighborhoods. But, there are exceptions. Homes in blighted or deteriorating neighborhoods are selling much slower.

Homes in more outlying areas are generally selling slower.I call this is the "rings of the tree" theory. That means that when market is steady to declining, the homes that are closed to "the core", sell faster than those further out and closest to the bark. In this case, the core is represented by the best neighborhoods in Denver itself.. The bark is the "exburbs" past Castle Rock and past Golden and east of E-470.

Also, new home sales are doing well in many areas even though sales are down a bit. Builders are more careful now not to start too many new homes at the same time. So, there are waiting lists at many sites for the best lots.