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!