Among the more interesting endeavors of our chief statistician (and managing broker) Lon Welsh is a four decade study of Sales Prices in the Denver metro area.  At times like this, when a “sky is falling” mentality prevails, it is helpful to examine current events in a historical context.  Consider, for example, the predecessor to today’s housing trough, the period 1987 – 1991.  Housing prices dropped 7%, recovered three years later, and continued the march upward.  In contrast, todays declines are three times those of the late 80’s.  Those who study volatility would posit then, that such a dramatic fall would precipitate an equally dramatic rise.  Well, only time (and crystal balls) will tell.  One thing is pretty certain.  Folks, we are at the bottom.  Recent price trends  bear this out, particularly in the under $250K price range.  Finally, it should be noted that, overall, the average price of a home in Denver was $27K in 1971 and $272K this year.  Nothing appreciates like real estate over the long haul.

Source:  YCRE analysis 1/09-3/09 and MLS year end reports