John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Denver-area home, overall, lost 4.6 percent of their value in the 12-month period ending in May, but that was still good enough for No. 2 on the closely watched S&P/Case -Shiller Price Indices released today.
“This is good,” said independent broker Gary Bauer. “This is very positive news. Once again, it shows the resiliency of the Denver market.”
The Denver area has not shown “tremendous highs and tremendous lows,” Bauer added. “We are on little different (real estate and economic) cycles than the coasts, but we have our own cycles. I think we are coming out of this.”
Scott Nordby, a principal of Innovative Real Estate Group, agreed.
“It’s exiting,” Nordby said. He noted that lower-priced homes are selling briskly, and there is some movement in homes in the $1 million or more price range in the Denver, area.
“What we’re going to start to see a big-time frenzy in the $300,000 or $250,000 and under price range,” he said. There is still softness in the $400,000 to $750,000 price range, though, he said.
Only Dallas, with a 4.1 percent decline, performed better, with a 4.1 percent decline. Denver slipped from the No. 1 position in April, when it showed a 4.9 percent drop.
From April to May, Denver also was ranked second to Dallas, showing a 1.3 percent increase, while Dallas home prices rose 1.9 percent. This is the third consecutive month that Denver and Dallas have shown month-t0-month increases.
“The pace of descent in home price values appears to be slowing” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005. In addition to the 10-City and 20-City Composites, 17 of the 20 metro areas also saw improvement in their annual returns compared to those of April.
“Looking at the monthly data, 13 of the 20 metro areas reported positive returns; and the 10-City and 20-City Composites reported positive returns for the first time since the summer of 2006. To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing”.
“While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation,” Blitzer added.
Here is the percentage changes for the metropolitan statistical areas:
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Sources: Standard & Poor’s, Fiserv
Las Vegas, Los Angeles, Miami, Phoenix, Seattle and Tampa posted their lowest index levels in May since their respective peaks.
From peak to trough Phoenix and Las Vegas are the worst off, down 54.5% and 53.4%, respectively.
More upbeat news is seen in the monthly data, led by Denver and Dallas. In addition, Atlanta, Boston, Cleveland, San Francisco and Washington,
D.C. each reported two consecutive months of positive returns.
Eight of the 13 MSAs reporting positive monthly returns for May were greater than 1.0%.
As far as long-term appreciation, Denver is in the middle of the pack, as far as the MSAs with 10 showing less appreciation and nine showing more appreciation.
However, Denver’s increase of 23.78 percent since January 2000, trails the 39.18 percent overall appreciation for the composite increase for all 20 MSAs. New York City showed the highest appreciation, rising by 70.33 percent since January 2000, while Detroit was at the bottom, where homes, overall, lost 30 percent in the past nine and a half years.
