John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Denver-area home prices have risen an average of 28.79 percent since January 2000, putting it in the middle of the pack of 20 metropolitan statistical areas in the U.S., shows the S&P Case-Shiller Home Price Indices.
Most of the focus of the report – which I blogged earlier today – is on the year-over-year and monthly changes.
But the report, which uses “matched price pairs” of single-family homes, to more compare apples with apples than other housing report, also tracks more long-term appreciation.
The report shows that the 20 metropolitan areas in the report showed an overall increase of 44.23 percent.
Since 2000, homes in 10 of the markets have increased more than Denver, while 11 have trailed it.
Denver housing neither saw the boom of other markets of the past few year, nor the current bust, noted Patty Silverstein, the chief economist for the Metro Denver Economic Development Corp. and principal of Research Development Partners in Littleton.
For example, while Denver home prices were off 2.9 percent from July 2008 to July 2009, homes in Las Vegas plunged by 31.4 percent.
“Many areas were skyrocketing, while Denver was very stable,” Silverstein said.
Indeed, some areas such as Las Vegas and Phoenix had seen great long-term appreciation in recent years, but they have lost so much ground that Denver is now besting them for long-term housing price growth.
“They were artificially high markets, and now it is returning to what was more historically normal,” Silverstein said. Other expensive markets, such as Washington, D.C., Los Angeles, and New York are still showing greater long-term appreciation than Denver, although they are down more from their peak prices than Denver. Denver’s long-term appreciation is slightly higher than in Chicago. Poor Detroit lost almost 30 percent since 2000.
Despite the sometimes roller-coaster pricing of housing values, Silverstein still thinks they typically are good investments.
“Certainly over time we have seen that home ownership is typically a sound investment,” Silverstein said. “But the reason you should get into a house is because it is where you want to live there. For individual trying to play the market in housing, it is something that is not without risk and you would have to assume the market risk, as with any investment. Certainly, a lot of us look at a house as an investment, as well as a place to live. But if the main reason for owning a home is shelter, in general, housing tends to be a sound investment over the long-term.”
Metropolitan Area Appreciation from January 2000 to July
Atlanta 10.06%
Boston 54.53%
Charlotte 21.23%
Chicago 28.32%
Cleveland 7.93%
Dallas 21.17%
DENVER 28.79%
Detroit -29.75%
Las Vegas 6.08%
Los Angeles 63.86%
Miami 47.27%
Minneapolis 18.68%
New York 73.66%
Phoenix 6.66%
Portland 50.06%
San Diego 50.99%
San Francisco 28.66%
Seattle 48.44%
Tampa 42.84%
Washington, D.C. 76.32%
Composite - 10 55.85%
Composite - 20 44.23%
Source: Standard & Poor’s and Fiserv
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
But, inflation was 25% over that time period.
This is my chief complaint about the Case-Schiller index. Not adjusted for inflation.
So, the correct headline should be: Denver home prices up a smidgen since 2000.
In real dollars, HOUSES ARE NOT AN INVESTMENT.
In real terms, houses are a place to live.