John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... The Denver-area housing marked ranked second in 20 cities tracked by the closely watched S&P/Case Shiller Home Price Indices released today.
Denver homes, overall, lost 1.9 percent in August, according to the index. Only Dallas, with a 1.2 percent drop, performed better. The overall drop for the 20 cities was 11. 3 percent. Denver had been ranked No. 3 in July and June, in the index.
“Dallas and Denver are continuing their trend from the past month, edging closer into positive territory,” the report notes. The report notes all the areas showed annual declines in August, although they are showing signs of recovery.” Broadly speaking, the rate of annual decline in home price values continues to improve,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. The two Composites and 19 of the 20 metro area showed an improvement in the annual rates of returns, as seen through a moderation in their annual declines.”
Seventeen of the metropolitan statistical areas and both the 10-city and 20-city composites saw price increases in August over July, Blitzer noted.
“While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement,” he added. “California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figure.”
Still, their are potential gray skies on the horizon that could rain on the home market’s rally in the near future.
“Once again, however, we do want to remind people of the upcoming expiration of the federal first-time buyer’s tax credit in November, and anticipated higher-unemployment rates through year-end. Both may have a dampening effect on home prices.”
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Metropolitan Areas July/August Percentage Change June/July Percentage Change 1-Year Percentage Change
Atlanta 1.0% 2.3% -10.6%
Boston 0.9% 1.2% -4.2%
Charlotte -0.4% 0.6% -8.6%
Chicago 1.7% 2.7% -12.7%
Cleveland -0.5% 1.5% -2.8%
Dallas 0.2% 1.2% -1.2%
DENVER 1.0% 1.5% -1.9%
Detroit 1.9% 1.1% -22.6%
Las Vegas -0.3% -1.1% -29.9%
Los Angeles 1.6% 1.8% -12.0
Miami 1.1% 1.3% -18.8%
Minneapolis 3.2% 4.8% -13.7%
New York 0.5% 0.9% -9.6%
Phoenix 1.6% 1.8% -25.1%
Portland 0.3% 1.1% -12.5%
San Diego 1.6% 2.5% -8.9%
San Francisco 2.8% 3.3% -12.5%
Seattle 0.1% -0.1% -14.7%
Tampa 0.4% 1.4% -17.7%
Washington, D.C. 1.4% 1.9% -7.9%
Composite-10 1.3% 1.7% -10.6%
Composite-20 1.2% 1.6% -11.3%
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
In a bifurcated price caldron of over and under $417K, Denver is as two faced as a middle school socialite. Where Denver has a shortage and a multiple offer market at $200K and below in many neighborhoods, Denver’s Happy Face is clearly evident. Over the conventional loan limits of $417K, Denver shows its other evil face. In some market’s over $1M, there is standing inventory in excess of 2 years supply. The Denver Metro Area manages to survive in spite of Pennsylvania Ave., Wall St. and Capitol Hill.
Here’s the bugaboo for Denver Residential Real Estate moving forward. A borrower putting 5, 10, or 20% down on a purchase a few years ago, has no equity today and in many cases is in a negative position. Short sales and Public Trustee sales will continue until we have gained real equity growth in our market. This will take us out into 2012 at least for those borrowers. Think of 1989 as today, and 1992 as 2012, and you will have a good handle on what to look for in Denver’s Residential market. The deal to be made today is for the few move up buyers with equity. Selling in $0-500K range and moving up has never been better, and clearly interest rates will not be this gratuitous by then either. This is the time in the market where skilled advice will serve you well!
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