John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Are you bullish on the Denver housing market? Vote at the end of this blog.
The Denver-area housing market ranked fifth in the closely followed Case-Shiller report released report on Tuesday.
Denver, on a year-over-year basis, showed a 1.5 percent decline in September, less than half of the 3.6 percent overall loss of the 20 metropolitan statistical areas tracked in the S&P/Case-Shiller Home Price Indices.
September marked the fifth consecutive month that Denver has been ranked in the top five MSAs by Case-Shiller.
Denver has been in the top five in six of the nine months through September.
Although it also marked the 15th consecutive month that Denver has shown a year-over-year decline, the 1.5 percent drop was the smallest decline so far this year.
“I thought it looked pretty good,” said Peter Niederman, CEO of Kentwood Real Estate. “Of course, we know the numbers are 60-days old, and we already know how we did 60 days ago, but Case-Shiller’s value is to show how we fared compared to the 19 other MSAs.”
In that respect, he said Denver is doing quite well, and would likely be ranked even higher if Case-Shiller tracked only the core counties of Adams, Arapahoe, Broomfield, Denver, Douglas and Jefferson, Niederman said. In addition to those counties, Case-Shiller also includes Clear Creek, Elbert, Gilpin and park Counties. It uses Census Bureau tracts to determine what counties are included in each of its MSAs.
Niederman said some of the outlying areas haven’t done as well as the traditional market, likely dragging down Denver’s overall ranking.
Still, he wasn’t unhappy.
“It could be a lot worse. It certainly isn’t all bad news,” Niederman said. “It could have definitely been better, of course. I think other than Washington, D.C., Denver is one of the only markets that consistently has been in the top five.”
On a year-over-year basis, Detroit performed the best in September, rising 3.7 percent. Detroit, of course, has been one of the worst-performing markets in the nation, both since the housing crisis began several years ago, and on a longer-term basis. Since January 2000, for example, the average home in Detroit has lost about 27 percent of its value, while in Denver, the average price of a home has risen by more than 25 percent during the same period of time, according to Case-Shiller.
The only other city that was in positive territory in September was Washington, D.C., which rose 1 percent. Dallas, with a 0.8 percent year-over-year decline, also bested Denver.
Despite its gain, Denver in better shape than Detroit
“Detroit has no where to go but up, and D.C. can’t go down,” said independent broker Gary Bauer.
Bauer said that for seasonal reasons, there almost always a dip in September. Denver is down 0.8 percent from August, according to Case-Shiller.
“September marks the end of the traditional home buying and selling system,” said Bauer, who prepares his own monthly housing report based on Metrolist data. “From my perspective, Denver being down in September is not unexpected and reflects the end-of-the-season pricing.
He agrees with Niederman that Denver is one of the few metro areas that more often than not is ranked in the top five MSAs.
“We’ve remained very steady a far as prices and very steady as far as sales activity, and that is very positive,” Bauer said. “September wasn’t a barn-burner, but it wasn’t terrible, either.”
National snapshot
Nationally, “home prices drifted lower in September and the third quarter,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The National Index was down 3.9 percent versus the third quarter of 2010 and up only 0.1 percent from the previous quarter. Three cities posted new index lows in September 2011 – Atlanta, Las Vegas and Phoenix. Seventeen of the 20 cities and both composites were down for the month. Over the last year home prices in most cities drifted lower. The plunging collapse of prices seen in 2007-2009 seems to be behind us. Any chance for a sustained recovery will probably need a stronger economy.
“Detroit and Washington DC posted positive annual rates of change and also saw an improvement in these rates compared to August. Only New York, Portland and Washington, DC posted positive monthly returns versus August. It is a bit disturbing that we saw three cities post new crisis lows. For the prior three or four months, only Las Vegas was weakening each month. Now Atlanta and Phoenix have fallen to new lows, too. On a monthly basis, Atlanta actually posted a record low rate of -5.9 percent in September over August. The markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside. The relative good news is that 14 cities saw improvements in their annual rates of change, versus the six that weakened.”
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@John,
“Despite its gain, Denver in better shape than Detroit”
WTF?!
Any comparison to Detroit (other than, I am so glad not to live/own there) is stupid.
Detroit is a dying, shithole of a USA city.
Denver is the opposite.
This Detroit example is one of many reasons it’s useless to compare MSA’s on a month over month or even year over year basis. The relevant Case Shiller MSA compairison would be the baseline of the index from 2000. If you want to compare Denver to other markets use that number.
Dave Barnes… My husband and I purchased 3 houses this year on the Wayne County tax sale for an average of $6600 per house. We’ve rented them for $700/monthly. If you do the math I think you’ll find it’s a lucrative investment. Of course our business plan is to buy at the bottom not the top. Glad to hear that you’re staying out of the Detroit market so that leaves more opportunities and profit for those of us that are true investors!
I think it’s good to watch the trends. Taking into account a statistical 1 standard deviation of variance, metro Denver’s aggregate values might have finally bottomed.
There are other issues that can change our favorable standing, including macro economic issues, but probably not micro economic issues at this time. That’s good news.