This 6,501-square-foot home with five bedrooms and six bathrooms in Observatory Park in Denver recently sold for $1.435 million.
The Denver-area housing market was ranked the fifth best of the 20 metropolitan areas tracked by the closely watched Case-Shiller report released today.
On a year-over-year basis, the Denver housing market grew by 5.5 percent in August, the biggest percentage gain since January 2002, when it grew by 5.7 percent, according to the S&P/Case-Shiller Home Price Indices. In July, Denver showed a 5.4 percent increase, the fourth best of the cities in the index.
Three of the four cities that showed a bigger percentage increase than Denver had been severely beaten up in the housing bubble of a few years ago. In August, Phoenix showed an 18.8 percent year-over-year increase, followed by Detroit with a 7.6 percent gain. Also doing better than Denver: Minneapolis, with a 7.4 percent jump and Miami with a 6.7 percent increase.
Nationally, the housing market appeared much improved.
“Home prices continued climbing across the country in August,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Nineteen of the 20 cities and both Composites showed monthly gains in August. Seventeen cities and both Composites posted positive annual returns in August 2012. In 18 cities and both Composites annual rates improved in August versus July. Dallas’ rate remained unchanged at 3.6 percent and Chicago worsened slightly from a -1.0 percent annual rate in July to a -1.6 percent annual rate in August.
“Phoenix continues to lead the home price recovery. It recorded its fourth consecutive month of double-digit positive annual returns with a 18.8% rate for August. Atlanta posted a -6.1 percent annual rate, however this is significantly better than the nine consecutive months of double-digit declines it posted from October 2011 through June 2012. Las Vegas’ annual rate finally moved to positive territory with a 0.9 percent annual rate of change in August 2012, its first since January 2007.
“The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market. “News on home prices confirms other good news about housing. Single family housing starts are 43 percent ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive. For the fifth time in a row, both Composites had monthly gains. Home prices in Seattle fell modestly in August, but other than that the 20 cities have also seen home prices generally improve since April.”
MSA Change from January 2000 October-November (non-seasonly adjusted) 1-Year Change from November
Atlanta -3.32% 0.1% 7.6%
Boston 53.74% -0.9% 2.3%
Charlotte 15.41% -0.3% 5.1%
Chicago 13.35% -1.3% 0.8%
Cleveland 0.68% -0.8% 1.8%
Dallas 20.55% -0.1% 5.7%
DENVER 34.50% 0.4% 7.8%
Detroit -19.67% -0.3% 11.9%
Las Vegas 0.56% 0.4% 10.0%
Los Angeles 75.58% 0.4% 7.7%
Miami 51.13% 0.8% 9.9%
Minneapolis 26.41% 1.0% 11.1%
New York 62.86% -1.1% -1.2%
Phoenix 24.16% 1.4% 22.8%
Portland 42.13% -0.2% 6.7%
San Diego 63.58% 0.9% 6.7%
San Francisco 46.23% 1.4% 12.7%
Seattle 42.53% 0.5% 7.4%
Tampa 33.77% -0.2% 6.8%
Washington, D.C. 89.11% -0.6% 4.4%
Composite-10 58.28% -0.2% 4.5%
Composite-20 45.82% -0.1% 5.5%
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Denver is actually DOWN (by 0.1%) from last month using REAL (and not nominal) dollars.
See http://www.3968vrain.com/English/Denver/CaseShiller_Prices.html
That’s the magic of leverage, you can have a real loss in price and still make a fortune.
Since the GSE’s were put into conservatorship, the US Treasury needed to infuse $112B into Fannie Mae and $72B into Freddie Mac. This is just a guess, but I don’t think using leverage is a foolproof way to make a “fortune”.
Also, when you see the words “magic” and “make a fortune” in the same sentence, be skepical.
Its 3rd grade math, and it works
No matter how many times internet posters refer to inflation adjusted prices as ‘real’ prices (and the only place the term is ever used is on the internet), no matter what font you use, no matter what punctuation you use, it does not change the fact that no buyer or seller or Realtor or Appraiser or Mortgage Company cares what the inflation adjusted price of a house is or was. The only people that care about inflation adjusted prices are statisticians and those that predicted that housing prices would continue to decline, and are now trying to rationalize their erroneous predictions.
Leverage did not work so well for the millions of people who lost their home thru a forclosure the last 4 years.
What about the millions it did and does work for?
I think leverage used correctly and safely is a valuable tool. If it’s utilized as a, “magical way to amass a fortune”, it can be very dangerous. I think every homeowner should have at least a 15% equity position in their home or 15% liquid assets in saving, in case they are in a situation they need to sell. The lack of equity in homes today is one of the biggest reasons the Denver market has fewer than 8000 single family homes listed today. This unprecedented low ratio of homes for sale as a percentage of total home stock is preventing people who do have adequate equity and are ready, willing, and able to buy. This lack of inventory creates discouraged buyers, making them stay put. When they can’t find the home they want they don’t list and sell. See the pattern? I hope these don’t become structural issues in the Denver market. The same is true on the commercial side. I have friends that own buildings and as there loan are maturing and need to be reset are forced to bring 100s of thousands of dollars to closing in order in increase their equity position or the bank won’t make the loan. Leverage is a two-edged sword.
Hmmm, so homes in Denver are appreciating at a greater than 5% annual rate because buyers won’t sell? Obviously there are more buyers then sellers, hence the sellers market, and to be quite frank, a booming real estate market in Denver.
Yes DJ, most move up buyers need to sell their current home before buying the next home. If they go out and look at the very few homes on the market that meet their needs, , they then decide they won’t list their current home. What would be the point of getting an offer on the current home and having no options that fit their needs. Hence they do nothing until more listing are avalible.
DJ-why do you think we went from having 23,000 single family homes on the Market in September of 2007 and fewer that 8000 today? I beleive it has to do with seller having lack of credit, lack of equity and lack of the ability to find a suitable replacement home? I would love to hear you reason for the big drop in homes for sale.
The reason is the lack of distressed homes on the market. Inventory always drops way down when the market improves. This market will mirror that of the ’90s. Prices will double, real estate investors will get rich, yada, yada, yada. It’s so obvious, yet there will be doubters all the way up, just like every other time. Then, when the market is about to cool off, most people will think the prices will never fall, another psychological folly.
Do you have any data to back up your claim” inventory always drops when the market improves” claim?