This 1,664-square-foot home near Washington Park is on the market for $459,900.
Denver-area Realtors cheered the Case-Shiller report released today and said that rising home prices, increased demand from buyers and even bidding wars are trends that are likely to continue.
As reported earlier today by InsideRealEstateNews.com, the closely watched S&P/Case-Shiller Price Indices ranked Denver No. 5 out of the 20 metropolitan statistical areas it tracks, as of August.
The report, which always lags the calendar by about 60 days, shows that Denver has been in the top five metro areas for 16 consecutive months.
The 5.5 percent year over year gain was the eight month of improving percentage increases. It also was the biggest percentage increase is more than 10 years. The last time it was higher was when prices increased by 5.7 percent in January 2002.
“Once again, it shows the strength of the market,” said Gary Bauer, an independent Realtor who prepared his own local monthly report based on Metrolist data.
“The strength of the market speaks for itself,” Bauer said. “The market continues to roll forward. We’re seeing an increased number of multiple offers on the properties and many homes are going under contract in 30 days are less.”
With the presidential election only a week away, Bauer and other Realtors said they expect that buying activity could get a bit of a bump, post-election.
“I think the election has distracted many people on many things, looking for a home being one of them,” Bauer said.
Charles Roberts, an owner of Your Castle Real Estate, said being ranked in the top five by Case-Shiller is becoming routine, but not something he is tired of.
“We have been in the top five for as long an I can remember, so this is nothing new,” Roberts said. “It is incredible. It is great.”
Roberts said that a number of factors, including the lack of inventory, increased demand and consumer confidence, and historically low mortgage rates, are driving up prices.
“We started Your Castle eight years ago and we had our best month ever in September,” said Roberts, who was stranded in Logan Airport in Boston, thanks to super-storm Sandy. “That is not supposed to happen. June and July are always your best months. We’re not unique in this. A lot of brokerage firms had Septembers that were just off the charts.”
He said closings at Your Castle were up about 80 percent from closings in September 2011 and strong activity continued through October.
“As long as we have fewer than 10,500 homes on the market, I think we are going to continue to have a good market,” Roberts said. “I honestly can’t believe more sellers aren’t putting their homes on the market. We are trying to get the word out that it is a great time to be listing your home.”
It’s not just the lower-priced homes that are selling, he said.
“Anything below $200,0000 is selling quickly, of course, but $500,000 homes are flying off the shelf,” Roberts said.”I can’t believer that I can say that, but it is true.”
Dan Polimino, who with partner Gary Lohrman heads the luxury division of Keller Williams in the Denver Tech Center, called Colorado Dream House, said some buyers “think this is still 2009 and they are going to find screaming deals. I tell that they are 18 months too late.”
Polimino said that a lot of consumers were skeptical when he other brokers said that qualified buyers who didn’t take advantage of low prices from 2009 to 2011 would later kick themselves.
“A lot of people just thought that was Realtor-speak,” Polimino said. “They thought we were just trying to get another sale. They forget that we work this market seven days a week and some of us live and breathe the market 24 hours a day, so we know what we are talking about.”
He said there are still some luxury homes in the suburbs that are still selling at fire-sale prices, but even those are disappearing quickly.
Looking back, he said based on Metrolist data, it is clear that the market hit bottom in February or March of 2011 and has been on the upswing ever since.
He said the Denver area had all of the ingredients of a robust housing market, save one.
“Some people think our recovery seems a bit false and the market is going to pull back,” he said. “If jobs came roaring back, the housing market would really take off. We have everything else. Incredibly low interest rates. A sound banking system. Banks are flush with cash and they are not in jeopardy of failing. The law of supply and demand, which is driving up prices. All we are lacking is more good paying jobs.”
Jim Wanzeck, of RE/MAX Masters, said that new home builders in the metro area have increased the pace of their construction to help make up for the 30 percent-plus drop of resale homes on the market.
“My understanding is that Richmond Homes has put 350 foundations in the ground, so they can really ramp up their game next year,” Wanzeck said. “And that’s just Richmond. I think the biggest challenge next year will be the lack of inventory.”
Richmond Homes is owned by Denver-based MDC Holdings Inc., one of the nation’s largest home builders.
Regina Jackson. or “Action Jackson” of Metro Brokers, said the Case-Shiller numbers reflect what she is seeing, especially in Stapleton, where she specializes.
“My son and daughter-in-law have a home in Stapleton and they are always telling me that when a neighbor puts a home in a market it is sold within two or three weeks. A good home priced right goes fast in the overall market and I think Stapleton is one of the fastest selling communities for single-family homes. Condos take a little longer to sell.”
Peter Niederman, CEO of Kentwood Real Estate, said he is glad that Case-Shiller report shows that other market are improving.
“I think Denver is 12 months ahead of the rest of the country,” Niederman said. “We started seeing a shortage of inventory a year ago, while other markets have just started experiencing that recently. Denver has been very stable and steady. We’re not like Phoenix, which is up almost 19 percent, after experiencing huge drops during the real estate crisis.”
Niederman said that he wouldn’t even mind if Denver fell off the top five list.
“It’s great if you live in Denver and we are one of the best markets in the country, but to have a truly sustainable recovery, it is something we need to see happening in cities across the country,” Niederman said.
Niederman said that there are so few homes on the market in Denver that he would welcome the so-called “shadow market” of homes being held by lenders, but aren’t yet for sale.
“To any extent that these shadow homes are coming online, clearly we have been absorbing them,” Niederman said. “And since bank-owned properties have been selling for about 30 percent under market-rate homes, even if banks dumped a lot of them on us at once, I think there are enough investors and consumers out there who want them, so all it would do is slightly depress the prices of the overall market.”
Niederman said he is bullish on the local and national housing markets, whether President Obama is re-elected or if he is defeated by Mitt Romney.
“I think housing is going to do well with either candidate winning,” Niederman said. “For the housing market to do well, we need more jobs. Bringing down the unemployment rate and creating more jobs is going to be a priority of whoever wins.”
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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%
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.
Last month I reported that I had put 4 properties into the Denver/Boulder MLS in September, all 4 four were under contract within a few days. One property did not appraise at the contract price of $123,000, they said it only appraised at $103,000 and they wanted me to lower my price. I laughed and relisted at $125,000, had two more offers in a few days (in addition to the 5 offers I had received previously), one of the new offers was all cash, I closed on that contract last week at $124,000. Two of the others closed, one the buyer could not get financing, put it back on the market and had two more offers with in a week, scheduled to close in two weeks. I did not put any properties on the market in the Denver area in Oct.