Denver-area real estate experts are not surprised that the local real estate market wildly out-performed the vast majority of the 20 metropolitan areas tracked by the S&P/Case-Shiller report released today.
As I reported in an earlier blog today, the widely followed index showed that in August Denver was second only to Dallas, with the markets showing a 1.9 percent and 1.2 percent drop, respectively.
The entire composite of the 20 cities, although improved from previous months, still showed a double-digit drop, losing an overall 11.3 percent.
“I tell all of my clients that we are in one of the best markets in the country,” said John Skrabec, co-owner of Live Urban Real Estate in Denver.
Byron Koste, head of the CU Real Estate Center, in Boulder, agreed.
“I think it shows that by not over-doing it as much as others did, our overall pain was comparatively less,” Koste said. “It is still painful for those who had to pay the price. But as home buyers in other cities can tell you, it could have been a lot worse.”
For example, in August prices were down 29.9 percent in Las Vegas, 25.1 percent in Phoenix, and 18.8 percent in Miami.
“And people in Miami would tell you, “Baloney. It’s a lot worse,” Koste said.
Koste said the most surprising part of the report was that Dallas was No. 1.
“I guess I am a little surprised by Denver being No. 2 to Dallas,” Koste said. “Dallas being No. 1 was a bigger surprise. I’m surprised they did as well as they did. I think unfortunately, that shows the strength of the petro-chemical industry. The Dallas-Fort Worth area is not a vacation spot, so they were not as glutenous as far as building as Phoenix, and California and Nevada and Florida.”
Independent real estate broker Gary Bauer agreed with others that it was no surprise how well Denver performed.
“We have done very well in maintaining our market,” Bauer said. “There is no real overall price appreciation, other than in some niche markets, where we’re still seeing a little appreciation. ”
Jim Nussbaum, a broker with the Kentwood Co., reinforces the Pew Research Center poll early this year that found Denver was the top big city where people wanted to live, according to the 2,260 adults it polled.
“I still go back to that study,” Nussbaum said. “Everybody who comes here, really likes it here. We haven’t gone up as fast as other places, but we have not come down as much, either.”
Nussbaum said that in Denver, as elsewhere, a “disproportionate” of the sales are occurring in the lower-price range. A large part of that is being driven by the $8,000 federal tax credit, due to expire at the end of November.
“But we are starting to see some cracks in the $1 million range homes, too,” he said.
Nussbaum noted that he is listing one home that started at $985,000, and the owner agreed to reduce the house to $919,000. It had been listed at even higher prices by other brokers in the past.
“There was a guy who had been watching this house for a couple of years, since the builder first completed it,” Nussbaum said. “He made an offer right away, and we made a very reasonable counter-offer. He didn’t accept it, and we put it under contract this weekend to another buyer.”
Skrabec said that despite the overall market’s drop of 1.9 percent in August, there are pockets of strength.
“In the 80211 ZIP Code (in northwest Denver), I would say that homes have appreciated 3 percent to 5 percent this year. The Highland market, especially at the lower-end, was quite strong this summer. It’s basic supply and demand. I would say another strong market is City Park. I think Highland and City Park are the two strongest markets in the Denver area.”
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.