The Denver-area housing market finished as the third best in two metrics for judging the health of 28 metropolitan by the Wall Street Journal.
Denver performed best in the rankings in the third-quarter report, titled Waiting for the Next McMansion to Drop, in the categories measuring the price change for the median price of a home at the end of September and the number of delinquencies and foreclosures. The S&P/Case-Shiller report released on Tuesday, also brought good news to the market, ranking Denver as No. 2 in August of the 20 cities it tracks.
“I sound like a broken-record talking to you about this, but I think that this definitely confirms that our expectation that the Denver housing market is improving a little than other parts of the country,” said Patty Silverstein, principal of the Development Research Partners and chief economist for the Metro Denver Economic Development Corp.
The overall median price of homes in the Denver area fell by 1.4 percent, according to the report, with only Boston, which showed a 2.9 percent increase, and Nashville, with a 0.8 percent decline, doing better. Las Vegas performed the worst, with home prices falling by 31.3 percent.
As far as delinquencies and foreclosures, 8.1 percent of the first-lien mortgages were 30 or more days delinquent or in foreclosure. The national average was 12.39 percent. Only Seattle and Portland, at 8.1 percent and 7.6 percent, respectively, fared better than Denver. The Miami-Ft. Lauderdale market was the worst, at 26.65 percent. Las Vegas was not far behind at 22.57 percent.
“On foreclosures and delinquencies, that they have improved so much, is good news,” Silverstein said. “But we are still a little concerned that another wave of foreclosure activity is coming from people who have not been able to secure new jobs just yet.
Denver also ranked quite well as far as the monthly supply, which measures the number of months needed to sell the current supply of unsold homes during the next 12 months.
Denver ranked No. 6 out of the 28 cities, with a 6.1 month supply of unsold homes. The drop in supply is encouraging, and will help drive up prices, Silverstein said.
“And when you consider that builders continue to build practically nothing, we expect that we will continue to whittle way at our housing supply, which will only help prices,” she added.
Sacramento was No. 1 with only a 1.9 month supply of homes, while Chicago was in last place with a 19.9-month supply.
Denver was in the bottom half in the other two categories – changes in the housing inventory and jobless rate.
Denver ranked No. 16 in the housing inventory category, showing a 15.5 percent drop from a year earlier of single-family homes, condos and townhomes. In Sacramento, the housing inventory plunged by 59.1 percent, the biggest drop of the 28 markets. New York showed the smallest decrease, wtih the inventory being reduced by only 2.5 percent.
Denver performed worst for the jobless rate, projected at 9.2 percent, for the end of the third-quarter. That gave it a ranking of 18th on the list.
It was also the most puzzling result.
“That doesn’t quite jive,” Silverstein told me. “If you look at August, it was 8 percent for just the City and County of Denver. It always ranks as one of the highest in the metro area. If you look at the metro area as a whole, it averages nearly a percentage point below Denver.”
The WSJ report ranked Washington, D.C. as having the lowest jobless rate at 6.7 percent, and Detroit having the highest at 15.7 percent.Overall, the report provides yet another bullish sign for the housing market, Silverstein said.
“The party line is that we are not out of the woods completely yet, but a lot of our indicators in the residential market seem to suggest that we are seeing a firming up activity, and, hopefully soon we will see a much better and more positive range of prices and some modest appreciation.”
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.