Case-Shiller: Denver home values rise 6th consecutive month

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Denver-area home prices rose an average of 4.4 percent in April from April 2009, marking the sixth consecutive month of year-over-year gains, shows the closely watched S&P Case-Shiller Home Price Indices released today.

The 4.4 percent gain was the largest since the trend began in November 2009, when prices were up 0.5% from November 2008. Each month, the percentage gain has grown.

Still, the 4.4 percent was only good for eighth place of the 20 metropolitan statistical areas tracked by Case-Shiller, as other markets, which previously had shown greater losses than Denver, are now enjoying greater percentage gains. San Francisco showed the biggest gain, rising a whopping 18 percent from April 2009.

Increases may continue

“I think the increases are sustainable,” said Gary Bauer, an independent broker who completes his own monthly report using Metrolist data.

The Denver market, as the nation as a whole, was helped in April as buyers and brokers scrambled to put homes under contract by April 30 to quality for a federal tax credit worth as much as $8,000.

“I think we are going to see much lower increases going forward,” Bauer said. “I do think the Denver market should get a lot of credit for six continuous months of year-over-year increases. But I do think the tax credits helped Denver and every other market in the country. I do think the trend is continuing, but at a much smaller proportion.” Qualified buyers who are seeking the tax credits have until the end of Wednesday to close on the homes.

May figures will be telling

But Tom Cryer, a broker withe the Kentwood Co. is not so sure how sustainable the entire home sales market remains in the wake of the end of the tax credits.

“I can tell you my first response is, “I can’t wait until we see the May figures,” Cryer said. “That will be the end of our six-month run. Absolutely. The front desk is all-knowing and all-seeing. We all have had fewer showings since April 30 and if you don’t have any showings, you don’t have any contracts.”

On the other hand, because Case-Shiller tracks appreciation, and not the number of sales, the end of the tax credits could bode well for Denver, he said. Case-Shiller uses “paired sales” of single-family homes to avoid the “price drift,” or the potential of bigger homes entering the market and skewing the data.

Low-priced homes no longer driving market force

“If you figure that the tax credits did not impact the move-up or move-down market very much, but primarily had an impact on the low-end of the price range, now, moving forward, those people at the lower-rung of the market, no longer have incentives to be part of the market,” Cryer said. “Could that mean that as we go forward, the bottom of the market has been taken away? Here is my updated prediction: The average price of a home cold go up, now that the bottom has been taken away, but the number of transactions will go down.”

Also, with fewer transactions, big sales will have a disproportionate impact on the overall numbers, he said. For example, a broker in his office recently put a home under contract for $2.8 million, which previously had been listed at $5 million.

“One $2.8 million sale makes up for a lot of $150,000 transactions,” Cryer said.

Case-Shiller doesn’t tell you what your home will fetch

Cryer said that while reports such as Case-Shiller “make for interesting conversations and I love to hear about and discuss this kind of stuff,” the truth is that it has little to do with what any individual can fetch for his or her home.

“Real estate is still a Main Street kind of business,” Cryer said. “Clearly, we have some blocks and enclaves in the Denver area that are just still performing very poorly. And we have other enclaves that are so hot you can drive through them and hardly see a For Sale sign. It’s all about “location, location, location,” while 60 days ago it was “timing, timing, timing,” when the the tax credits were still available.

Stephen Holben, a custom home builder, agrees with Cryer that real estate is very local

“As I have expressed before, (Case-Shiller) has nothing to do with the value of anybody’s property,” said Holben, principal of Holben Building Corp. “But it has been embraced as though it does, so what can you do? If it helps people function again, post on a billboard. I’ve been in this biz for almost 40 years, and I’ve never seen people behave as they are these days. We’re into year six of what I call The Great American Housing Beatdown.”

On a national level, “Home price levels remain close to the April 2009 lows set by the S&P/Case Shiller 10- and 20-City Composite series,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The April 2010 data for all 20 MSAs and the two Composites do show some improvement with higher annual increases than in March’s report. However, many of the gains are modest and somewhat concentrated in California. Moreover, nine of the 20 cities reached new lows at nsome time since the beginning of this year. The month-over-month figures were driven by the end of the Federal first-time home buyer tax credit program on April 30th. Eighteen cities saw month-to-month ngains in April compared to six in the previous month. Miami and New York were the two that fared the worst in April compared to March. New York is the only MSA to have posted a new relative index lows  with April’s report. Other housing data confirm the large impact, and likely near-future pullback, of the federal program.” He added that May data separate from Case-Shiller shows a “sharp declines in existing and new home sales and housing starts. Inventory data and foreclosure activity have not shown any signs of improvement. Consistent and sustained boosts to economic growth from housing may have to wait to next year. ”

Metropolitan AreaChange from January 2000 Change from March to April1-Year Change
Las Vegas-4.4%0.5%-3.2%
Los Angeles69.07%0.5%-3.2%
New York64.96%0.7%-3.2%
San Diego54.78%0.2%-5.1%
San Francisco34.42%1.8%-5.4%
Washington, D.C.84.9%2.4%1.3%

MonthYOY Change
November 20090.5%
January 20102.6%
April 4.4%

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for, covering commercial real estate for the Internet publication.

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  1. Listen to Cryer. He was a designated residential appraiser prior to that occupation being largely forced out and replaced by artificial intelligence (BPOs & AVMs). Bankers love ’em because they’re cheap; they’re wildly unreliable. What does it matter when it takes 2 – 3 months to close a loan AFTER the appraisal is in?
    Many neighborhoods have declining markets with as much as 50% of the sales activity involving REOs (HUD, FNMA, bank) and short sales.
    Unfortunatley many of the cubicle bunnies (underwriters, review appraisers, “managers”) put lots of emphasis on Case-Shiller in lieu of being actual students of the market.

  2. It’s odd that in all the hyperbolic bloviations that have gone on for over 5 years about the “value” of houses there’s never been anything said about the cost of building them, and how that relates to value. If people don’t value homes for at least what it costs to profitably build them, there will be a shortage of homes (in an expanding market like Denver.

    • Don’t worry Steve, the market will correct the inventory imbalance with lower imput cost. Land is now selling for 30 cents on the dollar from the 2006 highs. With the unemployment rate at 10% labors cost will drop. We will not need to see home prices rise in order for builders to build. The reason the builder are not building now is, there is no final demand for new homes. Simple supply and demand.

  3. […] Case-Shiller: Denver home values rise 6th consecutive month – Denver-area home prices rose an average of 4.4% in April from a year ago – marking the sixth consecutive month of year-over-year gains, shows the latest S&P Case-Shiller Home Price Index.  The 4.4% gain was the largest since the trend began in November 2009.  Each month, the percentage gain has grown.  “I think the increases are sustainable,” said Gary Bauer, an independent broker who completes his own monthly report using Metrolist data.  “I think we are going to see much lower increases going forward.  I do think the Denver market should get a lot of credit for six continuous months of year-over-year increases.”  Read full article: […]

  4. It’s good to know Case Schiller is reporting an increase in values. What I see happening is a more confident consumer who wants to buy this year. They weren’t lining up last year, so if the confidence continues we will have a recovery.

    It’s so much nicer this year to have my telephone ringing with people who are anxious to move to Denver. Some are being transferred and others are making that decision on their own. They recognize the beauty and the opportunity in Colorado.

  5. Case Shiller reports data from April using a 3 month average in sales. This means, it’s an average for sale in Feb, March and April. These properties were most likely put under contract in Jan, Feb, March. This data is meaningless today. All the current data shows housing falling off a cliff. It’s amazing, you have the only agents in Denver with their phones “ringing off the hook” on this blog. Denver’s June pending home sale are even worse than May, which were down 40% from April. Soon all the data, including Case Shiller 6 month from now, will show how bad thing are. Don’t worry, I’m sure all your phones will still be “ringing off the hook”.

  6. A May drop-off was expected, however, the continued lowering of interest rates has the market moving seasonably within a narrowed range considering factors of unemployment & fear of unemployment.

    At these rates I expect sales to be strong albeit harder to close within still-tightening underwriting, higher down payment restrictions. I expect more non-conforming financing to gradually enter back into the marketplace especially when rates begin to rise.

    All that being said, expect a slightly upward path for sales & more normal seasonal sales until interest rates rise. When that happens, and there are two distinct schools of thought as to timing and cause of a major rise, sales volume will be completely axiomatic as to rates; ie, there is increased sensitivity to rates so a minor rise in rates will quickly dampen sales. A major rise in rates would shut the market down similar to the weeks after 911.

    This brief opinion regards only the Denver Metro area, Rural & Mountain areas are typically more severely affected by all limiting factors.

    – Real Estate Broker 36 years, Mortgage Lender 3 1/2 years, MBA-University of Denver 1986 –

  7. We have to stop dreaming about home values going up. No jobs = No increased home values. Until the economy turns around, people can not afford to buy homes. An increase home value without sound fundamentals will only lead to a new bubble.

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