Denver home prices highest between coasts


  • RealtyTrac: 24% of sales in Denver area were all-cash purchases.
  • Median price in Denver MSA was $250,000.
  • Construction defect liability keeping low-priced condos out of market.
This 760-square-foot row home sold earlier this month for $250,000.

This 760-square-foot row home sold earlier this month for $250,000.

The Denver-Aurora area had the highest price homes in the middle of the country at the end of July, according to a national report released today.

The report by RealtyTrac also shows that 24 percent of the homes sold in July in Denver were for all cash.

While that may seem like a lot, it is far below the national average of 40 percent all-cash purchases.

The median price of a home in the Denver metropolitan statistical area was $250,000, according to the Irvine, Calif.- based real estate data company.

Only cities on either coast and Honolulu were more expensive.

Denver was the 10th most expensive city of the 58 MSAs tracked in the report.

Of the top 10 most expensive cities, half of them were in California, with the San Jose MSA leading the pack with a median price of $640,000.

U.S. median price $174,500

The median price in Denver was 43.3 percent more than the national median sales price of $174,500.

In Denver, prices rose by 2 percent from June and 11 percent year-over-year.

Nationally prices rose 4 percent from June and 6 percent from July 2012, marking the 16th consecutive month in which median prices nationwide have increased annually after bottoming in March 2012. according to RealtyTrac.

Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado, despite the report, said that home prices are affordable in Denver.

“Home prices are less expensive in Denver than in most major cities,” he said.

“Denver prices are less than in Chicago, for example,” he said.

Although the RealtyTrac report disagrees, as it places the median price at $182,000 in the Chicago MSA, Mygatt does have a point.

RealtyTrac uses Census blocks to define the MSAs. The Chicago MSA not only captures home sales in the Windy City, but in Naperville, Joliet and ner the Indiana and Wisconsin borders.

Such a wide geographic swath includes a large range of home prices.

In Naperville, for example, the median price of a home is about $350,000, while it is about $110,000 in Joliet. In Wilmette, a suburb near Chicago’s North Shore, the median price of a home is approaching $600,000.

Denver has long held title 

In any case, Denver has long been the most expensive city between the coasts, said Tom Clark, CEO of the Metro Denver Economic Development Corp.

“We have held that position for a number of years now, if you can call it a problem,” he said.

The good news is that Denver home values endured the Great Recession probably better than any major city in the country, he said.

“We lost maybe 4 percent of our value during the Great Recession, while Vegas lost 43 percent and Phoenix lost 38 percent, or whatever,” Clark said.

Except during the go-go days of 2006-2007, Phoenix always had lower home prices than in Denver.

Even with the recent appreciation in Phoenix, home prices there are still well below what they cost in Denver.

“We tell companies looking at Phoenix and looking at Denver, yes, our prices are higher, but you won’t have to worry about losing 38 percent of your value,” Clark said.

“They tell us, yes, that is true, but people still have to be able to afford their mortgages and cash flow,” he said.

Also, he recently was talking to officials in Omaha about moving businesses to Denver, “and they really suffer sticker shock when they look at our prices.”

Below the surface, an endemic problem lurks

However, the high home prices in Denver also reflects a more fundamental, but less obvious problem with Denver housing, he said.

“There are no starter condos being built in the metro area because of construction defect liability concerns,” Clark said.

“No. 1, that deprives many young people of a low-priced option, when single-family detached homes are expensive,” he said.

“Most of us build our wealth over time through home ownership and that is hard to do if there is no price point where you can start building equity and moving up.”

Also, it not good for society to have a nation of renters, he said.

“If you talk to the sheriffs in the seven-county area, they will tell you they spend 80 percent of their time on responding to calls to rentals, as opposed to owner-occupant homes,” Clark said.

“If you look at FasTracks, all the housing being built at light rail stops is rental,” Clark said.

“That means all the people living in these TODs (transit-oriented developments), are transient people. There will be no one living in TODs who want to invest in their properties and set down roots.”

Meanwhile, Mygatt said he was surprised by the large number of cash buyers both in the Denver area and across the country.

The report shows that 6 percent of the sales in July in Denver were by institutional investors in July, while nationally institutional investors accounted for 9 percent of all sales.

“It makes sense we have fewer all-cash buyers, since we have fewer institutional buyers, and those buyers often pay cash,” Mygatt said.

A big part of the reason for rising prices in Denver and across the country has been the low inventory.

In Denver, the inventory homes of unsold homes hit an all-time low in March, but has been growing in recent months.

Double-edge sword

“Low inventory of homes available for sale is proving to be a double-edged sword in many local housing markets that have bounced back quickly from the real estate slump,” said Daren Blomquist, vice president at RealtyTrac.

“Home prices are accelerating rapidly in these markets thanks to the combination of low supply and strong demand,” Blomquist continued. “However, counter to the national trend, sales volume in these markets is down even as the percentage of cash sales rises, indicating there is still strong demand but that buyers who need financing to purchase are increasingly left out in the cold.”

Also, mortgage rates have risen from an all-time low of about 3.3 percent for a 30-year fixed rate, to a bit north of 4.5 percent.

“The recent uptick in interest rates could also be contributing to a higher percentage of cash purchases as some non-cash buyers can no longer afford to buy, particularly in high-priced markets,” Blomquist said.

Metropolitan Statistical AreaMedian Price
San Jose$640,000
San Francisco$565,000
Los Angeles$450,000
San Diego$405,000
New York-Northern NJ$372,000

Source: RealtyTrac

Have a story idea or real estate tip? Contact John Rebchook at 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.



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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. Huge difference in real-estate taxes.
    “In Naperville, for example, the median price of a home is about $350,000″ with taxes of $5-7K.
    In Denver $2-2.5K.

  2. Excellent update. Historically sales slow down at this time of the year due to back to school and children activity preparation for the new school year.
    Supply remains low. Interest remains high.
    Parade of Homes traffic is excellent! Get out today to enjoy the 71 homes!
    ONwards and UPwards!

  3. Yes, we are in the midst of an excellent bull market in Denver. DOM in the mid 30s. Reminds me of the ’90s. (Remember we saw prices double in Denver during that bull market).

    • You are right DJ! As I drive down Colorado BVD, I see an endless supply of new retail strips filled with new and old fast food restaurants chains. I read last week that Colorado has the highest number of fast service restarants per capita in the US. That means Colorado also must have the highest number of fast food employees in the US, as well. Much more important than the 19,000 new restarants and retail jobs created in Colorado last year is the wages of the 3,000,000 people working. These wages went up on 2.7% last year. Since you think the inflation number reported is a lie, real wages in your opinion must be down quit a bit. I don’t see how negative real wage growth will foster the “New American Dream” of being able to move out of your parents basement, finding 3 roommates and renting a place to live. I know it’s the definitely the dream of the parents running the dorm room.

      • More workers mean more renters and increasing prices no matter how you slice it. Let the boom times roll! (until the dollar fails, then only those with hard assets won’t be completely wiped out)

      • With money market funds earning savers only .25%. . . Not a big surprise there are so many all-cash deals.

        But I believe “FINANCING SELLS REAL ESTATE”.

        I have attached a “LOWEST DOWN” Loan Options presentation for Denver-metro Home Buyers. Example sales price is $200,000

        Buyers can use the MMA Down Payment Grant of 4% (of Sales Price) to cover all of the 3.5% Down needed for an FHA purchase loan.

        Most important these days, Buyers still need a good stable job (income) and about 2% additional cash to cover remaining loan closing costs.

        I offer the MMA 4% Grant program
        . . . Call Me @ 303-981-3793

        TOM MILLER
        Sr. Loan Officer
        Universal Lending Corporation – Denver

          • Spammer? You talking to me? Really?

            Universal Lending Corporation is a co-sponsor on this blog.

            So adding info and help regarding local real estate financing is spamming? Really?

            Well as the kids say. . . “Whatever”

            Home Loans Made Easy . . . since 1981
            * We will always be a responsible lender
            * We will help create successful homeowners

          • @DaveB

            Refinances are down 60-70% from the peak. Big banks are eliminating many mortgage unit jobs. Tom’s pipeline is not like it use to be(I sure he will tell us he has never been so slammed). But in any case, universal does pay John R, so he should be able to advertise.

        • Sellers in this market would love to see this type of financing show up on a contact. I’m sure they will take some FHA zero down loan over a cash deal or 20%+ down. In sure RE agents can’t wait to get this type of buyer. They will get all kinds of practice writing offers and eventually when they get a silly “escalation clause” offer accepted, the appraiser can nix the deal.

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