Case-Shiller: Denver homes up 9.9%



  • Case-Shiller releases September report.
  • Denver home prices up 9.9%, YOY.
  • Denver ranked 13th of 20 MSAs.

Case-Shiller.October-1Home prices in the Denver area rose by 9.9 percent in September from September 2012, as metro-area housing prices set a new high, according to the closely watched Case-Shiller report released today.

Denver ranked No. 13 of the 20 MSAs tracked in the S&P/Case Shiller Home Price Indices, which overall showed a 13.3 percent year-over-year gain.

Lane Hornung, CEO of 8z Real Estate, said today’s report showed very solid numbers for Denver.

“Our market is consolidating the double-digit price gains we’ve seen this year,” Hornung said. “The market is digesting the reality that a home that would have sold for $300,000 at the beginning of 2013 now sells for $330,000. Pricing ahead of where of the market is, at say $345,000, is probably not going to fly in today’s market. We’ve moved from the frenzied market this summer in which sellers could price to where the market was going to what I would describe as a very solid market where sellers just need to price in today’s market. That said, we continue to see stronger buyer activity resulting in more sales than typical at this time of year.”

September was the 21st consecutive month that home values rose from the same month from a year earlier in the Denver area.

Las Vegas led the nation with a 29.1 percent increase.

Local Realtors, however, have no desire to see Denver to show the kind of gains Las Vegas and other formerly beaten-up housing markets are now experiencing.

Instead, they are thrilled where Denver’s market is today.

Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado, said that the kind of appreciation Las Vegas is experiencing is not sustainable.

“We are far off better being where we are than where Las Vegas is,” Mygatt said.

Also, despite the meteoric rise of home prices in Las Vegas, “they still have ground to gain,” from their previous high, while Denver has surpassed the levels during the previous boom of 2006s-2007, he noted.

“Although it is true we had a housing bubble all across America, we just kind of skated through it, compared to other markets like Las Vegas and Phoenix, which were just devastated,” Mygatt said.

Denver is no roller-coaster market

“It shows that we are a more sustainable market than these roller coaster markets,” Mygatt said.

The Denver market, he said, stalled a bit in mid-August, as interest rates briefly rose and then continued to be strong on through October.

“The momentum really continued until about last Thursday and now we are seeing the normal, seasonal slowdown,” Mygatt said.

“We had a very strong fall a year, and I think a lot of people were wondering if we could match it this year, and we are surpassing it,” Mygatt said.

“I think there is a certain level of confidence from consumers in Colorado regarding real estate,” he continued.

“I think that is because our employment has been strong. We are in a job-driven industry. When people feel good about their jobs and job security, they will make big purchases like buying a home.”

Peter Niederman, CEO of Kentwood Real Estate, said the today’s Case-Shiller report “just continues to amaze me.

“It goes to show you the Fed has been very kind with interest rates, which has helped housing affordability and led to people seeing value in buying real estate,” Niederman said.

However, he agrees with almost all economists and other market watchers that the Fed will slow its $85 billion in monthly bond purchases at some point next year, which will lead to rising rates.

Just the talk of easing the Fed’s buying spree caused rates to rise to about 5 percent earlier this year for a 30-year mortgage, before falling to the low to mid 4s, he noted.

Banking on rising rates

“While rising rate creep will provide a bit of a headwind, I totally disagree with pundits who say if rates rise to 5 percent, it will cause real estate to come to a complete standstill,” Niederman said.

He noted that there is currently about a three-month supply of unsold single-family homes in the market, and a six-month supply is considered a balanced market.

Denver was one of the first markets in the country to exceed pre-recession home prices.

“That shows there is some value to be one of the first markets to enter the recession and to be one of the first markets to come out of it,” said independent broker Gary Bauer.

Today’s Case-Shiller report reaffirms that “the American Dream of home ownership is alive and well,” Bauer said.

“I recently saw a headline that said the American Dream of owning a home was higher than it has been in years and that includes people who are currently renting,” Bauer said.

He said that he expects Denver will experience a strong December for home sales, “but I’m not sure how strong it will be.”

Steve Blank, a broker with Fuller Sotheby’s International Realty, said Denver should not envy the type of appreciation Las Vegas has been experiencing.

“That should not what we should be looking for in Denver,” Blank said. “I really think we are potentially going to see a very healthy, balanced housing market in Denver for the next year. I don’t see anything that is going to make it crazy good or crazy bad.”

National spotlight

Meanwhile, the overall nation’s housing market is on a roll.

“The second and third quarters of 2013 were very good for home prices,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices

“The National Index is up 11.2 percent year-over-year, the strongest figure since the boom peaked in 2006,” Blitzer continued.

“The 10-City and 20-City Composites year-over-year growth at 13.3 percent was their highest annual numbers since February 2006.

“Twelve cities posted double-digit annual returns,” he noted.

In addition to the 29.1 percent gain in Las Vegas, San Francisco is up 25.7 percent, Los Angeles is up 21.8 percent and San Diego rose 20.9 percent, he noted.

“San Francisco and Los Angeles showed their highest annual returns since March 2001 and December 2005,” Blitzer said.

He doesn’t fear a bubble, however.

“The strong price gains in the West are sparking questions and concerns about the possibility of another bubble,” Blitzer said.

“However the talk is focused on fear of a bubble, not a rush to join the party and buy,” he said.

“Moreover, other data suggest a market beginning to shift to slower growth rather than one about to accelerate,” he said. Existing home sales weakened in the most recent report, home construction remains far below the boom levels of six or seven years ago and interest rates are expected to be higher a year from now, he said.

“ Housing continues to emerge from the financial crisis: the proportion of homes in foreclosure is declining and consumers’ balance sheets are strengthening,” Blitzer said. “The longer run question is whether household formation continues to recover and if home ownership will return to the peak levels seen in 2004.”


Metro AreaChange from January 2000August to September Change1-Year Change
Las Vegas25.74%1.3%29.1%
Los Angeles112.83%1.1%21.8%
New York73.45%0.6%4.3%
San Diego93.51%0.9%20.9%
San Francisco79.91%0.8%25.7%
Washington, D.C.105.25%0.7%7.0%
Composite 1080.03%0.7%13.3%
Composite 2065.66%0.7%13.3%

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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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