Case-Shiller: Denver prices up 8.9%



  • Case-Shiller releases its November report.
  • Denver ranks 16th out of 20 MSAs.
  • Realtors glad Denver prices aren’t on a tear like in Vegas and Phoenix.

CSHomePrice_Release_0128-1Denver-area home prices rose 8.9 percent year-over-year in November, according to the closely watched Case-Shiller index released this morning.

Denver ranked 16th out of the 20 metropolitan statistical areas tracked in the S&P/Case-Shiller Home Price Indices, with only New York, Cleveland, Washington, D.C. and Charlotte showing lower year-over-year gains.

The composite appreciation for the 20 MSAs was 13.7 percent.

Denver showed the lowest year-over-year gain since December 2012, when prices rose by 8.5 percent.

“November’s numbers show some moderation,” said Lane Hornung, CEO of 8z Real Estate.

“Year-over-year gains are falling off the double-digit gains of the summer back to the 5 percent to 10 range,” Hornung said.

He said he expects the “Case-Shiller index work its way down toward 5 percent year-over-year gains as we move into the 2014 spring market. That said, if we don’t see an influx of new listings in the coming weeks and months, prices may edge back up toward double-digit appreciation rates as buyers compete for limited supply.”

However, Hornung and other Realtors are pleased by an almost 9 percent increase.

In other words, there is no Phoenix-envy.

“In hindsight, I only wish I had gone down to Phoenix a few years ago and bought homes as an investment,” said Ty Dokken, of Metro Brokers.

The 16.7 percent gain in Phoenix, or the 27.3 percent gain in Las Vegas, is not something he or other Realtors would welcome in Denver.

“I don’t see that as being desirable or sustainable,” Dokken said. “I don’t see that as healthy. They just lead to volatility.”

He said he is pleased how the Denver-area housing market is performing.

“I’m still very bullish on the Denver market,” Dokken said.

“Not just for now, but over the next 10 or 20 years,” he added. “Denver will continue to attract a bunch of young, educated kids moving here, who will be driving the city. Denver will remain one of the cool and fresh cities for the long-term.”

Dave Pike, with Coldwell Banker in Lakewood, however, isn’t so sure.

“There doesn’t seem to be the urgency of people in their 20s to buy a home and get into the game,” Pike said.

“It’s one of those dominoes that I just don’t know how is going to fall,” he said.

And young professionals today want to buy homes in trendy neighborhoods such as downtown and Highland, even though they could buy much bigger homes for less money in the suburbs.

Also, with so many upscale, urban apartment buildings under construction, many young professionals are renting rather than buying, he said.

As far as Case-Shiller, Pike said the November numbers reflect the pipeline of sales that started in the middle of the summer.

“Personally, right now I think we are seeing pretty much of a slowdown,” Pike said.

“I know listing among the 100 agents in our office are way down and mortgage applications are down,” he added.

He said he has sold all of his listings.

“Right now, it all boils down to the inventory,” he said.

“People are concerned if they list their homes and they sell very quickly, are they going to live in their car? It’s not as easy to find a townhome you can rent for six months until you decide where you are going to buy.”

The recent big drops in the stock market also has hurt consumer confidence when it comes to buying a home, he said.

Asked if he thinks this is a typical, or more pronounced seasonal slowdown, Pike said that is not how he looks at it.

“I look for momentum,” he said. “Any sales you see in March, really started to germinate in December. I don’t see a lot of momentum right now. I think demand is slowing, but not to the extent that we are not seeing enough new homes coming on the market.”

In other words, the lack of supply is more of a problem than a lack of demand.

It is amazing that Denver homes could rise by 8.9 percent and only be in 16th place, said Peter Niederman, CEO of Kentwood Real Estate,.

“That is staggering when you think about it,” Niederman said. “It is very ironic. Go back a couple of years ago and 8.9 percent easily would have put us in the top five.”

Still, he is glad that Denver is not experiencing the red hot markets of the West Coast and cities hard hit during the downturn, like Phoenix and Las Vegas.

“We recently had an all-company meeting and I told our brokers that double-digit appreciation isn’t sustainable, and even if it was, we wouldn’t want it,” he said. “We need housing affordability, whether it is for young people buying their first home, people transferring here from other states, or retirees who want to be close to their grandchildren.”

However, like other Realtors, he is concerned about the lack of inventory, estimating that there is only a 2.5-month supply of unsold single-family, detached homes on the market.

“I think people get confused about inventory levels and homes coming on the market,” Niederman said. “I think far more homes are coming on to the market than many people realize, but they are selling as fast as they are hitting the market. The sales velocity is out-pacing the inventory.”

Chris Behrens, a broker-owner with the New Era Group in Denver, said based on what he is experiencing on the street, was surprised that Case-Shiller didn’t show more appreciation in November.

The Case-Shiller report, he said, is looking at the market from a “macro-level, from a 100,000-foot viewpoint. All real estate is hyper-local these days.”
 He said for productive brokers who are talking to buyers and seller every day, the market remains incredibly strong.

“That is where the rubber meets the road,” Behrens said.

He said there are fewer homes on the market this January than a year ago and the seasonal slowdown is less pronounced.

“I think we are having a slower start, but not a slow start,” Behrens said. “If you imagine a linear graph on a chart, we are going to see a big spike in about six to eight weeks. It will be shaped like a hockey stick. We are quickly going to accelerate from 30 mph to 80 mph.”

He said if he puts a home under contract in a trendy area such as LoHi or Cherry Creek, other Realtors still call him asking if the contract is solid, as they have a buyer for the home if that deal collapses.

Behrens also continues to see strong demand from out-of-state buyers, especially from Texas.

“All of the Texas buyers are in energy,” he said. “They are either in oil or gas or involved in something ancillary to the energy business.”

Monday evening, he wrote an offer for a Texas couple that must move back to Houston, after living in Westminster that he sold them two years ago.

He sold that home, priced around $350,000, through a “pocket listing” that wasn’t listed in the MLS.

“I suppose there is good and bad with not having a home in Metrolist,” when it first hits the market, noting it can sometimes reduce the stress for the seller.

In today’s market, one of the first things he routinely addresses is what happens if the home sells quickly.

“We work that into the business plan,” Behrens said.

“Even now, it is not unusual for a home to sell in a day or in matter of days. I tell my sellers don’t be surprised if the home sells in a day and don’t be surprised if it takes 30 days.”

Independent Realtor Gary Bauer said Denver’s No. 16 rank on Case-Shiller is no cause for concern.

While November activity was down from October for seasonal reasons, overall, the market is showing less of a seasonal slowdown than is typical, he said.

“One month does not a year make,” Bauer said.

“Overall, when you do a year-end review, 2013 would have to be considered the best year ever.”

Meanwhile, most cities in the Case-Shiller index could boast of experiencing the best November since the go-go days prior to the Great Recession.

“November was a good month for home prices,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

“The 10-City and 20-City Composites showed their best November performance since 2005,” he said.

“Prices typically weaken as we move closer to the winter. Las Vegas, Los Angeles and Phoenix stand out as they have posted 20 or more consecutive monthly gains.

“Beginning June 2012, we saw a steady rise in year-over-year increases,” Blitzer continued.

“November continued that trend with another strong month although the rate of increase slowed. Looking at the year-over-year returns, the Sun Belt continues to push ahead with Atlanta, Las Vegas, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Tampa taking eight of the top nine spots. Detroit continues to recover but remains the only city with prices below its 2000 level.

“Home prices continue to rise despite last May’s jump in mortgage interest rates. Mortgage applications for purchase were up in recent weeks confirming home builders’ optimism shown by the NAHB survey. Combined with low inflation — 1.5 percent in 2013 – home owners are enjoying real appreciation and rising equity values. While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year.”

Metropolitan AreaChange from January 2000October-November1-Year Change
Dallas 32.56%0.1%17.3%
Las Vegas28%0.6%27.3%
Los Angeles114.79%0.1%21.6%
New York72.54%-0.4%6.0%
San Diego94.15%0.0%18.7%
San Francisco80.19%0.4%23.2%
Washington, D.C.103.71%-0.3%7.8%
Composite 1080.15%-0.1%13.8%
Composite 2065.80%-0.1%13.7%

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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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