Case-Shiller: Denver home prices up 7.5%



  • Case-Shiller releases November report.
  • Denver homes ranked 5th.
  • Case-Shiller shows Denver homes gained 7.5%
Case-Shiller provides a snapshot of the market, nationally.

Case-Shiller provides a snapshot of the market, nationally.

Denver-area home prices rose by 7.5 percent in November from November 2013, according to the closely watched Case-Shiller index released today.

Denver 5th of the 20 major metropolitan statistical areas tracked in the S&P/Case-Shiller Home Price Indices report.

Home prices in Denver also marked the 10th consecutive month of record prices in November, according to the report.

Local real estate experts agree that the lack of inventory in  the metro area will keep prices high this year.

“I expect to see further increases in the index in the coming months based on how active the market has been this winter and our ever shrinking inventory,” said Lane Hornung, CEO of 8z Real Estate.

Hornung had called the trend of rising prices.

“Back in the fall, I said: “As we approach the end of the year, the question is not if our prices are going to drop; they’re going to keep rising. It’s whether our market will land in the 5 percent to 6 percent range, or if it will turn out to be a “touch and go” and the year-over-year appreciation rate will start to rise again.”

With demand strong and the inventory at record low levels, the answer is clear, he said.

“At this point, it’s clearly a touch and go, not a landing,” Hornung said.

“Prices are taking off again and climbing,” Hornung noted.

In fact, the Denver-area home market has showed a dramatic increase in a short period of time, he said.

“Year-over-year appreciation rates have jumped from 6.2 percent to 7.5 percent in just two months, according to Case-Shiller,” Hornung said.

Of the 20 MSAs tracked by Case-Shiller, none of them showed double-digit appreciation, year-over-year gains.

San Francisco was No. 1, with 8.9 percent and Miami was in second place, with a 8.6 percent gain, according to Case-Shiller. Dallas and Las Vegas were slightly ahead of Denver, with a 7.7 percent increase from November 2013, according to Case-Shiller.

“What this is telling me is that prices are moderating, which is a good thing,” said Peter Niederman, CEO of Kentwood Real Estate.

Still, the 7.5 percent gain for Denver, is a “bold” increase, he said.

Niederman: Affordability a concern

“If Denver prices fell back to 4.5 percent to 6 percent gains, I would be happy with that,” Niederman said.

“The one negative I could see for Denver is if home prices started to become unaffordable,” he said.

“I would be happy to see prices in Denver start to moderate,” Niederman added.

Case-Shiller shows another look at the housing market in November.

Case-Shiller shows another look at the housing market in November.

As it was last year, the biggest challenge facing the Denver-area market is the lack of inventory, he said.

“A lot of homeowners want to transact real estate, especially with 30-year mortgage rates still hovering around 4 percent,” Niederman said.

However, consumers fear selling their home so quickly that they have no place to move to, he said.

“They don’t want to make a double move,” Niederman said.

While nothing indicates that there is going to be an increase in the housing supply any time soon, he said eventually that will happen.

“Markets ebb and flow,” he said.

Denver housing to be in top 10

Independent broker Gary Bauer said today’s Case-Shiller report is the latest “great news” for the Denver market.

“Nationally, everybody is talking about how Denver will in the top 10 markets in 2015,” Bauer said. “If you look at how well we did in 2014, experts are forecasting that we will even be better in 2015.’

“We are moving into an amazing market,” Bauer said.

Indeed, the Denver-area market did not experience the typical seasonal slowdown in the fourth quarter, he said.

Blank: Smarter to buy than to rent

Rising apartment rents, as well a the lack of supply, are driving up the prices of homes below $500,000, said Steve Blank, a broker with LIV Sotheby’s International Realty.

“When you look at new apartment buildings in downtown Denver charging $2.50 to $3.00 or more per square foot, and with interest rates as low as they are, it just makes financial sense to buy,” Blank said.

Last year, the overall housing market rose about 6.5 percent, he said.

However, for the first time he can remember, condo prices rose by more than single-family home prices, he said.

He said condos rose by about 11 percent, while single-family home prices rose by 5.5 percent to 5.75 percent.

Condo construction defect litigation fears

Blank said construction defect litigation fears have kept the supply of new condos, especially at entry levels, artificially low.

“I know some people are saying developers aren’t building condos because the demand isn’t there, but the facts don’t back up that argument,” Blank said.

Listings, in the metro area, ended 2014 down by 27 percent year-over-year, even while sales rose by 0.9 percent, he said.

“That shows you homes are selling faster than they are coming on the market,” Blank said.

In Denver, for example, there were only 380 homes priced between $300,000 and $500,000 on the market at the end of last year, a 54 percent drop from the 826 available a year earlier, he noted.

Refinancing uptick

Blank was recently speaking with a lender who told him that there has been an uptick in people refinancing their mortgages.

It is surprising that there are still homeowners out there who hadn’t refinanced during the past few years, he said.

“What he told me is that increasingly people who are refinancing are also taking cash out,” Blank said.

He said that is a bit worrisome, as people using their homes like ATM machines contributed to the Great Recession.

Case-Shiller: National snapshot

Nationwide, Denver is one of the markets expected to continue to show strength this year, according to David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.

He used a baseball analogy to drive home his point.

“With the spring home buying season, and spring training, still a month or two away, the housing recovery is barely on first base,” Blitzer said.

“Prospects for a home run in 2015 aren’t good,” Blitzer said.

“Strong price gains are limited to California, Florida, the Pacific Northwest, Denver, and Dallas,” Blitzer said.

“Most of the rest of the country is lagging the national index gains,” he continued. “Moreover, these price patterns have been in place since last spring. Existing home sales were lower in 2014 than 2013, confirming these trends.

“Difficulties facing the housing recovery include continued low inventory levels and stiff mortgage qualification standards,” Blitzer said in the Case-Shiller report.

“Distressed sales and investor purchases for buy-to-rent declined somewhat in the fourth quarter. The best hope for housing is the rest of the economy where the news is better. 2014 was a good year for job creation and weekly unemployment claims – good short term indicators – which continue to provide upbeat reports. Consumer confidence, helped by cheap gasoline prices, is strong, and a good GDP number is expected this week.”

Metropolitan AreaChange from January 2000Oct.-Nov. Change1-Year Change
Las Vegas37.85%0.3%7.7%
Los Angeles125.77%0.3%5.1%
New York 75.33%-0.8%1.5%
San Diego103.66%0.3%4.9%
San Francisco96.24%0.1%8.9%
Washington, D.C.107.48%-0.5%1.9%
Composite 1087.71%-0.2%4.3%
Composite 2079.94%-0.1%4.7%
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Have a story idea or real estate tip? Contact John Rebchook at is sponsored by Universal Lending, Land Title Guarantee Co. 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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