Case-Shiller: Denver No. 1



  • Case-Shiller released a report today.
  • Denver was No. 1 in the closely followed Case-Shiller index.
  • Denver hasn’t been in first place since December 2008.
Denver needs more active listings. Case-Shiller reports that Denver was No. 1 for appreciation in January.

Denver needs more active listings. Case-Shiller reports that Denver was No. 1 for appreciation in January.



By John Rebchook

Forget about the Final Four.

We’re No. 1.

The Denver-area housing market showed greater appreciation than 19 other major metropolitan areas across the U.S. tracked in the closely followed Case-Shiller report released today.

Denver home prices rose by 8.4 percent in January from January 2014, Case-Shiller reported.

Miami was in second place with an 8.3 percent gain, according to Case-Shiller.

The last time Denver was ranked No. 1 by Case-Shiller was in December 2008. At that time, the Denver market experienced a year-over-year decline of 4 percent. The 20 MSAs tracked by a Case-Shiller experienced an 18.9 percent drop in December 2008, when the national housing market was in the early stage of the worst crash since the Great Depression of 1929.

Denver hot 

Denver home prices have now hit record levels for 23 consecutive months, according to an analysis of Case-Shiller data by

January also marked the 37th consecutive month of appreciation, according to Case-Shiller.

And January was the fourth straight month of rising year-over-year appreciation from the previous month, noted Lane Hornung, CEO of 8z Real Estate, sponsor of

In October, the year-over-year appreciation for Denver stood at 7.2 percent.

“Our market is market is unquestionably heating up,” Hornung said

“At 8.4 percent we’re just 0.5 percent below the 8.9 percent appreciation seen in January of 2014 on a seasonally adjusted basis,” Hornung continued.

“The difference- last year our price increases were moderating from the double-digit highs reached in the second half of 2013,” he explained.

Indeed, the increase in prices may not be over, he said.

Denver home prices accelerating

“This year, price increases aren’t moderating, they’re accelerating as we move into the prime spring selling season,” Hornung said.

The question is: will we see the Case-Shiller index reach double-digit gains in the coming months? I give it better than a 50 percent probability,” he said.

“We’re finally No.1,” said Chad Ochsner, the broker-owner of RE/MAX Alliance.

Being No. 1 does give Denver some boasting rights, but with a caveat, he said.

“I suppose you could say we are No. 1 and Denver is the hottest market in the country based on appreciation,” Ochsner said.

“That is great news if you are a homeowner,” Ochsner said.

“But if you are a home buyer, you don’t want to hear that prices are up 8.4 percent,” he said.

“Certainly, an 8.4 percent increase will knock some people out of the market, or force them to buy less expensive homes,” Ochsner added.

A Case-Shiller snapshot of the 20 markets it tracks.

A Case-Shiller snapshot of the 20 markets it tracks.

Demand has been far-outstripping the supply, he and other brokers noted.

“This reminds me of 1998, when we had a shortage of homes and strong demand,” Ochsner said.

“But the shortage is even much more severe today than it was in 1998. We have fewer homes on the market today,” even though the size of the market is bigger, he noted.

On the other hand, there may be relief in sight from today’s frenzied market.

About 700 homes came on the market last week

Anthony Rael, a RE/MAX Alliance broker who “does such a great job with DMAR (Denver Metro Association of Realtors) statistics,” last week reported a big increase in new listings hitting the market, Ochsner noted.

At 8:44 p.m. last Thursday, Rael posted on his Facebook page that 676 new listings had come on the market that week.

Even better, 101 of them were priced under $200,000 and 176 were priced between $201,000 and $300,000, Rael noted.

“What is really going to be telling is what our inventory levels will be like in May and June,” Ochsner said.

“If we don’t see an increase in active listings by then, we might even have some concerns of a mini-bubble,” he said. He added, however, he is not concerned about a bubble, even a small one in the Denver market, at this time.

“The question also is: how sustainable is an 8.4 percent increase? It certainly is not healthy,” Ochsner said.

“We need more inventory so we will have a more balanced market and more stable market,” he said.

Peter Niederman, said the No. 1 ranking by Case-Shiller is incredible.

“I can tell you, right now, the brokerage community is feeling it,” Niederman said. “Whether I am talking to brokers at Kentwood or talking to brokers at other companies, they are all feeling it.”

He drilled down into the demand-inventory imbalance.

“What a lot of people are missing is that a lot of homes are being added to the market,” Niederman said. “But they are gone quickly. The sales velocity is greater than the supply.”

Niederman, said Denver is in the fourth year of what probably will be a seven-year cycle of rising prices.

However, said it seems almost certain that the Federal Reserve will at long last raise interest rates this year.

“The question will be if they do it in the second quarter, the third quarter or the fourth quarter,” Niederman said. “And will we see one rate hike or two rate hikes.”

Rising rates will mean some percentage of the buyer public will knocked out of the market or will qualify for a less expensive home.

“It may seem counter-intuitive, but rising rates could actually increase the demand for housing,” Niederman said. “People don’t want to be left at that station. When rates are falling, there is no sense of urgency. But rising rates, especially when they are still low, does create a sense of urgency.”

Rising rates also might slow home appreciation, he said.

“That would be a good thing,” Niederman said. “It’s not healthy to have near double-digit appreciation for such an extended period of time.”

However, economist Patty Silverstein said she wouldn’t be surprised if Denver retains its No. 1 ranking from Case-Shiller for the next several months.

“Right now, with the strong appreciation data we are receiving from other sources as well as Case-Shiller, I would expect that Denver’s position will be maintained,” said Silverstein, principal of Littleton-based Development Research Partners and chief economist for the Metro Denver Economic Corp. and the Denver Metro Chamber of Commerce.

Silverstein said she does not see a supply increase in new homes or previously owned homes that will dramatically drive down prices.

“We need more entry-level homes in the Denver area,” she said.

She said if the Legislature passes a construction defect litigation law this year it could help.

“We might then see more affordable condos built, if the construction defect litigation issue is addressed,” Silverstein said. “It will be interesting to see if the legislation passes, what impact it will have on the condo construction market.

On another notice, rising home prices can hurt the area’s growth potential.

“Companies looking to relocate or expand here do look at affordability,” she said. “Rising home prices can hurt our economic development efforts.”

Erb: Two dozen offers par for the course

Laurie Erb, the broker-owner of RE/MAX of Cherry Creek, said demand so far outstrips supply that it is not unusual to receive two dozen offers on a home.

Active listings in the Denver area are at record lows, which has been the prime force in driving home prices to record levels.

“I am not seeing anything that everyone else is not seeing,” Erb said.

“There is just a huge demand for homes and a real shortage of inventory, so I am not shocked we are No. 1 for appreciation,” Erb said.

The acute shortage of homes is for moderately priced homes, which she defines as below $400,000 in close-in Denver neighborhoods.

“While there is a shortage in all price ranges, it is most dramatic for ‘affordable’ homes in central Denver,” Erb said.

“The under $400,000 market is just brutal; everything is getting bid up,” she said.

Laurie Erb is listing this central Denver home. Erb, of RE/MAX of Cherry Creek, is not surprised Case-Shilelr ranked Denver No. 1, given that Denver homes are flying off the shelf at record prices.

Laurie Erb is listing this central Denver home. Erb, of RE/MAX of Cherry Creek, is not surprised Case-Shilelr ranked Denver No. 1, given that Denver homes are flying off the shelf at record prices.

She said she is getting 15 to 25 offers on Denver homes in that price range.

She recently listed a 1,121-square-foot, 2-bedroom, 2-bathroom home in the University Park neighborhood for $340,000 and within four hours received 24 offers.

She has received offers for more than $375,000, about 10 percent above the asking price.

“In a seller’s market like this, buyers are coming out earlier,” Erb said. “They are coming out when the grass is still brown.”

She said she feels sorry for prospective buyers who keep losing bidding wars.

“They are dong everything right,” by getting pre-qualified and making quick buying decisions, she said.

“There are people out there who have bid on 10 houses,” Erb said.

She said the market was similar to this last March.

“Now, it’s even more dramatic, because we have 15 percent or 20 percent less inventory and last year it was very skinny,” she said.

While this market is great for buyers, there is a flip side.

“Most sellers also are buyers,” Erb said. “When I get a listing, I’m just about guaranteed to sell it and probably over the weekend.”

It’s also time-consuming for both the seller and the Realtor to pick a winner, she said.

“Every agent (for the buyer) calls you at least four times, so when you have 24 offers, it become a full-time job dealing with every home,” Erb noted.

Buyers, however, shouldn’t give up, she said.

A Case-Shiller snapshot for 20 markets in January. Denver was ranked No. 1 in the Case-Shiller index of 20 cities.

A Case-Shiller snapshot for 20 markets in January. Denver was ranked No. 1 in the Case-Shiller index of 20 cities.

“More inventory is going to start to come on the market in May,” Erb predicted.

“So while it will still be a seller’s market in May and June, it probably won’t be the feeding frenzy we are experiencing today,” Erb said.

Independent broker Gary Bauer was surprised that Denver was ranked No. 1 by Case-Shiller.

“I thought we would be No. 3 or No. 4,” Bauer said.

“I guess being No. 1 means it is time to celebrate,” he said.

The Denver market continues to be a strong market.

‘The biggest problem we are facing is the severe shortage of active listings,” Bauer agreed with other brokers,

Millennials want American Dream

Despite what many would lead you to believe, young professionals want the American Dream of owning a home, he said.

“Millennials have been very creative in making offers,” Bauer said.

However, he is concerned that with such a rapid rise in home prices that many people will be priced out of the market.

“Affordability is something that needs to be addressed,” Bauer said.

“The problem is that active listings are so low and homes are going so fast, we are seeing this rapid appreciation.”

Homebuilders, he said, are trying to make up for the shortage of previously owned homes.

“Homebuilders are building as fast as they can, but they have constraints on how fast they can get homes built and open,” Bauer said.

National snapshot

Denver in January even out-paced California cities, such as San Francisco, Los Angeles and San Diego.

“Regional patterns in recent months continue: strength in the west and southwest paced by Denver and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and Las Vegas,” said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices.

A lot of factors are driving the national housing market, he said.

“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices,” according to Blitzer.

“Despite price gains, the housing market faces some difficulties,” Blitzer said.

“Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback,” Blitzer continued

“Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak,” he added.

“Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession,” Blitzer said.

Have a story idea or real estate tip? Contact John Rebchook at is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

Metropolitan AreaChange from january 2000March-April Change1-Year Change
Las Vegas40.12%1.0%6.3%
Los Angeles132.87%1.3%6.1%
New York75.50%0.5%2.8%
San Diego109.88%0.6%4.5%
San Francisco110.28%2.0%10.0%
Washington, D.C.109.82%1.4%1.1%
Metro Area% of homes rising in value in May% of homes rising in value May 2014.Small home 1-year value change in May.Medium home 1-year value change in May. Large home 1-year value change in May.
San Francisco65974.8%4.0%3.5%
Los Angeles46941.3%1.0%0.4%
New York40580.2%0.3%0.0%
Washington, D.C.3457-0.2%-0.4%-0.7%
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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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