September housing gains continues Denver’s streak.
Denver was ranked No. 3 for home appreciation in September by Case-Shiller.
Denver home prices rose 8.7% in September from September 2015.
Denver was No. 3 in the country for housing appreciation in September, a ranking it has held for eight consecutive months, according to the closely followed Case-Shiller report released today.
Home prices in the Denver-area rose 8.7 percent in September from September 2015, according to the S&P Case-Shiller CoreLogic National Index.
As has been the pattern since February, only Seattle and Portland, which showed gains of 11 percent and 10.9 percent, respectively, topped Denver.
September marked the 31st consecutive month of housing appreciation in the Denver area.
While the 8.7 percent year-over-year gain was the lowest since 8.4 percent in January 2015, Denver home prices easily topped the overall appreciation of 5.1 percent for the 20 major markets tracked by Case-Shiller.
“This was September data and September was a very good month,” noted independent broker Gary Bauer.
“Currently, we are seeing a little seasonal slowdown,” Bauer said, although he added it is great that “Denver continues to be No. 3. Denver is truly a destination city.”
He said prospective buyers had been a bit distracted by the divisive presidential election and now are focusing on other things, such as the Christmas holiday season, when home activity typically slows.
The recent records in the stock market create a wealth effect, which bodes well for housing, if it continues, he noted.
And while mortgage rates recently topped 4 percent, rising about a half percent since Donald Trump’s choice, he noted they are still low by historic standards.
“We’ll just have to wait-and-see, if the Fed raises rates in December,” and what impact, if any, that will have on mortgage rates, he said.
Peter Niederman, CEO of Kentwood Real Estate, agreed.
While rising mortgage rates will have an impact on the housing market in Denver and across the country, he said the Denver-area market has been so red-hot that more than anything higher rates would “normalize” the local market.
That might mean that instead of home prices rising 8 percent to 9 percent, they could appreciate 4 percent to 6 percent, he said.
And the supply of unsold homes might increase to three to four months, instead of the current levels of less than two months, for the overall Denver-area housing market.
“It might feel like the market is different and taking a step back, but if you look at the historical big picture, that is pretty phenomenal,” Niederman said.
“I would take it all day long.”
Also, if Trump and Congress push through lower capital gain taxes and cut taxes, and that led to consumers having more discretionary income, that could help offset rising interest rates to some extent, he said.
“Of course, nobody knows what is going to happen, but capital gain tax cuts and lower income tax rates, could mean people will have additional available cash,” some of which could go to buying homes, Niederman said.
Nationally, the overall housing market has surpassed the peak set in July 2006, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. That index covers all nine U.S. Census divisions.
“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” according David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“While seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms — Miami, Tampa, Phoenix and Las Vegas — remain well below their all-time highs.
“Other housing indicators are also giving positive signals: sales of existing and new homes are rising and housing starts at an annual rate of 1.3 million units are at a post-recession peak.
He noted that from 1975, the earliest date for the S&P Case-Shiller CoreLogic National Index, to this report, home prices rose at an annual rate of 4.9 percent before adjusting for inflation.
“The real or inflation adjusted pace was 1.1 percent per year,” Blitzer continued.
“Real disposable personal income per capita – income after inflation and taxes on a per-person basis, rose 1.9 percent, outpacing home prices over the entire period,” he said.
He noted that the stock market, measured by the S&P 500 adjusted for inflation, did better at 4.4 percent per year.
“The time frame makes a big difference,” Blitzer said.
“We are currently experiencing the best real estate returns since the bottom in July of 2012 when prices rose at a 5.9 percent real annual rate.
“Given history, this trend is unlikely to be sustained.”
|Metro Area||Change from January 2000||August-September Change||1-Year Change|
|May||14 (tied with 2 cities)||8.2%|
|July||9 (tied with 1 city)||6.7%|
|October||1 (tied with S.F., Portland||10.9%|
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