September housing gains continues Denver’s streak

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.

September

A historical national snapshot of housing prices. Source: Case-Shiller.

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.

September

Nationally, home prices have topped pre-recession levels.

“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 AreaChange from January 2000August-September Change1-Year Change
Atlanta32.98%0.2%5.3%
Boston92.30%0.2%4.3%
Charlotte42.49%0.3%3.0%
Chicago37.90%0.0%8.0%
Cleveland12.56%-0.4%8.7%
Dallas67.72%0.3%5.8%
DENVER88.65%0.3%8.7%
Detroit9.54%-0.1%5.8%
Las Vegas53.01%0.5%5.6%
Los Angeles152.65%0.3%5.9%
Miami117.32%0.5%6.7%
Minneapolis55.39%0.3%5.3%
New York84.75%0.1%10.9%
Phoenix63.27%0.3%5.3%
Portland108.48%0.1%5.7%
San Diego127.98%0.1%11.0%
San Francisco128.57%-0.4%7.5%
Seattle104.56%0.0%2.7%
Tampa85.93%0.5%7.5%
Washington, D.C.
117.59%0.2%2.7%
Composite 10105.77%0.1%4.3%
Composite 2091.78%0.4%5.1%
MonthRanking YOY Change
January 201062.6%
February53.6%
March74.1%
April 84.4%
May83.6%
June91.8%
July 11-0.1%
August11-1.2%
September9-3.1%
October7-1.8%
November6-2.5%
December7-2.4%
January 20116-2.3%
February 5-2.6%
March 7-3.8%
April 6-4.1%
May5-3.3%
June3-2.5%
July4-2.1%
August3-1.6%
September5-1.5%
October4-0.9%
November3-0.2%
December2-0.4%
January 201230.2%
February 40.5%
March 32.6%
April 42.8%
May33.7%
June44.0%
July45.4%
August55.5%
September66.7%
October76.9%
November87.8%
December108.5%
January 2013109.2%
February109.9%
March139.8%
April139.9%
May139.7%
June129.4%
July129.7%
August1310.1%
September139.9%
October159.5%
November168.9%
December169.0%
January 2014169.0%
February159.1%
March159.1%
April 168.9%
May 14 (tied with 2 cities)8.2%
June127.7%
July9 (tied with 1 city)6.7%
August96.3%
September 66.2%
October57.2%
November57.5%
December 38.1%
January 201518.4%
February 110%
March 210%
April110.3%
May110%
June110.2%
July210.3%
August 110.7%
September 110.9%
October 1 (tied with S.F., Portland10.9%
November310.9%
December 310.2%
January 2016410.2%
February 39.7%
March 310.0%
April 39.5%
May39.5%
June39.2%
July 39.4%
August38.8%
September38.8%

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 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 GlobeSt.com, covering commercial real estate for the Internet publication.

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