Good news for Denver-area housing market
By John Rebchook, Rocky Mountain News (Contact)
Published August 26, 2008 at 9:05 p.m.
The Denver area housing market showed the most appreciation of 20 metropolitan areas tracked by the closely watched S&P/Case-Shiller Home Price Indices from May to June.
The Denver area showed a 1.5 percent gain in that period. Boston, with a 1.2 percent increase, was the only other metropolitan area to show an increase.
The average percentage change in that one-month period was a loss of 0.5 percent for all 20 cities, and a loss of 0.6 percent for 10 of them.
Denver and Boston have shown three consecutive months of positive returns. Denver homes showed a 4.7 percent decline from June 2007 to June 2008, the third best of the 20 cities.
Only Charlotte, N.C., with a 1 percent drop, and Dallas, with a 3.2 percent drop, fared better.
Phoenix was the worst performer, with homes losing 27.9 percent of their value.
Overall, the 20-city composite showed a 15.9 percent drop from June 2007 to June 2008, while the composite of 10 of the cities showed a 27 percent drop.
"While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.
But Lou Barnes, principal of Boulder West Financial in Boulder, argues that a large number of distressed homes on the market - foreclosures and sales in which lenders take less than the mortgage amount - has lowered the overall value of homes sold.
Julie Montgomery, a broker associate with RE/MAX Masters Inc. of Greenwood Village, said the key to selling a home in Denver is to make sure it is in perfect condition and shows well: "You have to update the kitchen and bathrooms and get rid of tired carpets. Today's buyer just wants to bring a toothbrush and clothes and move in."
rebchookj@RockyMountainNews.com or 303-954-5207
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August 27, 2008
4:19 p.m.
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jlgraybill writes:
My home lost 5% in value year over year from 2007-08, and that's good news? Showing an increase month to month doesn't mean much, because as everyone who follows the market knows, the summer months are seasonal and traditionally show an increase month to month even in a downturn (see 2007, 2006, 2005, etc). Also, I don't really care if we beat out other cities, losing 5% isn't good news. I don't know who does the finances in your home, but I've never thought that losing money was good news.
August 27, 2008
9:22 p.m.
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denvernorthwest writes:
the good news is that the worst may be coming to an end. Anyone who thought that home values could keep skyrocketing year after year was kidding themselves. Your home may be down 5% this year but how has it done over the last 5 years. I bet you are still in a big positive.
August 27, 2008
10:19 p.m.
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WarrenJimmyBuffett writes:
It is NASDAQ 3000. Unfortunately NASDAQ falls alot more. If you don't understand the facts, you end up with half your money. Unfortunately, buying housing generally involves leverage, so you don't lose half, you lose everything. Buy now and lose money.
August 28, 2008
7:05 a.m.
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jlgraybill writes:
Denvernorthwest: You say that "the worst MAY be coming to the end." That's exactly the point. Nobody knows for certain. And nobody will be able to state with certainty where the bottom is until months or years after it hits. I'm not saying the sky is falling, but I'm also not certain that it isn't (and neither are you). With the pending Alt-A and Option Adjustable resets, and possibly additional foreclosures, and the current state of the economy and tight lending and rising inflation, it's impossible to say that we've reached bottom, locally or nationally. This could be the bottom, but this could also be a false bottom. There is no "good news" in declining values, no matter the rate. There's simply speculation. I just wish these writers would speak the truth and stop trying to use positive or negative spin to draw people in. Funny...I thought this was the Business section and not the editorial section of the paper.
Yes, in pure dollar figures my house is still worth more than I paid for it...but since it has now appreciated less than the value of inflation, it really is worth less. So this is not good news, no matter your speculation on reaching a bottom.