Denver homes lose 5.2 percent
Metro-area prices still outperform most cities, index shows
By John Rebchook, Rocky Mountain News (Contact)
Published December 30, 2008 at 9:36 a.m.
The Denver-area housing market, although still showing an overall drop in housing prices, greatly outperformed the nation as a whole, according to the closely watched S&P/Case-Shiller Home Price Indices released Tuesday.
The report showed that Denver-area home prices lost an average of 5.2 percent from October 2007 to October 2008. Only the 3 percent drop in Dallas and the 4.4 percent decline in Charlotte, N.C., were better during that period. The report tracks most of the 20 largest metropolitan areas in the country.
"We've been fighting this market malaise a lot longer than most of the nation," said Kerry Dunn, owner of Dunn Appraisals in Greenwood Village. "We're farther into this down cycle than the rest of the nation, and it sure feels like some neighborhoods are starting to gain some traction."
Long-term, however, many other markets still are outpacing Denver, according to Case-Shiller.
Since Jan. 1, 2000, Denver has gained 29 percent, while even with recent massive downturns, Las Vegas is up almost 43 percent, Miami is up 73 percent, and Phoenix is up 35 percent during that time period, the Case-Shiller report said.
"That's an interesting statistic," Dunn said. "But I think a lot of these other markets haven't found their bottom yet and (Denver) is within 90 days of our bottom. I think these other markets are still in for another year of very turbulent times, while we (in Denver) might even see some upward movement next year."
Real estate broker Todd Crosbie said by putting the recent downturns into perspective, homes nationwide are now worth what they were in 2004.
"That is not as dramatic as the numbers themselves," said Crosbie, a broker with Coldwell Banker Devonshire.
Crosbie said he recently had been outbid on three foreclosures that he planned to buy as investments in Denver. All three sold for vastly more than the asking price.
In one case, a 2,500-square-foot house in Observatory Park was listed for $299,000, while the lot alone was worth $350,000. Crosbie bid $305,000, but thinks the house, which previously had sold for $600,000, fetched between $350,000 and $375,000.
He also was outbid on two houses in the Villa Park neighborhood south of West Colfax Avenue. Both houses have views of the Denver skyline.
One house, which sold for $125,000 a few years ago, was listed at $29,000. Crosbie bid $36,000 for it. The house hadn't closed yet, so he didn't know the winning bid.
The other house was listed at $59,700, and Crosbie bid $75,000. Crosbie said it sold for $91,000.
While there is no urgency from buyers in the Denver area, many people recognize that now is an ideal time to buy, with interest rates at record lows and prices depressed, said Michael Trujillo, owner of Volante Realty.
Many people even are willing to break even on selling their homes, believing they will make it up when buying at bargain prices, he said.
However, fear of losing their jobs is keeping many prospective buyers out of the market, he said.
"If they have job security, they are on board to buy," Trujillo said.
Carol Freyer, a co-owner of the Porchlight Group, said that even though Denver's overall market is down about 5 percent, "it is holding up remarkably well compared to the rest of the country. The Case-Shiller report clearly shows that our decline is much less than the rest of the country's."
She said the only thing the Denver-area market is missing is consumer confidence.
"I think Denver has hit bottom and we are not going to see any big declines anymore," she said.
From September to October, the Denver area lost 1.5 percent, compared with a 2.2 percent decline for the 20 cities. Five cities performed better than Denver in that one-month period: New York, Boston, Cleveland, Dallas and Chicago.
rebchookj@RockyMountainNews.com or 303-954-5207
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December 30, 2008
10:49 a.m.
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WarrenJimmyBuffett writes:
So, when the prices lose 5.2% in a year, you make money, right? No. You lose a lot. Money that most people don't have in these troubled economic times. Remember: Buy now, lose money.
December 30, 2008
2:15 p.m.
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Tizzy writes:
Home price levels are way out of line period. If you look at home prices over the course of a 100 years you can see on a graph that in the last decade the prices jumped very high compared to the gradual increases of the 1930s and 1940s.
Also why is it that everyplace in America has these huge housing markets being built (Charlotte, Denver, Orange County)? People are having less children these days, so where is the population increase coming from? Plus senior citizens are dumping their homes for smaller retirement apartments, so again more homes will become available that were built 30 years ago.
I see articles in the paper about cities such as Littleton closing schools because of low enrollment, yet there are thousands of homes being built in places like Parker and Castle Rock that don't have enough schools to help with the population.
Shouldn't we be rethinking housing across the country and building up existing neighborhoods with established schools? This would help with people being able to afford a home. But no everyone wants new and bigger, thus the mega suburb homes or Mcmansions.
December 30, 2008
3:10 p.m.
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denvernorthwest writes:
Tizzy, the poulation increase is coming from foreigners.
Warren, you are the worst fear monger I have seen on hear. You think you know about housing. You are probably trying to make the market worse so you can profit from it or you are pissed off because you bought at the top of the market and now can't dump your house or had it foreclosed. Either way your issues don't have anything to do whether or not it is a good time to buy or sell a home. Home values are cyclical and certain neighborhoods like Wash Park and NW Denver and Downtown have seen huge increases even in bad times.
December 30, 2008
3:31 p.m.
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WarrenJimmyBuffett writes:
"Home values are cyclical and certain neighborhoods like Wash Park and NW Denver and Downtown have seen huge increases even in bad times."
And home prices never go down YOY either. Wasn't NAR touting that for a long time? I think the problem is I know too much about the fundamentals of housing and the people dependent on the housing industry don't like the reality (or me because I represent reality). Deal with. I'm here to protect the people from other people who depend on selling/building/buying houses for a living. The true gets easily twisted when your job depends on twisting it to feed your family or pay your bills. My advice is simple: Don't trust people in real estate right now if they tell you it is a good time to buy. Buy now and lose money.
December 30, 2008
4:35 p.m.
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acm writes:
I'd like to see Rebchook go back and interview all those local realtors and real estate analysts that he quoted over the last three years, and ask them why their predictions were so wrong? At least once a month I'd read about how bright a future the Denver real estate market had, and how the entire country's prices were going to continue to go up up up. What do they have to say for themselves now?
December 30, 2008
4:45 p.m.
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Tizzy writes:
Yes, I forgot about immigrants, but still shouldn't the massive number of baby boomers turning in their homes for assisted living, retirement complexes, condos, and other smaller homes, plus the average family only having 1 or 2 kids still keep things even from years ago when immigrants were on the low end and families were larger?
I don't feel the real estate market is cyclical at all. I feel that it's been outrageously going up for about 20 years compared to the last 100 years. This glitch right now is bringing the homes down to the actual value in which they should be. I mean seriously, a one bedroom condo in Wash Park going for upwards of $400,000? That's just not realistic.
December 30, 2008
5:11 p.m.
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oceanview78382 writes:
The headline is misleading in just the same manner that "Broncos show strength " would be for a headline about the San Diego game. Sure the Broncos scored and yes Denver hasn't decreased in prices as badly as some other places, and the Broncos are better than the Lions, but the fact is prices declined again.
Denver house prices are projected to decline again in 2009 but sometime in the future it will be right to buy. Not now though unless you need a place to live and get a super deal.
December 30, 2008
8:51 p.m.
Suggest removal
prk166 writes:
Tizzy, it's about supply and demand. Wash Park maybe has what? 125? 175 housing units that are actually in that neighborhood. As Denver has grown the supply of housing in a few old inner city neighborhoods hasn't increased but the growth has most likely brought about a lot more people interested in living in them.
December 30, 2008
9:22 p.m.
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denvernorthwest writes:
look at the late 80's, the market completely crashed. I bought a home near Sloan(s) Lake in 93 for $65,000. Sold it in 98 for $150,000. Now it is worth close to $275,000. Homes are great investments but it needs to meet your needs. Everyone got used to the prices going up that they ignored things like location, style of home and potential resale value when purchasing.
As for fear monger Warren, your blanket statement doesn't hold water. You have been spewing it for a long time on here. Every persons situation is different, there are a lot of great opportunities to be a buyer in this market, especially when it comes to foreclosures.
December 30, 2008
9:25 p.m.
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Tizzy writes:
Yes, I of course understand supply and demand. But it's the rate of increase on such industries as homes and even college tuitions. Take a home that was built in 1975 and sold for $80,000 and now it's $1,500,000 or something like Colorado College that was $2,300 in 1980 and now is like $20,000. I mean it's just unbelievable. I feel like the numbers really just don't have any meaning anymore. Companies and businesses can get the rates for whatever they are selling because stupid Americans are willing to pay for it or in most cases put it on credit. You get one person who pays a million dollars for a home in the neighborhood and then that's what the going rate is. Well, people now are realizing that the going rate is meaningless. If I can get a home in Buell, Pinehurst, Heritage Hills, for $700,000 well than those people in that 'hood need to realize that their $1.8 million dollar homes from 2005 are no longer holding that figure. If people can't get credit cards anymore or credit in any form, then you know what, private colleges will be less full, unless the universities lower their rates.
The key here is that every industry is exaggerated with what things cost, and the costs in the last few decades are just insane. If you look at a graph from 1900 to 2008, you can see how things progressed slightly in cost with slight dips and there and then in the last 20 years things just got ridiculous.
Babysitters make $15-$18 an hour and a short time ago made maybe $4 or $5. Grocery clerks used to make minimum wage and now upwards of $15-$20. Professionals like attorneys used to make $100,000 in the 1980s and now make $1 million.
Things will definitely be changing once credit cards no longer extend large amounts of credit to people with medium incomes.
December 30, 2008
9:28 p.m.
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BikerChick writes:
..
Good luck ! Dream on.
Will YOU buy a home based on this puff piece ?
..
December 30, 2008
10:46 p.m.
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WarrenJimmyBuffett writes:
"As for fear monger Warren, your blanket statement doesn't hold water. You have been spewing it for a long time on here."
And I have been right. The market price is down 5.2%. However, keep telling your wife and family that real estate is the way to riches and you are a genius. They might believe you.
December 30, 2008
11:18 p.m.
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honestrealtor writes:
People will make money in bad environments too. It's fine if you want to sit back and ride it out, but some risk takers are going to profit bigtime from this period, they always do. This will be one of the times people look back to 30 yrs from now wishing they had taken a chance.
Take some tylenol pm warren.
December 31, 2008
6:57 a.m.
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SheikYurBooty writes:
The motto of every Realtor: It's always a great time to buy.
December 31, 2008
8:22 a.m.
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ashlandbus writes:
I am pretty happy where I am sitting. Bought a remodeled bungalow in Sunnyside (NW Denver) 3 years ago at a steal of a price. Have only watched it go up as the neighborhood changes and cleans up. It is one of the few desirable neighborhoods in Denver that still has affordable homes left, although what my house is worth now was out of my price range when I purchased it. Surprisingly, I haven't seen a foreclosure nearby. And, homes are only staying on the market for a month or so. I guess it really depends where you are, which determines how you will be affected by this "crisis".
December 31, 2008
10:21 a.m.
Suggest removal
honestrealtor writes:
"The motto of every Realtor: It's always a great time to buy."
I don't really care if you buy or don't buy, but I am right now myself.
December 31, 2008
10:22 a.m.
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jrod193 writes:
gotta love reading posts from the d-bag brokers, bankers and real estate agents telling everyone to "buy now!". what we're seeing in the market is the culmination of easy credit, not some sort of short term real estate cycle. the only reason we see 30 year rates where they are today is due to the fact that the fed is monetizing u.s. debt while at the same time the now risk averse investors are piling into u.s. treasuries. if it were not for those factors home prices would be dropping at a much faster clip than what we currently see. as the arm resets continue into 2010 and the economy gets worse prices will continue to fall. i hope people can learn from the mistakes they made in the past five years and actually attempt to save (gasp!) some money rather than throwing it away on a depreciating asset.
December 31, 2008
10:28 a.m.
Suggest removal
honestrealtor writes:
It's ignorant to issue blanket statements that every real estate tranasction is doomed to fail right now. Is every stock purchase a bad investment? Every vehicle purchase, or every dime you invest into your business a bad investment?? Can I borrow your crystal ball sometime before I make my next decision regarding ANY investment? I'm not suggesting everyone go out a purchase a house right now with their eyes shut and their wallets open, but there can be educated decision-making that will pay off either financially or emotionally. And regardless, whatever happened to buying a house because you love it, or love the neighborhood but couldn't afford it before? What if you're not going to sell in 1yr but stay for 10? Still a bad investment?
December 31, 2008
10:33 a.m.
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honestrealtor writes:
BTW jtod- really nice calling people d-bags without knowing them at all. You probably flip the bird to people in your car while you can quickly drive away too. Class act.
December 31, 2008
12:49 p.m.
Suggest removal
SanctuaryCity writes:
What do you expect when 15 of them occupy a house.
Just found out that a house was raided this morning in my subdivision & they were being hauled away for their life of crime in america. I would expect the property values should increase
December 31, 2008
1:09 p.m.
Suggest removal
cdmdenver writes:
Housing Values in General will be down for 5
years or more. Buying a $400,000 or more
property just means you bought a house for
a Very long time, just the fact.
BUY LOW-SELL HIGH.
December 31, 2008
1:21 p.m.
Suggest removal
mcgilmartin writes:
Here's how "honest" the NAR really is. Consider the source of what you're hearing-
http://lawrenceyunwatch.blogspot.com/
December 31, 2008
2:44 p.m.
Suggest removal
jrod193 writes:
sorry honestrealtor, but you guys are nothing but glorified used car salesman. but unlike car salesman, instead of convincing people to buy small ticket items you convince them to mortgage their families future so that you can make a commission. and now i have to read these message boards with yours and the likes moronic blabbering trying to convince people to keep buying. fact is you know nothing about the economic reality of what is going on. this false sense of wealth that the american public has is a direct result of bad advice from people like you. so know, i don't flip people off while driving in my car. but i will certainly call it like i see it when i see people like you preying on the naive public in an attempt to make a quick buck.
December 31, 2008
3:16 p.m.
Suggest removal
evlgreg writes:
Life still goes on. I have advised people NOT to list their homes with me right now, but I have also taken listings. I had more buyers this year than ever. It depends on too many factors than a blanket statement like "buy now lose money" People still are getting married, getting divorced, losing jobs, getting new jobs, having kids, having kids move away to college etc. All of these factors greatly influence the decision to buy or sell a home. WANTING to buy or sell to make money is pretty far down on the list for most people. Using your house as an ATM rather than paying it off, listing your house for what you owe (after taking money out and buying a new car), and other factors have FAR more to do with the current state of the economy than the influence of Realtors or the NAR.
December 31, 2008
3:58 p.m.
Suggest removal
evlgreg writes:
I suppose you could always just rent and invest in the stock market or banks. Seriously, it's always a math problem, figure out what works best for you. If you don't benefit from a deduction (some people don't) and you have a good place to invest other than a house, you can rent your whole life.
Most of my clients this year plan to stay put for 10+ years, so the ups and downs did not really change their decision. The low fixed interest rate and the availability or low priced properties in some areas did influence some to buy.
If you want to look at "real" numbers go ahead and figure out the price in each neighborhood of similar homes rather than taking an area average. People are scooping up sub 100k homes at a breakneck rate, then fixing them up, flipping them and making profit. This creates 2 sales at sub $200k pricing, which when averaged in with the other transaction brings the area average down. I've been outbid all year on properties in this "down" economy. I've even been outbid at full price and over full price on some houses. It's all dependent on where you are and the motivation of the buyers and sellers involved. If you want to buy in Boulder or Wash park, or Platt Park, or Park hill, or NW Denver, you are not likely to find those houses being sold for a 5% loss from last year. The Seller of a specific house purchased 12 months ago might lose money, because the increase in value(if there is one) will not cover the fees involved with selling so soon after buying.
ahhh yes, I must be an evil Realtor because I earn money by helping people buy and sell homes. We all work to earn money, is it much different than buying and selling stocks, or products, or producing a service, or creating software for future sale, etc. If my job so easy and so lucrative why do 80% of all new Realtors quit in the first 2 years?
December 31, 2008
6:06 p.m.
Suggest removal
honestrealtor writes:
well said evlgreg.
jrod, have a nice angry life.
January 2, 2009
4:25 p.m.
Suggest removal
WarrenJimmyBuffett writes:
"Most of my clients this year plan to stay put for 10+ years, so the ups and downs did not really change their decision. "
Right, until they lose their jobs and then they have to relocate to another city in a year or two. Then, they lose a lot of money. A relatively few amount of home owners stay in their homes for 10+ years. Especially during uncertain and troubled times. You might let them know that, so they will be prepared to lose money when they have no choice but to move. Maybe you can refund your commission if this happens.