Appearing on CNBC’s Power Lunch within the last hour, Robert Shiller co-author or the Case/Shiller home price index report, said Denver and Boston bucked the downward trend in the latest home prices.
The Report which was released earlier today noted that the home prices in 16 of the 20 top real estate market actually declined. In contrast, both Denver and Boston have experienced price appreciation since March and February, respectively. Shiller’s comments on the business television program were in sharp contrast to the headlines that accompanied the report.
“There are some signs of optimism, though.”, Shiller commented on CNBC. ” Boston has gone up every month since February. Denver every month since March. Chicago is up a little bit. Detroit is up a little bit. It is conceivable that there is some really good news coming in”.
In contrast Shiller usually puts a negative spin on the housing outlook as he did in this interview with MarketWatch.
What confuses the issue is that home prices in Denver were actually down by .7% on the average during the last year. Shiller noted, however, on CNBC that Denver and Boston have had higher home prices in the last several months. So, the previous downward trend of home prices in Denver appears to have reversed since early Spring.
That was confirmed when Metrolist, the Denver multilist reporting agency, announced on September 5that the average residential sold price in August was298,467. That is an increase from January when the average home price was $266,066. But, was that really an increase in every home sold? I don’t think so. My opinion is that most prices are flat in the better areas on Denver’s south side. Foreclosures and desperation sales are more common on Denver’s north side of town including it’s suburbs.
Denver relocation buyers moving to Denver also played a role in sustaining home prices. For example, over 600 engineers moved here this year with Boeing Company to support the United Launch Alliance, a joint rocket project with Lockheed-Martin. The Kentwood Company also reported that year-to-date relocation buyers accounted for a whopping 34% of all home sales.
In the last year however, 16 of the top 20 markets had home price declines according to Shiller’s report.Detroit, down 9.7%: Tampa, Fla., down 8.8%; San Diego, down 7.8%; Phoenix, down 7.3%; Washington, down 7.2%; Miami, down 6.4%; Las Vegas, down 6.1%; Los Angeles, down 4.8%; San Francisco, down 4.1%; New York, down 3.8%; Cleveland, down 3.6%; Minneapolis, down 3.4%; Boston, down 3.4%; Denver, down 0.7%; Chicago, down 0.9%; Dallas, up 0.7%; Atlanta, up 1.2%; Portland, Ore., up 3.8%; Charlotte, N.C., up 6%; and Seattle, up 6.9%