Residential housing in the mountain states of Colorado,Utah and New Mexico is looking stronger than many others, but that’s partly because the comeback hasn’t been as steep.
Simply put, homes in the region didn’t appreciate in value over the last decade as much as in the coastal regions, Arizona or Nevada. What didn’t go up much before the bubble burst in 2008 didn’t go down much once it did.
Homes certainly lost value, but owners don’t have to regain as much ground to attain their earlier equity.
“We didn’t experience the bubble that California, Florida, Arizona and Nevada did,” said Thomas Thibodeau, a residential real estate expert at the University of Colorado’s Leeds School of Business. “Prices in Denvercame down about 14 percent, peak to trough, and it now looks like the decline has come to an end.”
In 2008, Thibodeau co-authored a study examining 84U.S. metro areas for signs of a speculative housing bubble. Twenty-five cities showed housing prices 30 percent over the expected increase, the study concluded. But with the exception of Las Vegas, all were within 75 miles of the Pacific or Atlantic coast.
“Extreme speculative activity, so prominently publicized, was extraordinarily localized,” the study concluded.
The 2012 story of residential real estate in the so-called Intermountain West can be told in a tale of three cities —Salt Lake City, Albuquerque and Denver— where its population is most concentrated.
Denver Almost Tops
The closely watched Case-Shiller index for January showed theDenver market in positive territory for the first time in 18 months.
The slight 0.2-percent, year-over-year increase was the third-best showing among the 20 cities tracked in the barometer.
Other than Denver, only Detroit and Phoenix showed price increases, at 1.7 percent and 1.3 percent, respectively.
Chris Mygatt, president of Coldwell Banker Colorado, says an improving housing market is reverberating throughout Denver’s economy. “I think it’s an important tell-tale sign, one of many pointing to a continued recovery and stability in the Denver housing market.”
Mygatt adds, “I’m being told that there is an increase in furniture sales and landscaping. It really is across the board. Although our strength is modest compared to recoveries of the past, I really do think there is a fundamental shift in consumer confidence and the local economy.”
Another positive sign is the number of unsold resale homes. They plunged 42 percent in February from a year ago.
There were only 10,086 unsold single-family homes and townhomes/condominiums on the market in February, about 60 percent less than the year-ago period, and the least for that month since 2000.
“The inventory is a somewhat challenging situation,” he says. “It’s a good-bad situation, depending on whether you are a buyer or a seller.”.
“For the first time in five years I’m getting multiple offers on homes”. “So I’m putting escalation clauses into offers again. We tell the seller we’ll pay them $10,000 over whatever other offer they get.”
The biggest problem Denver brokers are having is finding properties for buyers, “Relocation clients, people moving here fromNashville or Southern Californiafor jobs, are blown away by the market here. They say they like a house, we go back and it’s already under contract.”
“Prices aren’t up much yet, but I think they’re headed that way”. I’m seeing more consumer confidence, people feeling better about their jobs and the economy. In Colorado, we feel as if we are finally moving forward, that the worst is behind us.”