For more than a year, Denver home prices have been very inconsistent. They have seen a huge decline in a very short period. This has caused a lot of issues for buyers as well as sellers. A report has been released to analyze and compare these local markets with the national downward trend in home prices. This report says that while the yearly price changes indicate that Denver is performing similarly to the nation, overall trending shows that Denver is still outperforming national home prices.
According to the latest Case-Shiller home-price index, home prices fell 1% last November in a 1-month period. This has affected almost 20 major US cities. This decline was marked as the fourth straight monthly decline in home prices. After November, the prices continued to decline except for the three US cities Washington DC (up 0.51%,) San Diego up (0.52%,) and Charlotte (up 0.07%.) These areas posted gains year after year where the other cities saw prices falling.
If we do an annual comparison, we find that average prices went down 2.3% in November 2010 compared to November 2009. On a yearly basis, July 2010 has registered a 0.1% decline, August 1.2% decline, September 1.6% followed by 1.8% year over year decline in October.
According to the Case-Shiller report, Denver’s house prices have showed a year over year increase from October 2009 until July 2010 when they begin to decline. On the other hand, the report also shows that 5 metropolitan areas where the decline exceeded 6%. Atlanta has shown a 7.9% decline in prices in November 2010 compared to a year earlier. The report also mentioned Chicago with a 7.6% decline, Detroit with 7.1% decline, a 6.9% decline in Portland, and another 6.4% decline in Phoenix.
The Case-Shiller report is an index published by Standard & Poor’s and Fiserv, Inc., which assigns values or indices to the house price market in the United States. Its name came from the methodology that Karl Case, Robert Shiller, and Allan Weiss have proposed to measure and track repeat sales of houses monthly. This report doesn’t only have one Home Price Index, it actually has a national home price index which is a composite of single-family home price indices updated monthly,. It is a 20-city composite index, a 10-city composite index that is meant for 10 major Metropolitan Statistical Areas in the US, and twenty individual metro area indices.
This decline is thought to have a bad effect on the country’s economy, as residential investment is normally the main locomotive that pulls the economy out of recessions. The solution, some suggest, is in used houses, which represent great substitutes for new ones.