Wednesday, September 19, 2012

Realtors: Metro Denver median price hits all time high, while Springs, statewide median prices also rise

Median home prices for single-family homes during August 2012 were up in metro Denver, the Pikes Peak region, and statewide.  According to median home price data for August, released by the Colorado Association of Realtors, the median home price for single-family homes in the Denver area was $264,627 during August, which is an increase of 10.6 percent from August of 2011. It is also an all-time high median price for single-family homes in the region. Statewide, the median home price was $212,991 during August, an increase of 14.1 percent from the same month last year. The median price in the Pikes Peak region rose 10.3 percent, year over year, rising to $211,509 during August. (The values presented here are 3-month moving averages for each month, so August's median prices are averages of June, July, and August prices.)

This article discusses single-family median home prices only.

The first graph shows the median single-family home price for the state and for the metro Denver and Pikes Peak regions. Median home prices fell dramatically in all three measures following the financial crisis of late 2008, but moved back up quickly by mid-2009. In recent months, prices have begun to move upward at a significant pace. 

The metro Denver area has now surpassed peak levels reached during August of 2007, and is up by 2 percent.  However, the statewide median price is now 11.5 percent below its August 2008 peak. The Pikes Peak median price rose in August to 14 percent below its July '05 peak.

The second graph shows that year over year changes in the median prices have been positive in all three regions for the past four months. These changes have been a bit larger than was the case in the Case-Shiller and Corelogic home price indices. The Case-Shiller and Corelogic indices, for example have shown year-over-year increases in prices ranging from 4 percent to 7 percent in recent months. See here for more.

After numerous increases in home sales activity during late 2011 and early 2012, home prices finally began to show significant positive change in response by the Spring of 2012. Demand also continues to be helped by low interest rates and by ongoing Federal Reserve actions to increase liquidity in home lending, as with QE3. This increases the money supply however, which will impact general prices, and thus disposable income, for prospective home buyers in the future.

The home price data provided by the Colorado Association of Realtors is based on home sales transactions that are listed in the MLS systems for each area and do not include for-sale-by-owner transactions or new homes sold directly by home builders.