Colorado ranks near the bottom of the nation for 12-month home-price appreciation, but economists said the slower growth rate could benefit the state in the long run.
Average home prices in Colorado gained 5.6 percent in the year ended Sept. 30, according to data released Thursday by the U.S. Office of Federal Housing Enterprise Oversight.
That growth rate ranked 45th among the states and Washington, D.C.
Arizona led the country with 30.3 percent appreciation, while Michigan was last with 4 percent. The nationwide average appreciation rate was 12 percent, according to the report, which is based on price changes in repeat sales or refinancings on the same properties.
The state’s slower appreciation rate stems from the 2001 economic slowdown, from which Colorado was slow to recover, said Patty Silverstein, economist at Development Research Partners in Littleton.
“We are just now in 2005 starting to solidify the economic recovery,” she said. “This was not a region you saw a lot of migration to in the last year because there weren’t the job opportunities. What drives appreciation is migration.”
While the low ranking can be unsettling to homeowners wondering how much their homes are worth, Silverstein deemed the 5.6 percent growth rate good and said it could help the state become more competitive.
“From an economic-development standpoint, to see the tempering is welcome. From a competitive position, home prices in our area tend to be higher than competing cities,” she said.
Ingo Winzer, president of the Local Market Monitor, a Wellesley, Mass.-based housing-research firm, has described the Denver area as one of the most overpriced housing markets in the country. He now believes the slowdown has brought prices to a more sustainable level.
“When home prices go crazy, you have a very high risk that things are going to go bad. I would look upon this as a positive sign,” he said.
Among metro areas, Greeley ranked second to last in the nation at 264th for its 12-month appreciation rate of 2.2 percent. The Denver-Aurora area ranked 238th with appreciation of 4.1 percent.
Boulder’s appreciation rate was 5.96 percent, Colorado Springs checked in with 7 percent, Fort Collins-Loveland showed appreciation of 4.03 percent, and Pueblo’s appreciation rate was 4.4 percent.
Grand Junction led the state with a 10.04 percent gain, earning a ranking of 110th in the country.
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
