Getting your player ready...
Home values in the Denver-area have fallen to almost an 11-year low, according to a report released today by Zillow.com.
The national report by the Seattle-based real estate website, places the value of a typical Denver-area home at the end of March at $192,300, which Zillow says is back to December 2000 levels. Metrolist, by contrast, earlier reported that the average price of all homes sold in the Denver area in March was $249,644.
When adjusted for inflation, a home that sold for $192,300 in 2000 would cost $249,551 in today’s dollars.
According to Metrolist, the average price of all homes sold in December 2000 in the Denver area was $217,211 – or $281,879 in today’s dollars.
Not quite as grim as Zillow says
Mike Rinner, of the Genesis Group, which tracks the new and resale housing market along the Front Range, said that he doesn’t think the Denver market is quite as bad as Zillow shows.
“I think that is a bit aggressive,” Rinner said. “I think we are closer to 2003-2004 levels, than 2000-2001 levels.”
Independent broker Gary Bauer agreed with Rinner. “I think we have gotten down to the 2004 levels and we may be in double-dip territory, but I don’t think we have ever been back to to 2000 levels,” since the housing crisis began about four years ago, Bauer said.
Zillow on target
But Jason Miller, owner of Milan Realty, said that the Zillow numbers ring true.
“I think this is the one area that Zillow can report their data objectively,” Miller said. “A home either sold for more than an owner paid or not.”
While Zillow is not perfect, Miller said he is not as quick to “throw Zillow under the bus,” as many fellow Realtors.
Homeowners drowning?
Zillow also said that 41 percent of Denver-area single family homes with mortgages are “underwater,” that is, their mortgages are worth more than mortgages, compared with 28.4 percent for the overall country.
At the same time, Denver-area homes are down 17.2 percent from their peak in June 2006, compared with a 29.5 percent drop for the nation.
Neither Rinner nor Bauer are buying Zillow’s analysis of the number of underwater homeowners in the Denver area.
“That doesn’t make any sense,” Rinner said. “How can we have so many more homes under water than the national average, but be so much lower off the peak than they are nationally?”
He said that would only be the case if Denver-area borrowers took out a disproportionate number of subprime-type mortgages that are still working their way through the system.
On the other hand, Rinner is not arguing that the overall trends being reported by Zillow are wrong.
Short sales driving down prices
The overall market does show signs of softening, he said. Rinner said one reason seems to be due to the increasing number of short sales in the Denver area. A short sale is when a lender takes less than the mortgage amount.
Rinner has heard recently that banks are more aggressive than ever to do a short sale, in order to avoid the cost, time and hassle of a foreclosure.
“I think that is part of an overall decline in prices, but I don’t know how big of a factor it is,” Rinner said.
