Home prices in metropolitan Denver increased 1.6 percent in the second quarter but remained down 2.5 percent from the same period a year ago, according to the Standard & Poor’s/Case-Shiller Home Price Index.
Nationally, home prices increased by 3.6 percent in the second quarter. Twelve of the 20 metropolitan statistical areas surveyed have increased for three consecutive months, a sign of seasonal strength, the report said.
But analysts caution that Denver-area housing prices may continue to decline or remain flat.
Ryan McMaken, a Colorado Division of Housing economist, said June was the 12th month in a row that there has been a year- over-year decline in metro-Denver housing prices. McMaken sees a slight decrease in the area’s housing prices through year-end.
“There is definitely a weakness in the market,” McMaken said. Prices in the area are at levels found in December 2003.
Boulder mortgage banker Lou Barnes said the metro-area housing market is clouded by a “shadow inventory” that includes homes lingering in the foreclosure process or held by banks.
“That shadow inventory has grown hugely since the robo controversy of a year ago,” said Barnes, referring to problems last fall that stemmed from banks not properly verifying some paperwork. “The diminished flow of foreclosures creates an artificial sign of improvement.”
Barnes believes the Colorado housing market could be close to getting better. However, he said the outlook is clouded.
Patricia Silverstein, president of Littleton’s Development Research Partners, said Denver didn’t experience huge gains in housing prices prior to the collapse of the housing bubble. As a result, metro Denver didn’t experience such an exaggerated loss in housing prices as some areas.
“We are close to being out of the woods. But there are still challenges ahead,” she said.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
