A year ago, the real estate firm Zillow predicted that metro Denver’s housing market finally would put away the climbing ropes, stop defying gravity and see only a 1 percent increase in home values.
But the latest Zillow Home Value Index for metro Denver, out Thursday, shows a 14.2 percent increase from April 2014 to last month, the steepest climb among the nation’s 35 largest housing markets.
The metro Denver home value index, now at $294,100, has pushed ahead of Portland, Ore., and Riverside, Calif., and climbed into the country’s 10 costliest metro housing markets.
“We do recognize that when you have the most expensive housing market without an ocean, that may not be something to brag about,” said Patty Silverstein, an economist with Development Research Partners in Littleton, in an earlier interview.
Things are no better for renters.
The Zillow Rent Index over the past year rose 11.6 percent to $1,868 a month, the third-biggest increase after San Jose’s 19.9 percent and San Francisco’s 14.9 percent.
Denver now has the nation’s eighth-highest rents, according to Zillow.
The Zillow rent number includes single-family homes, but average apartment rents in metro Denver broke above $1,200 in the first quarter, according to a separate survey from the Apartment Association of Metro Denver.
Metro Denver apartment rents the past two quarters have risen at annualized rates topping 12 percent, the
Svenja Gudell, Zillow’s senior director of economic research, said Denver faces a problem of supply that can’t rise fast enough to meet demand.
“Roughly 300 new building permits have been issued in the Denver area for every 1,000 new residents that moved to the city over the past couple years, at the low end of permitting activity among large metros,” she said.
The permits are for higher-density projects, which should help ease the crunch, Gudell predicts.
But the projects are mostly higher-rent, which doesn’t address the strong demand for affordable units.
And it isn’t clear exactly why Denver has done more poorly than metros with similar or even faster rates of population growth in boosting its housing stock.
Dallas, for example, has seen population growth comparable to Denver’s and an 11 percent gain in home values the past 12 months.
But Dallas home values, at $159,741, are rising from a much lower price point. And rents there are up a much more moderate 5.7 percent to $1,465, according to Zillow.
