Annual home price gains in metro Denver are continuing to deaccelerate rapidly, but not as sharply as in other Western markets like San Francisco, Seattle, Phoenix and Las Vegas, according to a report Tuesday from S&P CoreLogic Case-Shiller Indices.
For nearly a year, from July 2021 to May 2022, Denver’s home price index rose more than 20% a year, topping out at a record speed of 23.6% in March of last year. But prices started falling month-over-month in June and annual appreciation dropped into the single digits in September. As of November, the rate of annual gains on the index fell to 6.1%, below the U.S. pace of 7.7%, and the slowest rate of appreciation since September 2020.
Denver’s home price index is now down 5% from the peak, according to the Case-Shiller indices, one of the most closely watched measures of home prices in the country despite its lag.
“Housing market conditions deteriorated considerably at the end of 2022 as mortgage rates hit a 20-year high in November, wiping out a considerable portion of homebuyers’ purchase power. As a result, the November CoreLogic S&P Case-Shiller Index continued to cool off posting a 7.7% year-over-year increase, marking the seventh straight month of slowing home price growth and the slowest increase since September 2020,” said Selma Hepp, chief economist with CoreLogic, in comments on the report.
San Francisco became the first of the 20 metro markets tracked to roll over on an annual basis, with prices down 1.6% year-over-year as of November. Seattle is barely hanging on with a 1.5% gain. Pandemic boomtowns like Phoenix, Las Vegas and Seattle are seeing some of the biggest decelerations, Hepp said.
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The strongest markets in terms of annual price appreciation are Miami, up 18.4%; Tampa, up 16.9%; and Atlanta, up 12.7%. Looking at the monthly change, only Chicago and New York didn’t see home values fall on a seasonally adjusted basis.
The November report lines up with the month when mortgage rates had a near-term peak, crossing above 7% on a 30-year loan. Rates are now running closer to 6.2%, according to the Mortgage Bankers Association, and brokerage firm Redfin reports that housing markets showed signs of stabilizing in January, which might set the stage for monthly price gains to return this spring.
Metro Denver’s index is down about 5% on a seasonally adjusted basis from the May peak, but the pace of month-over-month declines are showing signs of slowing.
“As rates have come down in the first weeks of the new year, housing market activity has started to thaw out, but 2023 will likely still be a relatively tamer year for housing with many expecting prices to flatline at best,” predicted Zillow Senior Economist Nicole Bachaud in an email commenting on the report.
