Below average isn’t something most people aspire to, but that is what homeowners in metro Denver likely face after years of robust home price appreciation, according to Zillow.
Zillow said its Denver Home Price Index has risen 3.4% to $411,200 the past year through August. That contrasts with a gain in the national index of 4.9% to $229,600.
Higher interest rates weighed on the market in the first part of the year, and when they moved lower again, home price appreciation accelerated, but at a more modest pace.
“We have persistently strong consumer confidence and the significant drop in mortgage rates to thank for the housing market’s return to modest home value growth,” Skylar Olsen, Zillow’s director of economic research, said in her report.
Annualizing the quarter-over-quarter change through August, home prices are rising 3.4% nationally, while metro Denver’s gain is only running 1.1%, according to Zillow.
Both those are better than the 0.4% quarterly annualized pace seen in May for the U.S. and Denver’s annualized 0.6% decline.
Not every market saw gains turn positive again with lower mortgage rates. In California’s San Francisco and San Jose markets, home prices are down 1.9% and 10.8% respectively over the past year, according to Zillow’s counts.
And they are dropping on a quarter-over-quarter annualized basis in Las Vegas, Chicago, Portland, Seattle, Sacramento, Boston, Baltimore, New York, Los Angeles, Washington, D.C., and San Diego.
Major metros where homeowners are enjoying the greatest price momentum are Indianapolis, up 7.9%, Charlotte, N.C., up 7.1% and Atlanta, up 6.9%.
Tony Carnesi, CEO and managing broker of Keller Williams Realty DTC, said the prime summer selling season wasn’t as robust as expected this year in metro Denver, which he attributed to a colder than usual May and June.
“We had such a weird summer,” he said. “We usually see a summer spike. We never saw that. Our summer got so compressed.”
His hope is that the sales that were delayed this summer show up in the fourth quarter, or what he calls the second season.
Part of the struggle the local market faces is that sellers continue to hold unrealistic expectations of what they can get for their homes. That stubbornness has caused some listings that went on the market in March to still be sitting there.
“A lot of sellers have been overpricing their properties, and they are taking longer to sell,” he said.
To back up his point, he provides some statistics from the past week. In the past seven days in the six-county core metro area, there have been 1,847 new listings, but also 2,091 price decreases on existing listings.
But there were also 1,993 listings that went under contract, which points to demand still being there, he said.
