Despite Denver Foreclosures, Home Values and Prices Rose

by Peter Vernon on cities

Denver foreclosures are still high compared to other metro areas, but home values, home prices and sales of homes from builders in the city have been improving, based on reports from real estate research companies and from the Colorado Division of Housing.

The Denver metro area was third in a list of U.S. cities with the highest gain in house values for the 11-month period ended November. Denver gained a total of $10.7 billion in total home values, next only to Boston and Providence, Rhode Island.

While many other major cities lost billions in home values, as shown in the overall loss of $489 billion during the 11-month period, home values in Denver increased by $10.7 billion to $215.7, a sharp contrast to the drop of $20.2 billion in home values in the area in 2008.

Los Angeles suffered the biggest drop in home values, losing a total of $60.8 billion, followed by Chicago, with a loss of $49.6 billion. New York City also lost $49 billion; Miami and Fort Lauderdale lost $45.9 billion; and Phoenix lost $45.1 billion.

According to the Colorado Housing Division, Denver foreclosures did not increase as much as other areas outside Denver, so they were not able to dampen sales of existing homes and not-newly-constructed homes from builders in November.

Total sales of existing homes and not-newly-constructed homes sold by builders reached 3,599 units, a jump of 23 percent compared to the 2,920 units sold in November 2008 and an increase of more than 9 percent from the 3,958 units sold the previous month.

According to Denver realtors and analysts, the rise in home sales was spurred not only by first-time home buyers who are availing of the tax credit offered by the federal government, but also by the rising number of move-up buyers, as shown in the rise in sales of higher-priced homes.

The price median for single-family houses in November was $218,000, an increase of almost 12 percent from the $195,000 median in November 2008, but a 1.8-percent decrease from the median of $222,000 during the previous month of October.

The price median for condo units was $135,900, a 4.5-percent increase from the median of $130,000 in November 2008 and a 0.7-percent increase from the median of $135,000 in October 2009.

There were also 179 units sold in November which were sold at prices between $600,000 to more than $2 million, indicating significant improvements in the high-priced bracket.