May 6, 2008 12:01 AM
Denver home values fall less than nation's
Despite all of the doom and gloom surround the Denver-area residential real estate market, the local housing market fares quite well relative to the rest of the country.
The latest report that shows this trend comes from Zillow, the company that made its name in the real estate industry by estimating the values of individual homes across the nation.
A Zillow report released today shows that homes prices in the Denver-Aurora metropolitan statistical area, the 21st largest MSA in the U.S., dropped by 5.1 percent in the first quarter from a year ago.
That is consistent with the S&P/Case-Shiller index of 20 markets released last week.
The Zillow report tracks the top 30 metropolitan areas in the U.S.
The median price for a home in the Denver-Aurora area was $213,000.
Eighteen of the metro areas had higher-priced median homes and 21 of the metropolitan areas showed bigger drops.
The largest percentage drop took pace in the Riverside-San Bernardino-Ontario, Ca.- MSA, which saw a 26 percent drop. The median price there was $287,500.
Dallas-Fort Worth was the only market to show an improvement, gaining a mere 1.1 percent. The median price of a home in Dallas sas $130,500. Only Pittsburgh and Cleveland-Elyria-Mentor, had lower median prices, at $105,500 and $124,000, respectively.
The median price in Denver was exactly the median price for the overall U.S., which also was $213,000.
However, when Zillow looked at a five-year annualized percentage change, Denver did not do so well, compared to other cities.
The Denver region showed a 0.2 percent drop over five years. That compared with a 4.7 percent overall increase for the U.S. during that time period.
The city with the best five-year appreciation record overfive years was Virginia Beach at 12.2 percent.
But if you look at cities that are more typically compared with Denver, Phoenix home prices over the past five years rose by 7.6 percent; Dallas and Chicago each rose by 2 percent; Seattle rose by 8.6 percent; and San Jose rose by 5.7 percent.
Las Vegas, with its much publicized rise and fall, was not big enough to make the list.
Despite continued home value declines nationwide, U.S. homeowners remain bullish about their own home's value, Zillow said.
For the second consecutive quarter, homeowner perception about changes in their personal home value is markedly off from the reality, according to a recent Zillow survey of homeowner confidence conducted by Harris Interactive..
According to the survey, 72 percent of homeowners believe their home's value has increased or stayed the same the past year
The reality is 75 percent of U.S. homes actually decreased in value from the same period a year ago, according to Zillow. In fact, the 7.7 percent year-over-year drop was the largest year-over-year decline in more than a decade, according to the Zillow Q1 Home Value Report released separately today.
"While we assume there's a fair bit of owner denial reflected in these results, we also believe a large portion of the population simply isn't paying close attention to their housing market because they're not currently looking to sell or finance," said Stan Humphries, Zillow.com vice president of data & analytics. "But even among those who say they're planning home-related activities this year, confidence appears strong despite continuing declines. Approximately one-third of homeowners say they are equally or more likely to sell their home, refinance or take out a home equity line of credit this year, which is essentially unchanged from sentiment in the fourth quarter."
Since the confidence survey was first conducted last December, homeowners show signs they are moving closer to reality as five percent more respondents in the first quarter said they think their home value has decreased in the past year compared to those surveyed in the fourth quarter of last year.
Homeowners in the Northeast may have a better grasp on reality than those in other parts of the U.S. as 27 percent of Northeast homeowners believe their home increased in value in the last year, which was in line with the actual increase (26%).
While more homeowners in the West believe their home has decreased in value, 37%, it's wildly off from the actual 85 percent of homes that declined in value in the last year, according to Zillow.
The percent of homeowners who say they plan to make home improvements, sell or finance a home in 2008 remained essentially unchanged from last quarter despite further market deterioration. About one-third of homeowners say they are equally or more likely to sell their homes, take out a home loan, refinance or take out a second mortgage, regardless of their perception of home value change.
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