Denver expected to top nation in home price appreciation again in 2016

“Trendy tech centers like San Francisco, Seattle and Denver hogged the spotlight in 2015,” Svenja Gudell, Zillow’s chief economist, said in a statement. “But this year, the markets that shine brightest will be those that manage to strike a good balance between strong income growth, low unemployment and solid home value appreciation.”

Denver’s home values rose just under 16 percent in 2015 and are projected to gain another 5 percent this year, according to the Zillow report.

The Denver metro area’s housing market posted a record year in 2015, with 55,509 home sales totaling $20.16 billion, according to a report released last week by the Denver Metro Association of Realtors.

Inventory shortages coupled with hordes of new residents settling along the Front Range contributed to the boisterous market that drove sales prices higher, created bidding wars, drove up rents and negatively affected lower-income residents.

Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace

Zillow’s top 10 housing markets for 2016

1.) Denver

2.) Seattle

3.) Dallas-Fort Worth, Texas

4.) Richmond, Va.

5.) Boise, Idaho

6.) Ogden, Utah

7.) Salt Lake City

8.) Omaha, Neb.

9.) Sacramento, Calif.

10.) Portland, Ore.

In 45 of the 100 markets studied, “bargain” listings came with no difference in price, making the term meaningless. Metro Denver was in a group of cities where there was a discount, but not much of one.

Denver tied with Dallas for the eighth-smallest discount, at 3.9 percent. Colorado Springs was the only other Colorado city on the list, with a 5.5 percent discount.

At the other extreme are cities, mostly in the Northeast and the Rust Belt, where listings that said bargain came with price discounts from 10 percent to 20 percent below comparable properties that didn’t use the term.

Dayton, Ohio, had the largest discount in bargain listings at 19.6 percent, while Toledo, Ohio, was at 18.1 percent. In those markets, “bargain” meant a bargain.

Real estate experts warn buyers to do their own research when they see terms such as “bargain,” “below-market” or “substantial savings” or to obtain independent appraisals.

“It is a relative term,” said Kevin Risen, executive vice president of Coldwell Banker Residential Brokerage in Denver.

Distressed sellers needing a quick sale sometimes will offer a substantial price reduction, he said. But in a hot market such as Denver, where lower-priced homes can sell quickly, sellers haven’t been as motivated to discount.

Risen said he hasn’t heard the term “bargain” pop up much in metro Denver listings, and Trulia found in its study that less than 1.2 percent of listings contained the word.

Metro Denver posted 55,509 home sales worth a record $20.16 billion in 2015. That was split between $16 billion for single-family homes and $4.16 billion for condos and townhouses.

But in the past three months, the housing market has moderated.

The inventory of homes available for sale fell 22.9 percent in December from the previous month to 4,384. And the 2,275 new listings in December were down by nearly a third from November and were even below December 2014 levels.

Despite the sharp decline in inventory, the average number of days on the market rose to 40 in December, up from 36 in November. Usually a drop in inventory causes homes to sell more quickly.

Home sales still increased 14.75 percent in December, reflecting in part a backlog of closings from November that spilled over into the final weeks of the year.

Home prices didn’t move much from November to December, with the average price up 3.3 percent to $374,900 and the median price flat at $315,000.

But for the year, the average price of all homes sold was up 10.65 percent, while the median price was up 10.51 percent, making Denver a leading market for home price appreciation.

“December proved to be a great month for home buyers who were able to snatch up previously overpriced listings by making offers without competing offers, and without the same sense of urgency as in previous months,” the report said.

Rael also noted that some builders were facing lengthy delays in getting new homes to buyers, who are facing waits of 10 months to a year in some cases.