Sunday, August 2, 2009


Okay, so it's not exactly a roaring recovery, but it is a sign of hope.

For the first time in 34 months, the Case-Shiller national housing index showed a rebound in prices, with values up in May by 0.5% over April's figures. The Case-Shiller report tracks the 20 largest markets in the county (including Denver) and reports its numbers with a lag time of about two-months.

Prices were down by over 17% year over year on a national level, but decreased by just 4% in Denver (and those value losses were almost all at the higher end of the market, which remains extremely soft above $500,000).

While the Denver market has been in recovery mode for more than a year, the Case-Shiller report indicates that, on a national level, buyers are coming back into the market in larger numbers and confidence is being restored.

While I do not feel the Case-Shiller numbers are particularly relevant to Denver (I have always believed that "all real estate is local"), it is important because a recovery in housing confidence will put more pressure on interest rates... and rising rates will be one of the next big challenges for both the housing market and our overall economy, in my opinion.

So take the good news with a grain of salt... recognize that things may be improving a little bit at the national level, but remember that the Denver market is probably 18 months ahead of this curve, since we were one of the very first markets into the housing (and subprime meltdown) abyss.

Keep your eye on interest rates - because good news for the housing market is a sure indicator that higher interest rates are ahead.