The latest Case Shiller index of home prices is out and Denver has hit an all-time high of 140.98 – surpassing the previous peak of 140.28 in August 2006. The index showed a 9.7% increase year-over-year – consistent with several previous month’s annual gains.
The Case Shiller Index tracks re-sales of properties over time, providing a paired sales analysis of the changes in home prices for the area.
In coming months, look for the index to taper a bit as the seasonal cycle of home prices kicks in (indicated by the regular spikes within the red line of the chart below):
The Denver Business Journal included the following:
Nationwide, home prices rose 12.2 percent in May from the previous year in the 20 large metro areas followed by the Case-Shiller report.
Erik Johnson — senior U.S. economist for IHS Global Insight, a unit of Douglas County-basedIHS Inc. — said the 20-city average home-price gain of 12.2 percent was the largest 12-month increase since early 2006.
“Home prices continue to rise across the country because of inventory shortages,” Johnson said. “Construction of single-family homes has been depressed since late 2007, while the U.S. population has increased by more than 12 million in that time. Since underlying demand is, by our estimate, running at a rate nearly twice that of housing completions, the shortages are likely to get larger before getting smaller. This means that home price gains in most cities and state are likely to remain strong for some time.”