Metro Denver home prices rose 10.2 percent in January, marking the 12th consecutive month of double-digit annual price increases, according to the latest update of the S&P/Case-Shiller Home Price Indices. Portland, Ore., recorded the biggest annual jump in home prices in January at 11.8 percent, followed by Seattle at 10.7 percent and San Francisco at 10.5 percent. Home prices nationally are increasing at a 5.4 percent clip, twice the rate of inflation. Denver's home price appreciation is running at nearly twice the national rate.
"The low inventory of homes for sale — currently about a five-month supply — means that would-be sellers seeking to trade up are having a hard time finding a new, larger home," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, in a statement. Denver's inventory is much tighter than the overall U.S. market. A lack of new home construction in particular has contributed to inventory imbalances, Blitzer said.
All 20 of the metros tracked showed increases in home prices both year-over-year and month-over-month, with seasonal adjustments. Chicago, New York and Washington, D.C., are the metros with the slowest rates of appreciation.
In a commentary on the report, Zillow chief economist Svenja Gudell said that the housing market should remain stable and healthy as long as wage and job opportunities hold up. But inventory shortages will continue to put pressure on first-time buyers. "This does create some challenges for home buyers, particularly first-time and lower-income buyers, struggling to find a home that fits both their needs and budget," Gudell said.
Metro Denver's current run in home prices has a ways to go to match the last big run of double-digit annual gains during the tech and telecom boom. That one lasted from February 1999 to August 2001, according to S&P/Case-Shiller.