Home prices in Metro Denver are much higher than they would have been without a pandemic, and while premiums are wide, they aren’t as extreme as in many other places. Monthly study from Florida Atlantic University And Florida International University.
According to the survey, Metro Denver is ranked 37th out of 100 major metros in April, with home prices 38.5% higher than expected based on long-term trends. Denver’s expected value is $ 461,734, based on trends in the Zillow Home Value Index dating back to 1996. Instead, it’s $ 639,316.
The Colorado Springs gap is even higher, at 45.9%, with an estimated price of $ 333,261 and an actual home price index of $ 486,182. It was ranked as the 23rd highest premium.
In 15 metropolitan areas, home prices are more than 50% above what is expected from historical trends. Boise, Idaho is the most overrated metro with 72.6%, followed by Austin, Texas with 67.7% and Ogden, Utah with 64.7%. Las Vegas, Atlanta and Phoenix were the three most overrated markets:
Home prices tend to cycle through periods of overvalue and undervalue, but eventually return to a long-term trend. During the housing bubble in the early 2000s, the overestimation approached 20% in Metro Denver. From 2008 to 2016, Metro Denver home prices were run at a discounted trend. Smaller premiums returned in 2016, but began to tighten again in 2019 and 2020.
As people sought more living space, the pandemic of the wave of home buying changed everything. Historically low mortgage rates have pushed up affordability. Listings are in short supply and prices have skyrocketed.
“Calculations are needed. In the analysis, Ken Johnson, an economist at Florida Atlantic University, separates home prices and rents so much from the basic long-term trends without major market problems. You can’t. “If so, there are few markets to escape unscathed.”
The S & P Core Logic Case-Shiller Index, released Tuesday, reported that house prices in March rose 20.6% year-on-year across the country. It increased by 23.7% in Metro Denver, but increased by 34.8% in Tampa, the market with the largest increase.
Zillow’s economic data analyst, Dan Handy, said housing demand remained strong this spring, despite rising home prices and mortgage rates for the first time in 10 years. However, there are signs that the market may be approaching an inflection.
“The cost of mortgages is more than 50% higher than it was a year ago, and future buyers may start rethinking what they can buy. Sellers are already seeing higher price cuts, so they Maybe they’re responding to meet buyers where they are. As many buyers cut prices and increase inventories, price increases are likely to begin returning towards the planet, “Handy said. I mentioned in the commentary on the numbers.