Denver residence worth appreciation hits one other report, however earnings are slowing

According to the latest S&P CoreLogic Case-Shiller Denver Home Price Index, the Denver metropolitan area’s annual home price appreciation rate hit a new high of 21.5% in August, barely beating its previous record profit of 21.3% in July.

But the monthly change in the Denver House Price Index in August was half the monthly rate in July, 0.9% versus 1.8%, a sign that future rises, while still strong, will not be nearly as robust.

Denver’s profit for the year exceeded its total US price gain of 19.8% on home prices. But even there, monthly growth slowed from 1.7% in July to 1.2% in August.

“The US real estate market showed continued strength in August 2021,” said Craig J. Lazzara, global head of index investment strategy at S&P DJI, in comments on the monthly report. “Each of our city and composite indices are at their all-time highs, and year-on-year price growth remains very strong, although it is a little slower compared to the previous month.”

Lazzara said responses to the pandemic are likely to fuel sharp appreciation rates when city dwellers buy suburban homes. It remains to be seen whether these purchases represent a demand that would have happened over the next several years or mark a fundamental shift in the locations preferred by buyers. This second scenario would be more supportive of future earnings than the first.

“The August dates are consistent with both statements,” he said.

Phoenix recorded the strongest gains of the 20 metros tracked at 33.3%, followed by San Diego with 26.2% and Tampa with 25.9%.

“While demand remains strong and buyers are generally still paying more for property than asking price, the slower acceleration in property prices suggests buyer fatigue is on the way, particularly for higher-priced properties, where month-over-month price growth has been accelerating larger compared to houses in the lower category, ”said Selma Hepp, deputy chief economist at CoreLogic, in comments on the index.

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