The Metro Denver Area Is In A Housing Bubble. Are You Prepared?
Existing home sales were expected to slow down in June, however, the drop was more than forecasted. Existing homes sales fell 1.7% month over month against expectations of a 0.6% decline to 5.27 million seasonally adjusted annual rate.
John H. Dolan has guest post where he describes a product that allows for more of a pure play on forward home prices -the Case Shiller home price index futures and options that can be traded on the Chicago Mercantile Exchange (CME).
Month over month, prices in the Denver Metro area decreased, falling 0.54% for median and 0.47% for average residential prices. Single-family homes sold prices dropped to $547,461. Year over year, the pace of the housing prices increase rose as well with the average residential prices rising 1.57% and the median residential prices up 1.9% from June 2018 to June 2019.
Existing home sales nationwide were up 0.9% year over year in the past month. Existing home sales year over year had been negative since the second half of last year and the start of 2019.
Month over month, prices in the Denver Metro area had an impressive increase given the weakness in recent months, rising 2.62% for median and 2.07% for average residential prices. Year over year, the pace of the housing prices rose with the average residential prices rising 3.36%, and the median residential prices rising 2.38% from May 2018 to May 2019.
Forecasters were expecting new home sales to fall 2.5% month over month in April 2019, but they were not prepared for this crash that occurred. New home sales tumbled 6.9% month over month after a positive revision for March 2019.
National existing home sales declined 0.4% in April 2019 after falling 4.9% month over month in March 2019. This is worrisome because during this two-month period mortgage rates have been falling to almost a one-year low. This is also the 14th month in a row of annual declines, which now makes it the longest stretch of declines since the housing crisis that occurred over a decade ago.
Year over year the pace of the housing prices increase rose as well with the average residential prices rising 1.5%, and the median residential prices are flat from April 2018 to April 2019. We were in line with our forecast of a 1.11% rise for single-family homes average sold price rising 1.51% year over year and the median rising 0.5% year over year.
Metro Denver rents have increased 0.2% month over month and 2% year over year. Metro Denver rents growth is above the national average of 1.3%. Denver’s median two-bedroom rent of $1,350 is above the national average of $1,170.
Month over month, prices in the Denver Metro area had a strong increase, rising 3.75% for median and 3.57% for average residential prices. Year over year the pace of the housing prices increase rose with the average residential prices rising 1.79% and the median residential prices rising 1.53% from March 2018 to March 2019.