Case-Shiller: Denver Home Prices Inch Toward a Post-Peak Low

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – February data is released in April).

Here are the basic Case-Shiller stats for the Denver area* as of February:

February 2011
Month to Month: Down 1.2%
Year to Year: Down 2.6%
Prices at this level in: February 2002
Peak month: August 2006
Change from Peak: Down 13.6% in 54 months
Low Tier: Under $204,200
Mid Tier: $204,200 to $311,334
Hi Tier: Over $311,334

Nineteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between January and February (the same as December to January). Detroit of all places was the only city that saw a month-to-month gain (up 1.0%).

Here’s a look at the latest local tiered data, back through 2000:


And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:


All three of Denver’s price tiers took about the same hit in February. Month to month, the low tier was down 1.4%, the middle tier fell 1.1%, and the high tier decreased 1.2%.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:


Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.


Ten of the twenty cities tracked by Case-Shiller hit another new post-peak low as of February. The 20-city composite index sits just barely above its April 2009 post-peak low (139.27 in February vs. 139.26 in April 2009).

Methodology: The Case-Shiller index tracks price changes in sets of homes of similar size and style to better determine changes in what people are willing to pay for the same home over time. If data is available from an earlier transaction for the same home, the two sales are paired and treated as a “repeat sale.” Repeat sales that are too far apart, sales between family members, lot splits, remodels, and property type changes (e.g. from single-family to condos) are excluded from the calculations. All remaining repeat sales are totaled together and weighted based on the time between each sale, then the data for the most recent three months is averaged together to create a given month’s index value (i.e. – September’s index represents the average of the data from July through September).

The three price tiers plotted in the charts below simply represent the top, middle, and bottom third of all sales, based on the initial sale price. In other words, if there were 3,000 sales in the three-month period, 1,000 of them would be in the low tier, 1,000 in the middle tier, and 1,000 in the high tier, by definition.

*[Case-Shiller defines Denver as the entire Denver-Aurora, CO Metropolitan Statistical Area, which includes all of the following counties: Adams CO, Arapahoe CO, Broomfield CO, Clear Creek CO, Denver CO, Douglas CO, Elbert CO, Gilpin CO, Jefferson CO, and Park CO]