Denver home prices soared 11.3 percent in July from July 2015, the third best in the nation, according to a report released on Thursday by Zillow.
Only Portland, with a 14.7 percent year-over-year gain, and Dallas, with an 11.9 percent increased, topped Denver.
Denver’s home appreciation rate was more than twice the U.S. national average of 5.1 percent.
Nationally, July marked the 48th consecutive month of home prices rising, according to Zillow.
The median price of a Denver-area home was $339,600, making Denver the most expensive housing market between the East and West Coasts, according to Zillow.
Home prices in Denver were 72.7 percent higher than the national median home price of $196,600, according to Zillow.
Independent Denver broker Gary Bauer wasn’t surprised by Denver’s ranking by Zillow.
“Clearly, that analysis of the year-over-year data by Zillow for Denver is correct,” Bauer said.
The Denver-area market did slow in July from June, but that was primarily for usual seasonal reasons and because many schools stared classes earlier this year, putting pressure on home buyers to move earlier, he said.
Demand for local houses also is being fueled by people moving here, especially young professionals, he said.
“Denver is a destination city,” Bauer said.
“Denver is becoming the millennial capitol of the United State,” he added.
Affordability is an issue, but Denver is still far more affordable than many cities on the East and West coasts, he said.
“Cities like Denver area looking at measures to provide more affordable housing and home builders are building some smaller homes, often without basements, to make them more affordable,” Bauer said.
Also, many Baby Boomers are beginning to “right-size,” which can mean moving either into a bigger or a smaller home, he said.
“That is putting more homes on the market,” Bauer said.
The inventory of homes on the market is growing slightly, although there is enough consumer demand for far more homes than are available, he said.
Denver is not alone grappling with a shortage of homes.
“In most areas, the market is being driven mainly by a strong labor market and tight supply, especially among entry level homes that first time buyers are after,” said Svenja Gudell, chief economist for Zillow.
“But some markets…are adding more jobs and attracting more residents, putting the pressure on home values and rents,” she said.
Zillow puts the median monthly rent in the Denver area at more than $2,000. The Apartment Association of Metropolitan Denver, however, has said while rents have risen to record levels, Zillow’s rental figures are inaccurate.
The AAMD put the second quarter median rent at $1,324.