Report: More than one-fifth of Denver-area homes are overvalued

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DENVER -- A new report listed Denver among the 15 least affordable cities for home buying and shows houses are overvalued.

Even though the report shows homes are overvalued, it doesn't mean people still won't pay as expert pointed to Denver's popularity. Experts said people will make the stretch to live in a popular area.

Using a risk index by Arch Mortgage, metro Denver home prices were 22.1 percent overvalued in the third quarter. That's close to the all-time high of 22.9 percent in 1980.

Denver set a record high for home prices last year and the market is still hot. But it's a big problem for families looking to buy a home.

Gov. John Hickenlooper spoke about housing concerns during his State of the State address on Thursday.

"Across our state on almost every rung of the economic ladder, Coloradans are being priced out of housing that they can afford," Hickenlooper said. "We have a housing crisis, plain and simple.

"Many families are stuck, held down. Too much of their income goes to rent and home ownership is too far out of reach to many people, and not enough units adds up to unaffordable rent and skyrocketing home prices. I’ve said it before, we need to work on more affordable housing."

Hickenlooper said part of the answer is construction defects legislation. It nearly passed last year.

It would make it harder for homeowners to sue developers over bad construction work. Advocates said that will protect builders from frivolous lawsuits, making housing more affordable.

Many, though, are opposed, saying the laws are designed to protect homeowners.