I second this choice for the party mentioned, since the OP said they were low on magic items.frankthedm said:Very young red dragon is large , but still CR5, so it should fit the bill for a hard fight where someone might die.
I wouldn't go higher than that unless you plan it to be an overpowering encounter (i.e. EL > average party level +4) - which can be fine from time to time (namely about 5% of the time, according to the DMG). However, you'll want to consider giving them some advance warning then and a good chance to either flee or negotiate.