Articles of Interest

There is some good news on the foreclosure front in Colorado.

According to data released in mid-May by the Colorado Department of Local Affairs and its Division of Housing, completed foreclosures fell for the third straight quarter, with those numbers declining 14 percent from the end of fourth quarter 2008 to the close of the first quarter. The Division of Housing research states there were 4,354 completed foreclosures during the first three months of the year, down from 5,899 for the same period last year.

However, new foreclosure filings, which signal the start of the foreclosure process, increased for the third time in three quarters, climbing 13 percent to 10,745 in the first quarter, up from the fourth quarter's total of 9,481. Yet, when comparing year-over-year figures, new filings fell 8 percent from the first quarter 2008 total of 11,634.

The Colorado Division of Housing says the statewide declines were driven by sharp drops in foreclosures in Adams, Arapahoe, Denver and Weld Counties, continuing a trend that began in 2008. In 2006 and 2007, Adams, Denver, Arapahoe, and Weld counties were the hardest hit counties in terms of foreclosures, but totals in completed foreclosures in those counties began to decline significantly by the middle of 2008, the division says.

While the figures are a positive indicator for the Colorado housing market, there's room for improvement.

Colorado ranked No. 9 among all states in RealtyTrac Inc.'s foreclosure activity report for April.  According to the firm's findings, 5,495 Colorado properties were in foreclosure in April, or one foreclosure for every 387 households.

Still, the Colorado foreclosure rate was below the national average.  Also, foreclosure activity in the state is on the decline, RealtyTrac says, with foreclosures in April dropping 1.52 percent when compared to March and down more than 9 percent when compared to April 2008.

Mixed Bag for Denver Real Estate Market:

While some signs of improvement are beginning to surface within the Denver area housing market, there are other indications that any road to a recovery will be a long one.

MLS data from Metrolist for the month of April states that the number of Denver-area real estate closings numbered 2,706, down more than 19 percent from the 3,353 recorded in April 2008.  Year-to-date closings for the market numbered 906 at the end of April, representing a near 13 percent decline from the 1,040 year-to-date closings registered at the close of April 2008, the Metrolist data states.

There were 740 active listings in the Denver market at the end of April, down nearly 47 percent from the 1,393 active listings recorded in April 2008.  The number of new listings also was down, totaling 416 in April 2009.  That's a 37 percent decline from the 661 new listings reported in April 2008, according to the Metrolist numbers.

The average number of days a property stays on the market in Denver declined, however, from 98 in April 2008 to 85 in April 2009, according to the MLS data.

There were some bright spots in the Metrolist statistics.

East/southeast suburban areas witnessed a 12.2 percent jump in closed residential sales in April. Also, the area saw a 50 percent rise in condo closings during the month.  In addition, residential closings also are on the increase in foothills communities such as Evergreen and Conifer, states the April MLS figures.

Condo closings also jumped in Broomfield, western Douglas County, South Jefferson County and the Northeast and Northwest portions of Denver, according to the Metrolist research.

Denver Program Takes Aim at Foreclosures:

The Denver Office of Economic Development has launched two programs that aim to address residential foreclosures and spur the revitalization of neighborhoods heavily impacted by a tumbling housing market.

The $25 million Mortgage Credit Certificate Program launched in mid May by Denver's Office of Economic Development will assist homebuyers and homeowners with high-cost or sub-prime loans that are at risk of foreclosure. Also, as part of the effort, the city announced partnerships with two consortiums led by the Denver Housing Authority and the Denver Urban Renewal Authority to re-develop foreclosed properties through the federal Neighborhood Stabilization Program.

The Mortgage Credit Certificate Program is funded through $15 million from Denver's Private Activity Bond and $10 million from the state of Colorado Private Activity Bond, provided through the Housing and Economic Recovery Act of 2008. Also, the Neighborhood Stabilization Program is providing the City and County of Denver with $9.6 million to acquire, redevelop and resell foreclosed properties that might otherwise become sources of abandonment and blight.

 "We're helping to stem the tide of foreclosure through a comprehensive strategy that creates economic opportunities for our community through job creation and the sustainable redevelopment of housing," Denver Mayor John Hickenlooper said in a statement.

City officials said the Mortgage Credit Certificate Program would benefit about 180 households throughout Denver. It will target homeowners with any adjustable rate single-family mortgage loan that originated between January 2002 and December 2007. Additionally, the program is available for eligible homebuyers to purchase a home.

Denver Bucking the Population Trend:

With falling home prices and a sour economy that still has consumers on edge, not a lot of people are moving in and out of residential properties these days.

Because of that, parts of the nation are not growing as fast as they have in the past. Among big cities, however, Denver is bucking the trend, posting decent population gains through last year.

According to data from the U.S. Census Bureau released in March, Denver ranked No. 8 in terms of growth when compared to other metropolitan areas with more than 1 million people. Between July 2008 and July 2007, the Mile High City saw its population grow by 2.2 percent, to 2.506 million. The Census Bureau estimates that Denver added a little more than 53,000 new residents during that 12-month period.

Denver shared its No. 8 ranking with two other cities. New Orleans and Atlanta also saw their respective populations grow by 2.2 percent between July 2007 and July 2008.

Raleigh, N.C., was tops in the nation in terms of growth, witnessing a 4.3 percent increase in population between July 2007 and July 2008.  Austin, Texas, was second, with a 3.8 percent growth rate.

A lot of buzz surrounds Denver and its attractiveness to potential movers.  An October 2008 survey conducted by Pew Research Center claims that Denver is the most popular city in America.  According to the company's study, people are attracted to the area's skiing and outdoor activities, the city's culture and vibrant nightlife, as well as Denver's business opportunities.

Nationally, Buyers Returning to the Market:

Nationally, there are encouraging signs emerging for the real estate market.

Historically high housing affordability and low mortgage interest rates, combined with buyer opportunities in the distressed sales market, have increased home sales in several parts of the country, says National Association of Realtors Chief Economist Lawrence Yun.

First-time buyers are attracted to deeply discounted and distressed home price, says the real estate analyst.  Nationally, about half of all recent transactions have been distressed sales, while 15 percent to 20 percent have been short sales and 30 percent to 35 percent have been foreclosures, according to the association's data.

While the statistics may appear unfortunate for some consumers, that situation along with current home buying incentives have created an impressive window of opportunity for potential homebuyers, says Yun.

"The stimulus and falling inventory levels will help stabilize prices," says Yun, who presented the latest research from the National Association of Realtors at the group's Economic Issues and Residential Real Estate Business Trends Forum in May.  "My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010."

Evidence of a recovery is already surfacing in California, where home sales are rising much faster than anticipated, says Yun.  Some areas in the state are seeing a 70 to 80 percent increase in sales. Yun attributes the California surge to buyers who may have been sitting on the fence but are now taking advantage of the opportunities in the state's housing market.