Thursday, April 17, 2014

Home loan payoffs in Colorado fall to five-year low

The number of home loans paid off in Colorado fell 49 percent from the first quarter of 2013 to the first quarter of 2014, a decline partially fueled by increasing mortgage rates during the second half of 2013. According to a new report released today by the Colorado Division of Housing, public trustees in Colorado released a total of 50,128 deeds of trust during the first quarter of 2014, which was the lowest quarterly total recorded in any quarter since the Division began collecting quarterly totals in 2008. 98,321 deeds were released during the first quarter of last year.

Typically, a release of a deed of trust occurs when a real estate loan is paid off whether through refinance, sale of property, or because the owner has made the final payment on the loan. Decreases in release activity occur as refinance and home-sale activity decreases, and rising release totals typically indicate increases in the demand for home loans and real estate.

Release activity also fell from the fourth quarter of 2013 to the first quarter of 2014, dropping 19.6 percent.  There were 62,312 deeds released during the fourth quarter of last year.

“This is the fourth quarter in a row of declines in release activity, and it looks like the most recent refinance boom is already over,” said Ryan McMaken, an economist with the Colorado Division of Housing. “Mortgage rates are still low compared to where they were in 2008, but we’ve seen some significant increases in rates since 2012.”

Trends in release activity were not uniform across the state, although all of the 21 counties surveyed reported decreases in release activity from the first quarter of 2013 to the first quarter of this year. The largest increases were reported in Broomfield and Boulder counties where release activity decreased 61.5 percent and 58.9 percent, respectively. The smallest decreases were found in Eagle and Alamosa counties where activity decreased 21.1 percent and 31.1 percent, respectively.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity during 2014’s first quarter were Douglas, Summit, and Weld counties. The counties with the least activity were Fremont, Pueblo and Delta counties.

“Release activity is still relatively strong in some high-income areas and places with strong employment,” McMaken said.

Totals for releases of deeds of trust are collected quarterly by the Colorado Division of Housing. This report tracks releases of deeds of trust as reported by public trustees in Colorado. The report includes twenty-one counties which are chosen based on population size and to ensure that as many regions of the state as possible are represented. More than 90 percent of all occupied households in Colorado are within the twenty-one counties chosen.

Wednesday, April 2, 2014

FHFA: Colorado Home Price Growth Falls Behind National Growth Rate

Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), rose 7.5 percent from the fourth quarter of 2012 to the fourth quarter of 2013. According to the fourth-quarter 2013 HPI, released last month by FHFA, the home price index for Colorado, in year-over-year comparisons, has risen for the eighth time in a row, fell to the lowest year-over-year growth rate seen in five quarters. Looking at the past two years overall, however, growth rates are the highest seen since the dot-com boom of the late 1990s in Colorado.

The Colorado HPI is now about even (up 0.03 percent) with the previous peak, reached during 2006.  The national index is still down 15 percent from its peak, which it also reached during 2006.

The HPI for the United States rose 7.7 percent from the fourth quarter of 2012 to the fourth quarter of 2013, and is the seventh quarter in a row of year over year index increases.

The first graph shows the Colorado HPI compared to the US HPI since 2000. Since the peak period, the US HPI has fallen farther than the Colorado index. The Colorado index turned up significantly during the second quarter of 2012, has moderated over the past quarter.

In the second graph is shown the year-over-year change in the HPI for both Colorado and the US. This more fully shows to what degree the HPI has fallen in recent years for both Colorado and the US. The national HPI has fallen farther -or increased less- than the Colorado HPI in every quarter since the second quarter of 2007. The home price index in Colorado has been increasing longer than the US as a whole, although Colorado showed less growth than the nation in the index from 2001-2007.

Notably, the Colorado HPI growth rate fell below that of the nation during the fourth quarter of 2013. This followed seven quarters of the Colorado growth rate significantly outpacing the national rate. Although Colorado economic indicators repeatedly showed Colorado outpacing the nation during 2012, we have seen several economic indicators (such as the Coincident Index) suggesting that Colorado's growth has moderated and as of 2012 was similar to national growth rates, or slightly below.

The index values presented and analyzed in this article are not seasonally adjusted.

Note: During the second quarter of 2011, the Federal Housing and Finance Agency released, for the first time, its Expanded-Data House Price Index. The new index is "Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick[.]"

In other words, the data source is much more broad than the old index which relied only on GSE information.

However, at the metro-area level, we'll still need to rely on the older GSE-data index until FHFA expands its new index into the metro areas.

FHFA: Metro Denver, Boulder, and Ft. Collins-Loveland Show Biggest Home Price Gains

The House Price Index (HPI) rose from the fourth quarter of 2012 to the same period of 2013 in every Colorado metro area except Pueblo.  Metro Denver, Ft. Collins-Loveland, and Boulder all reported the highest rate of increases in the home price index reported since 2001.  Greeley's growth rate was near a twelve year high. Outside these areas, home price growth was more subdued.

The fourth-quarter 2013 HPI data, released last month  by the Federal Housing Finance Agency for hundreds of metropolitan areas nationwide, showed year-over-year gains of more than five percent in all metros except Grand Junction and Pueblo, showing home prices well outpacing the US consumer price index.  The fourth quarter of 2013 marks the eighth quarter in a row in which the home price index rose year over year in metro Denver, Greeley, Boulder, and the Ft. Collins-Loveland area.

Year over year, the 1-year changes in each metro area were:
Boulder +9.3%
Colo Springs +3.1%
Denver-Aurora +10.9%
Fort Coll-Loveland +8.4%
Grand Junction +5.7%
Greeley +7.3%
Pueblo -0.1%

The first graph shows the year-over-year change in each region for each quarter. For the sake of visual clarity, the graph only shows data back only to 2007.

Over the past two years, growth in the home price index have become increasingly common, with southern and western Colorado lagging other areas. For metro areas overall, there is now a trend of growth in the home price index, however, with Pueblo and Grand Junction recently joining the other metros in reporting price gains.

The second graph shows the actual HPI values for each quarter going back to 2000. In general, the HPI began to plateau during 2007 and was declining in most areas by 2008. A big exception in the Grand Junction area which continued to increase rapidly well into 2008.

Since the peak period of the first quarter of 2007, the HPI has fallen in all regions. The following shows the change in the HPI compared to the peak period, as of the second quarter of 2013.

Boulder +8.2%
Colo Springs -6.8%
Denver-Aurora +7.6%
Fort Coll-Loveland +7.2%
Grand Junction -20.1%
Greeley -6.8%
Pueblo -11.6%

This latest report overall shows a continuation of earlier trends shows in this report. The most rapidly recovering markets are those markets with the strongest job growth: Metro Denver and Northern Colorado.
Pueblo, and Grand Junction are facing some of the highest unemployment rates in Colorado, and not surprisingly show some of the weakest growth in the home price index.

See here for other home price indices.

The index values presented and analyzed in this article are not seasonally adjusted. The data in this article is taken from the FHFA "all-transactions" data. The index is based on home price data obtained through the GSEs such as Fannie Mae and Freddie Mac

Thursday, March 13, 2014

Presentation materials from today's multifamily conference

Below is my presentation from today's Colorado Real Estate Journal Multifamily Conference and Expo:

Tuesday, March 11, 2014

Apartment rents climb in Greeley area, statewide as vacancy rates hold steady

 Rents in Colorado rose statewide during the fourth quarter of 2013, with the statewide average rent hitting a new fourth-quarter high of $992. According to a report released today by the Colorado Division of Housing, the average rent during the fourth quarter was up 5.2 percent from last year’s fourth-quarter average rent of $944, and it was down from this year’s third quarter rent of $1,000.

Rent growth was not uniform statewide. While average rents fell in Pueblo and Grand Junction, the Greeley area reported a record-large increase of 9.2 percent, or 64 dollars, in the average rent from the fourth quarter of 2012 to the fourth quarter of 2013. Average rents also rose in Loveland and Colorado Springs, while the average rent in Ft. Collins fell slightly following numerous quarters of substantial increases in rents.

“Where there’s been some new construction, such as metro Denver and Colorado Springs, rent growth has moderated a little, but rent is still clearly growing for now,” said Ryan McMaken an economist with the Colorado Division of Housing. “In Greeley, where there’s been little new construction in recent years, we’re looking at the largest annual increase in rents we’ve seen in more than a decade.”

Average rents in all metropolitan areas measured for the fourth quarter of 2013 were Colorado Springs; $799, Ft. Collins/Loveland, $995; Grand Junction, $561; Greeley, $756; Pueblo, $594. The average rent in metro Denver, measured last month in a separate survey, was $1041. 

The vacancy rate in Colorado apartments during the fourth quarter of 2013 rose across the state with the statewide composite vacancy rate rising year over year to 5.4 percent from 2012’s fourth-quarter vacancy rate of 5.2 percent. The fourth quarter’s rate was also up from 2013’s third-quarter rate of 4.5 percent.

Vacancy rates varied considerably in different metros of the state, however, with the Ft. Collins –Loveland area’s vacancy rate dropping to a ten-year low of 2.1 percent while Greeley’s vacancy rate increased to a two-year high of 6.3 percent. Vacancy rates in Grand Junction and Pueblo both remained above 6.5 percent due to flat job markets.

“After three quarters of solid rent growth, turnover has led to some higher vacancy rates in Greeley, but for the most part, vacancy rates remain low and more or less where they were about a year ago and they’re near ten-year lows in many cases.” McMaken said.

Vacancy rates in all metropolitan areas measured for the fourth quarter of 2013 were Colorado Springs; 7.1 percent, Ft. Collins/Loveland, 2.1 percent; Grand Junction, 6.7 percent; Greeley, 6.3 percent; Pueblo, 8.3 percent. The vacancy rate in metro Denver, measured last month in a separate survey, was 5.2 percent. 

A vacancy rate of 5 percent or below suggests a tight market. The statewide composite vacancy rate and average rent includes metro Denver. 

Friday, March 7, 2014

Greeley employment shows growing strength over past two years

According to the establishment survey of employment, total payroll employment in the Greeley area has shown significant growth over the past two years.

Year-over-year growth in payroll employment in the Greeley area during December 2013 was near the highest levels we've seen in the past decade. According the survey, more than 3,400 jobs were added in the Greeley area from December 2012 to December 2013. November 2013 showed an increase of 3,600 jobs, year over year. The first graph shows that the December total growth was similar to some of the biggest growth months during the past decade. Numbers are in 1,000s: 

The second graph shows total payroll employment by month. In this graph we can see that Greeley's December total was well above its old peak reached during September 2008, and was the highest total reached in any December ever. We also see that 2012 showed substantial growth over 2011, and that 2013 then added to 2012's gains. During 2010 and 2011, employment stalled in the region, but has accelerated since 2012. 

Establishment Survey: Employment growth slows, but remains positive

Total non-farm employment in Colorado, according to the establishment survey, his  a new all-time high during December 2013. At 2.4 million payroll jobs, employment is now slightly above the old 2008 peak reached at the end of the last expansion. The fact that the establishment survey shows a new high contrasts with the household survey that shows that employment has not yet reached the old peak. This discrepancy can be explained by the methods used for the two surveys. The establishment survey indicates total jobs, while the household survey shows total employed persons. A single person who works  two jobs will show up as a single employed person in the household survey, but show up as two payroll jobs in the establishment survey.

The first graph shows total payroll employment for each month. We see that in December, the total was both the highest December total ever reached, and also that the total was above the old June 2008 peak. In general, the second half of 2013 showed numerous new peaks in employment.

The second graph shows year-over-year gains in payroll employment. We see that overall growth has been similar to what was seen during the expansion of 2003-2008. In terms of growth, it appears that late 2012 and early 2013 saw the peak in employment growth with around 60,000 jobs gained, year over year during that period. Since September 2013, growth has fallen below 50,000 jobs each month, and December's growth was at the lowest level since April 2012. In December 2013, there were 43,000 more payroll jobs in Colorado than in December 2012. Back in February 2013, more than 66,000 jobs were added, year over year. 

Housing News Digest, March 7

Cover story: Will metro Denver's apartment boom bring rents down? Metro Denver in 2014 is on track to set a record for the most new apartment units in a year. The question is: Will it be enough to bring down record-high rents? Developers furiously building new multifamily projects across the metro area expect to deliver 10,000 units by year’s end, with more than half of the new units opening in downtown Denver, according to ARA Colorado (formerly Apartment Realty Advisors).

  Colorado Springs-area home construction declines again in February The recent slowdown in local homebuilding continued last month, as permits issued for the construction of single-family homes tumbled by nearly one-fourth when compared with a year earlier, according to a Pikes Peak Regional Building Department report released Monday.

  Colorado construction defects bill is on its way, but details remain unknown A bill seeking to jump-start the Denver area’s promising condominium construction sector will be introduced this session, but its sponsor said he remains unsure what types of legal reform will be a part of it.

  Colorado in a building boom despite lagging commercial starts Residential and public-works construction projects are leading a Colorado building boom, with the value of starts nearly doubling from 2009 to $14.2 billion in 2013, according to McGraw Hill Construction. Commercial construction continues to lag, however. The "nonresidential building sector is showing growth, but its pace of expansion so far has been modest, relative to the other two sectors," McGraw Hill chief economist Robert Murray said in an interview. "I think it is a similar picture across the country in that this has been a very slow-to-get-going recovery for construction."

  Working-class families look for housing affordability in surrounding towns Fort Collins’ housing market is squeezing out its working class. Retail and service workers, young professionals and others whose wages fall below Larimer County’s median household income of $75,800 are choosing to leave the Choice City in search of affordable housing. Chris Smith grew up in Fort Collins and has considered this home for most of his 46 years. But he and his wife just closed on a house in Severance.

  Homeowners left paying on damaged homes WELD COUNTY - For homeowner's affected by September's floods, the past few months have been anything but easy. Heather owns a home in Weld County; she asked that we not use her last name. "It has been a nightmare," she said. Her house sits on a property that had a low to moderate risk of flooding-- a risk that turned into a certainty six months ago

Thursday, March 6, 2014

Zillow: Home values up in all Colorado metros in January 2014

According to to most recent Zillow Home Values report, home values as measured by the Zillow Home Value Index,were up from January 2013 to January 2014 in all Colorado metro areas including Denver, Colorado Springs, Ft. Collins, Greeley, Grand Junction, Boulder and Pueblo metros.

Home values in the United States were up in January, increasing 6.3 percent from January 2013 to January 2014, rising to $169,600.

The year-over-year changes for Colorado metros were:

Change from January 2013 to January 2014 (by %):
Colorado statewide: +7.0
Boulder +8.4
Colo Springs +5.6
Denver metro +8.0
Ft. Collins +7.2
Grand Junct +3.2
Greeley +9.6
Pueblo +4.7

Note in teh first graph that Pueblo over the past year has begun to get caught up with the other metros in terms of year-over-year index increases. Grand Junction, meanwhile, appears to be falling behind the other metros more and more. GJ's January YOY increase was the smallest reported since early 2013, and GJ's YOY increase has been the smallest among the metros for the past three months. Nonetheless, all areas did report YOY increases during January, and all areas have reported increases for the past ten months. Greeley, driven by an improving job market, partially due to oil development showed the most growth in January with Ft Collins-Loveland and metro Denver close behind. 

As can be seen in the second graph, in recent years home values have shown the most stability and/or growth in Boulder, Fort Collins and in Denver metro, and those three metros also have the highest values. Prices in Denver metro, Ft Collins, Greeley and Boulder are all now back above peak levels from before the financial crisis.

The Zillow home values in January 2013 for each metro area are (in $s):

Colorado 233,200
Boulder 350,900
Colo Springs 198,800
Denver metro 243,900
Ft. Collins 245,500
Grand Junct. 174,000
Greeley 187,800
Pueblo 108,200

Not surprisingly, Boulder has the highest home value level and Pueblo has the lowest. The largest decline in home values in recent years is seen in the Grand Junction area where home values have declined from about 220,000 to 174,000 since 2007. Greeley prices, on the other hand, have recently accelerated as new growth driven by oil has driven up demand for real estate in the region.

See the home price archive for comparisons with other indices.

Zillow home valuations, known as the median "Zestimate valuation" is just one of many indices we consult, and it tends to show some of the largest growth rates. Indeed, the Zillow growth rates tend to be above those of the FHFA and Case-Shiller indices. It is helpful as a means of comparing different metro areas.

Slideshow: Colorado Springs Apartment Vacancies and Rents

The Division of Housing released its Colorado Springs vacancy and rent survey for the fourth quarter of 2013.

We saw some softening in the multifamily market in Colorado Springs as a result of new construction in both multifamily and single-family houses (since single-family houses are a substitute for multifamily units). It is also likely a factor that total employment, according to the household survey, was down in Colorado Springs in December.

The first graph shows the metro-wide vacancy rate for Colorado Springs. As is often the case due to seasonality, the vacancy rate slightly spiked during the fourth quarter. Note that this has happened for the past four quarters:

If we divide out the various regions of the Colorado Springs area, it's clear that in general, vacancy rates are way down from where they were in 2009, with the largest drops coming in the Southeast and Security-Widefield/Fountain regions. 

The vacancy rate headed up to 7.7 percent in the Far Northeast, and this is not surprising since much of the new multifamily construction is in that region. In fact, if we include the vacancy units in new lease-ups, the vacancy rate in the region hit 13 percent in the fourth quarter. But of course as those new units fill, the vacancy rate will come back down. 

The areas with the highest vacancy are the Far Northeast and the Southeast. Interestingly, these are the two areas where rents have been pushed upward the most over the past 18 months. The average rent increased 3.4 percent in the Far Northeast over 18 months, and the Southeast increased 13 percent during the same period. We often find that vacancy rate head upward after a period of strong rent growth as turnover increases in response to rent increases. Most regions reported vacancy rates near 5 percent for the fourth quarter.

The next graph shows the average rent for the Colorado Springs area. We see that the average rent fell from the 3rd quarter to the 4th quarter, which is what we generally expect to see in the fourth quarter due to seasonal issues. Year over year, the average rent was still up, however, although barely. It was up 1 percent, which is one of the smallest rates of increase in more than two years. Nonetheless, the overall trend continues to be upward.

The final graph shows the average rent for each market area. Here we see those big rent increases over 18 months mentioned above. Note how the rent line and the orange line both show substantial growth in recent quarters. The overall trend us upward in the other markets as well. Note that the the average rent in the Security/Widefield/Fountain area (the purple line), however, is actually below where it was a decade ago. The rent in that area has gone nowhere in recent years, and if adjusted for inflation, it's even down over the past decade. The central region, meanwhile, has taken off since 2009. 

Friday, February 28, 2014

Request for Bids: Metro Denver "Single-Family" Vacancy and Rent Survey

Closes March 5, 2014 

You must bid through the system. Look under Department of Local Affairs. 


Vendors not registered in the Colorado BIDS systems will not be able to access the attached files or be able to submit a response for consideration.

The Division of Housing (DOH) is a statewide housing agency which operates within the Colorado Department of Local Affairs.  DOH is seeking surveys of metro Denver rents and vacancies in single family homes, duplexes, triplexes, fourplexes, townhomes, and condos. The data sets from these surveys will assist the DOH staff and the State Housing Board members in making funding decisions of affordable housing projects, to evaluate success and to identify the most at-need communities. 

All questions must be via email attn: no later than the 3rd of March at 2pm. 2: Respondents to this solicitation shall ensure ALL emailed responses arrive no later than 2pm on March 5th MT. Any submissions received after this date will not be considered for award. 3: If modifications are made to the solicitation, it is the sole responsibility of the respondent to monitor the BIDS site and make changes to their submission accordingly. Failure to retrieve such modifications (if any) and to include in responses, may result in the disqualification of the response. 4: All submission requirements are noted in the attached specifications and bidders are expected to evidence ability to meet the Scope of the Work described. 5: Questions submitted and DOLA responses will be posted as a modification on BIDS prior to the submission deadline

Housing News Digest, February 28

NoCo foreclosure rates down 42 percent Northern Colorado experienced a 42 percent decrease in foreclosures from Jan. 2013 to Jan. 2014 compared year over year. Data released today by the Colorado Division of Housing shows a statewide decrease year-over-year with foreclosure filings down by 34.3 percent from Jan. 2013 to Jan. 2014, and foreclosure sales down by 37.1 percent during the same time period.

Average rent continues to rise in Springses  Average apartment rent rose in the Colorado Springs metro for the 16th consecutive quarter (year over year) at the close of 2013, according to a report released Friday by the Colorado Division of Housing and the Apartment Association of Southern Colorado. The report indicated that the average rent for Springs residents rose $9 (or 1 percent) to $799 compared to the same quarter of 2012. Although the year-over-year rate has increased for 16 straight quarters, the report specified that average rent is down from $830 during the third quarter of 2013.

  Front Range foreclosure filings jump 51% in January Foreclosure filings in 12 Front Range counties jumped 51 percent in January from a record low number in November, the Colorado Division of Housing reported Friday. "We can blame a lot of it on seasonality," division of housing economist Ryan McMaken said on Friday.

  Colorado Sprints apartment rise in fourth quarter, although not as dramatically as in the past Apartment rents continued to rise in the Colorado Springs area late last year, although not quite as fast as they have of late, according to a Colorado Division of Housing report released Friday. Rents averaged $799.67 a month in the fourth quarter of 2013, a nearly $9 or 1.1 percent increase over the same period a year earlier, the report showed.

  Institutional investors buying homes in Denver at increasing rate Institutional investors — non-lender buyers who have purchased 10 or more homes over the past 12 months — have hit the Denver real estate market in a big way during the past year, according to RealtyTrac. In a report released Thursday, RealtyTrac said institutional investor activity in metro Denver was 20.1 percent higher in January than a year ago. By contrast, institutional investor purchases nationally reached a 22-month low in January.

Colorado foreclosures increase in January from November’s lows

Foreclosure filings were down 34.3 percent in Colorado metro counties during January 2014, falling to the lowest level recorded in any January since the Division of Housing began collecting monthly totals in 2007.  According to a report released Friday by the Colorado Division of Housing, foreclosure auction sales in Colorado’s metropolitan counties were down 37.1 percent in January 2014 compared to January of last year, dropping from 930 to 585.  Over the same period, foreclosure filings dropped from 1,456 to 957. 

While down year over year, foreclosure filings and sales have increased month over month for the past two months. Both filings and sales hit new lows during November 2013, but since then, filings are up 51 percent, and sales are up 45 percent.  

Foreclosure filings are the initial filing that begins the foreclosure process, and foreclosure auction sales totals are the total number of foreclosures that have been sold at auction at the end of the foreclosure process.

“It may be that foreclosure totals bottomed out for the time being during November, and will move back up over the next year,” said Ryan McMaken, an economist with the Colorado Division of Housing. “Even if 2014 has more foreclosures than 2013, we’ll still likely be looking at levels well below what we saw from 2006 to 2011.”

All counties surveyed except Mesa County showed decreases in foreclosure auction sales during January when compared to January of 2013. The counties with the largest decreases in foreclosure auction sales, year over year, were Broomfield County and Larimer County where auction sales decreased by 81.8 percent and 55.6 percent, respectively. Mesa County, reported an increase of 18 percent over the same period.

The county with the highest rate of foreclosure sales during Jannuary was Mesa County with a rate of 989 households per foreclosure sale. Pueblo County came in second with 1,225 households per foreclosure sale. The lowest rate was found in Broomfield County where there were 11,176 households per foreclosure sale.

The Division of Housing’s monthly foreclosure report surveys foreclosure activity in the twelve metropolitan counties of Colorado. The report is a supplement to the Division’s quarterly foreclosure report that includes all counties in Colorado. 

Colorado Springs apartment vacancies fall, but rent growth slows

During the fourth quarter this year, the average apartment rent in the Colorado Springs metro area rose, year over year, for the sixteenth quarter in a row. According to a report released Friday by the Colorado Division of Housing and the Apartment Association of Southern Colorado, the average rent in the Colorado Springs metro area rose to $799, up 1 percent from 2012’s fourth-quarter average rent of $790. The fourth quarter’s average rent was down, however, from 2013’s third quarter average rent of $830.

The average rent increased year over year in all regions of metropolitan Colorado Springs surveyed except the Southwest region. The largest increase in the average rent for any region was found in the Northeast where the average rent increased 5.4 percent from $721 during the fourth quarter of 2012 to $760 during the same period of 2013.  The Security/Widefield/Fountain region reported the second-largest increase in the average rent, with an increase of 4.6 percent from $598 during the fourth quarter of 2012 to $626 during the fourth quarter of 2013.

Average rents for all market areas during the fourth quarter of this year were: Northwest, $850; Northeast, $760; Far Northeast, $917, Southeast, $727; Security/Widefield/Fountain, $626; Southwest, $805; Central, $745.

“Demand for apartments softened during the fourth quarter as it usually does, but overall, 2013 saw some solid increases in average rents," said Ryan McMaken, an economist with the Colorado Division of Housing. "The rate of increase in rents during the fourth quarter was the smallest we've seen in a couple of years, though, reflecting the effects of new apartment construction and a flat employment situation." 

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 6.0 percent during the fourth quarter of 2013, falling from last year’s fourth-quarter rate of 7.1 percent. This year’s fourth quarter vacancy rate was up from the third quarter rate of 5.4 percent.

From the fourth quarter of 2012 to the fourth quarter of 2013, the vacancy rate fell in the Northeast, Southeast, and Central submarkets. During the same period, the vacancy rate rose in the Northwest, Far Northeast, and  the Secuirity/Widefield/Fountain region.  The vacancy rate was flat in the Southwest region. The region with the highest vacancy rate was the Far-Northeast region at 7.7 percent, and the region with the lowest vacancy rate was the Southwest region at 4.8 percent.

"New apartment unit construction does have an impact. If we include brand new projects that are leasing up in the region, the vacancy rate metro-wide is actually 7.1 percent, and it's 13 percent in the Far-Northeast where many new units are," McMaken said. "El Paso County was also the number one county for new single-family homes permitted in 2013, and new homes in the area do have an impact on apartment occupancy." 

Vacancy rates for all market areas during the fourth quarter were: Northwest, 5.1 percent; Northeast, 5.2 percent; Far Northeast, 7.7 percent, Southeast, 6.9 percent; Security/Widefield/Fountain, 5.3 percent; Southwest, 4.8 percent; Central, 5.6 percent.

Friday, February 21, 2014

Denver-Boulder-Greeley CPI up 2.7 percent in second half of 2013, driven by rent and fuel

During the second half of 2013, the consumer price index in the Denver-Boulder-Greeley area was up 2.8 percent compared to the second half of 2012. The first graph shows the year-over-year change in the Denver-Boulder-Greeley CPI going back to 2000. We can see that the CPI growth is well within the usual range over the past decade:

The second graph shows the growth from each period to the next. (The most recent period is the change from the first half of 2013 to the second half of 2013):

In this case, we also see a moderate change. From the first half of 2013 to the second half of 2013, the CPI rose 1.4 percent. 

Within the index's component, found here, we see that the categories showing the largest increases in prices were energy and housing, with rent up 7.3 percent (year over year) and fuels and utilities up 13.7 percent over the same period. Division of Housing data showed a 6.4 percent increase in the average rent from the 4th Q of 2012 to the 4th Q of 2013. 

Given that both are essential items, these increases can have a significant effect on household budgets. 

The Denver Post reported on this yesterday.