Friday, March 20, 2009

First quarter foreclosures are behind 2008 totals

See the press release.

Statement from the Colorado Division of Housing:

Foreclosures are set to end the first quarter down from the first quarter of last year.

We don't have complete month-by-month data for January and February of 2008, but we can extrapolate from this year's monthly data to make a guess about where foreclosures are headed in Colorado this year.

We looked at a sampling of Counties including Adams, Arapahoe, Boulder, Denver, El Paso, Jefferson, Mesa, Pueblo, and Weld Counties. These counties alone account for almost 90 percent of foreclosure activity in Colorado.

We found that during January and February of this year, there was a total of 2,577 completed foreclosures. There were 5,429 completed foreclosures for the entire first quarter of 2008. In order to keep pace with 2008 foreclosures, the January-February total should be at 66.66 percent (or 2/3) of the first quarter total from last year. What we find, however, is that the January-February total for 2009 is at only 47 percent (or approx 1/2) of the first quarter total from last year.

So, unless there is a substantial increase in the number of completed foreclosures during the month of March, the 1st quarter 2009 total will be smaller than the 1st quarter 2008 totals. This will mean a second year-over-year decrease for the 1st quarter since the current peak year of 2007.

Nevertheless, it is likely that completed foreclosures will increase from February to March. From January to February, completed foreclosures increased 43 percent from 1,062 to 1,515. If completed foreclosures increase by only, say, 25 percent from February to March, totals will reach 4,577. Although, even this would be a 15 percent decrease from the first quarter of 2008. Completed foreclosures would need to grow more than 50 percent from February to March to top the 1st quarter 2008 number.

Unemployment continues to be a concern, and it may be a factor behind the 43 percent increase from January to February. If unemployment continues to grow, we will likely see continued increases in foreclosure activity as the year goes on.