Thursday, August 30, 2012

Free Lead Testing Services

To recognize National Lead Poisoning Prevention
Week, Tri-County Health Department is offering free
lead testing of personal and household items. Click here for more.

Bring your:
• Toys
• Kids’ Jewelry
• Plates
• Ceramics
• Painted
• Spices
• Canvas bags
• Lipstick
• Christmas
  Tree Lights

October 17, 2012 1:30-3:30 pm
(during the Immunization Clinic)

Tri-County Health Department
Castle Rock Office
4400 Castleton Court
Castle Rock, CO 80109

October 24, 2012 1:30-3:30 pm
(during the Immunization Clinic)

Tri-County Health Department
Northglenn Office
10190 Bannock Street
Northglenn, CO 80260
Click here for more.

Click here for full information. 

Case-Shiller: Denver metro index up to highest level since 2008

Case-Shiller released its home price index for June 2012 on Tuesday. The home price index for the Denver area rose 2.0 percent percent from May to June, and rose 4.0 percent, year over year, from June 2011 to June 2012.  The year-over-year increase in June was the sixth year-over-year increase in a row for Denver, and was the largest increase in 26 months . The first graph shows the index values since 2001. The index value is at the highest value seen since August 2008.

According to S&P's press release, home prices nationwide continued to show some signs of growth:
“Home prices gained in the second quarter,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “In this month’s report all three composites and all 20 cities improved both in June and through the entire second quarter of 2012. All 20 cities and both monthly Composites rose for the second consecutive month. It would have been a third consecutive month had we not seen home prices fall in Detroit back in April.
In year-over-year comparisons for June, six out of 20 cities showed year-over-year declines in the home price index.  Atlanta showed the largest drop by far, with a decline of 12.1 percent, while the index in New York fell 2.1 percent. Denver was among the fourteen cities reporting increases, and had the fourth-largest increase of the twenty cities. Only Miami, Phoenix, and Minneapolis reported larger year-over-year increases in the home price index than Denver.

The second chart shows trends in the Case-Shiller index for the Denver area and for the 20-city composite index. It is clear that Denver did not experience the kind of price bubble that occurred in many other metropolitan areas, and consequently, the index has not fallen nearly as far in Denver compared to the larger composite.

The 20-city composite is down 31 percent since it peaked in July 2006, but the Denver index is down only 6.5 percent from its August 2006 peak.

The third chart compares year-over-year changes in the Denver area index and in the 20-city composite. Overall, the index has been less volatile in Denver than has been the case for the 20-city composite. The year-over-year change in the 20-city composite during June turned positive for the first time in 21 months with an increase of 0.5 percent while Denver reported an increase of 4.0 percent.

In short: Denver metro home prices have shown a much stronger growth trend than the 20-city composite.

The last chart provides a closer look at year-over-year changes in the Denver index. The index went negative as the economy began to slow in 2007 and remained negative until this year with the exception of the period in which the homebuyer tax credit pushed up prices temporarily. Recent home price growth is accelerating as inventory declines, household formation continues, and rental housing continues to become more expensive.

KC Fed Manufacturing Survey: "Manufacturing activity improved moderately"

The FC Fed released today it's manufacturing survey of the Tenth Federal Reserve District, which includes Colorado. 
The Federal Reserve Bank of Kansas City released the August Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity improved moderately, and producers' optimism continued to edge higher.

According to the Report:

The month-over-month composite index was 8 in August, up from 5 in July and 3 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing growth increased at most durable- and nondurable goods-producing plants, particularly for chemical, metal, and transportation products. Most other month-overmonth indexes also increased in August. The production index climbed from 2 to 7, and the shipments, new orders, and order backlog indexes all moved back into positive territory. The new orders for export index inched higher but remained below zero, while the employment index dipped slightly from 6 to 2. Both inventory indexes increased for the second straight month.

Kansas City Fed: District expanded at "moderate pace"

The Kansas City Fed released its Beige Book yesterday, and noted that growth continues in the Tenth Federal Reserve District, which includes Colorado.

Real estate activity was one of the more active sectors. The Agriculture sector, for example, has suffered due to drought, and wages remain only "stable."

From the report:

Real Estate and Construction
Residential and commercial real estate activity continued to improve in July and early August, and construction activity strengthened. Residential home sales and prices rose, and home inventories fell. Contacts reported multiple offers on homes and expected continued housing market improvements in coming months. Homes under $300,000 sold particularly well, while homes priced over $500,000 and condos were slow to sell in some markets. Several contacts reported that a large inventory of homes in foreclosure has been held back and could put downward pressure on prices when the homes come onto the market. Builders reported an increase in housing starts and a rise in new home prices as well as improvement in the traffic of potential buyers. Land prices and the cost of building materials rose during the survey period as demand improved. Commercial real estate conditions also improved. Construction and sales of commercial real estate properties rose, real estate prices and rents increased, and vacancy rates continued to fall. Several commercial real estate contacts expected uncertainty surrounding the presidential election to slow activity until late in the year. Developers reported that access to credit remained unchanged.
In the recent survey period, bankers generally reported slightly stronger loan demand, improving loan quality, and little change in deposits. Overall loan demand improved slightly as most respondents reported stable loan demand for commercial and industrial loans, commercial real estate loans, and consumer installment loans, while demand for residential real estate loans improved. Credit standards remained largely unchanged in all major loan categories, and the majority of respondents reported stable deposits. The majority of bankers reported improved loan quality compared to a year ago, and nearly all banks expected loan quality over the next six months to remain steady or improve.

Second quarter GDP growth revised down

From the BEA:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.7 percent in the second quarter of 2012 (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 2.0 percent.  
A 1.7 percent growth rate is below the 2.5 percent (or so) rate necessary for real employment growth.

Wednesday, August 29, 2012

Housing News Digest, August 29

Douglas County to appeal Sterling Ranch ruling The Douglas County Board of Commissioners has voted unanimously to appeal an Aug. 22 ruling by a District Court judge overturning the board’s 2011 zoning change that paved the way for the sprawling Sterling Ranch development.

 City of Boulder may annex more land if utility formed Boulder may annex some unincorporated neighborhoods connected to its electrical system if the city decides to create a municipal energy utility, the Daily Camera reports.

Commercial construction activity jumps across Denver area New contracts for non-residential construction in the Denver-Aurora area jumped 52 percent in July compared to July 2011, McGraw-Hill Construction reported Tuesday.

 Housing Solutions Offering Home Repairs Program Housing Solutions for the Southwest is pleased to announce that the Colorado Department of Local Affairs, Division of Housing approved a request for additional funding this week for Housing Solutions to expand our low-interest loan program for homeowners in Southwest Colorado. Housing Solutions has been giving loans for home repairs in the community for 29 years. In the next grant cycle, Housing Solutions will provide loans to rehabilitate a significantly larger number of families, up to twenty-five homes. Low to moderate income individuals or families can apply. We are accepting applications immediately for the program.

 As housing recovers, apartment boom may end Rents are sky-high in most of the largest U.S. markets, and vacancies are down and still falling. Multifamily housing starts were up 30 percent in July from a year ago, according to the U.S. Commerce Department, and multifamily permits were up more than 47 percent. Supply increases are a potential risk to the multifamily sector, and high prices have caused investors to sour on the sector of late. But some say multifamily isn’t exactly heading into the woods. The fundamentals are still strong. (Read more: A tale of two housing markets: single and multi family.)

Tuesday, August 28, 2012

Zillow: Median asking rents down 6.5 percent in Colorado

Zillow last week released its most recent estimates of home values nationwide and in various metros, including several of Colorado's metros. See here for the Zillow home value data.

Zillow also released "median asking rent" data for single-family homes and condos.

Zillow only has data going back to February 2010, and it shows very little growth in asking rents since then.

We only have data for metro Denver, but our own data here shows that rents for single-family houses and condos have been rather flat over the past two years as well. There have been increases, to be sure, but they have rarely outpaced inflation.

This is very different from apartment rents, of course which have been showing substantial growth in recent quarters in some areas.

 Zillow shows the following year-over-year changes in median asking rents:

Colorado: -6.5%
Boulder Metro - 14.6%
Colorado Springs Metro -12.5%
Denver Metro -8.4
Ft. Collins Metro -4.3%
GJ Metro -10%
Pueblo Metro -20%

The year-over-year change in the Division of Housing survey for single-family and condo rents was up 0.3 percent. That is, it was flat.

The big declines in the Zillow rents is curious given the rock-bottom vacancy rates in these properties of 1-3 percent in recent quarters.

We'll keep an eye on them as they amass more data.

Here's a graph of the available data:

Philly Fed: Colorado economic index lags nation, but is still growing

The Coincident Index for Colorado rose 0.16 percent from June 2012 to July 2012, which was nearly equal to the national index's increase of 0.17. July's index, which was released last week by the Philadelphia Federal Reserve Bank, is an index calculated from nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average).

The three-month change in the index, shown in the map here, was larger in Colorado than in 28 states.The 3-month change was 0.31 percent in Colorado and 0.57 percent for the nation. The U.S. is in the middle of the pack compared to other states.

According to the July 2012 report:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for July 2012. In the past month, the indexes increased in 22 states, decreased in 17, and remained stable in 11, for a one-month diffusion index of 10. Over the past three months, the indexes increased in 32 states, decreased in 14, and remained stable in four, for a three-month diffusion index of 36. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index rose 0.2 percent in July and 0.6 percent over the past three months.

The graph below compares the month-to-month change in both the Colorado Index and the US index. In three of the last four months, the growth rate in Colorado has lagged the nation overall.

The second graph shows year-over-year changes in the index, and an upward trend was evident through most of 2011. Colorado now shows signs of falling below national growth rates, however. Colorado has been below the national growth rate for the past four months.

Overall, this report suggests some slowing in Colorado economic activity in relation to the nation as a whole. Nevertheless, the overall trend is one of mild growth.According to this data at least, Colorado's slow recovery is not outpacing the nation, and is on about the same level as most other states.

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Housing News Digest, August 28

‘Transit-oriented’ apartments back on track An eight-acre site in northern Douglas County could soon be bustling with construction equipment now that a transit-oriented development is one step away from approval. The creation of the tentatively named County Line Apartments, a four-building, 267-unit apartment complex proposed near an RTD park-n-Ride and the County Line light-rail station, is yet another sign of the rebounding housing market.

Council moves to ban free market residential units in downtown core Aspen City Council voted to move forward with a policy that could effectively ban development of new free market residential units in downtown Aspen in a meeting on Monday. Council voted 3-2 in favor of giving direction to staff to draft an ordinance that includes the directive. Councilmen Derek Johnson and Adam Frisch voted in dissent.

 Fort Collins-area housing sales on the rebound Home sales in Fort Collins and Timnath increased significantly in the first half of the year, putting the area on pace to break a seven-year slide in sales. It was the fourth increase in the past four quarters. If the trend holds, the number of homes sold in the region are estimated to grow about 8 percent this year over last, according to the Everitt Real Estate Center at Colorado State University, which released its market survey Wednesday.

Wal-Mart's first neighborhood grocery set to open Wednesday in Springs Smaller stores are about to give Wal-Mart an even bigger presence in the Pikes Peak region. The world’s largest retailer will open its first neighborhood market store in the Colorado Springs area at 8 a.m. Wednesday in a remodeled King Soopers, northeast of Platte Avenue and Murray Boulevard in the Murray Square shopping center on the city’s east side.

Comcor Picks Up Colorado Springs Office Bldg Comcor Inc. acquired 1355 Kelly Johnson Blvd. in Colorado Springs, CO, from Air Academy FCU for $1.34 million or $67 per square foot. The 20,000-square-foot, Class B office building was built in 1979 and is in the Northeast submarket. There were no sales conditions; the property was on the market for more than two years and under contract for about four months.

Tuesday, August 21, 2012

Colorado unemployment rate continues to track with national rate

The Bureau of Labor Statistics today released employment information on all states for July 2012.The seasonally-adjusted unemployment rate for Colorado during July was 8.3 percent.

According to the BLS press release:
Seventeen states and the District of Columbia reported statistically significant unemployment rate decreases from July 2011, the largest of which occurred in Florida, Mississippi, and Nevada (-1.8 percentage points each). New York experienced the only statistically significant over-the-year increase in its unemployment rate (+0.9 percentage point).
Colorado was not one of the states that reported decreases in the unemployment rate, year over year. The seasonally-adjusted unemployment rate in Colorado was flat at 8.3 percent comparing July 2011 to  July 2012.

Colorado's unemployment ranking has worsened somewhat compared to other states. Last December, for example, Colorado had the 25th-best unemployment rate, but has since fallen to 31st-best. Broadly speaking, however, Colorado can still be said to be in the middle of the pack as far as the unemployment rate is concerned.

Both the US and Colorado had an unemployment rate of 8.3 percent during July. Both had an unemployment rate of 8.2 percent during June.

The graph shows a comparison between the two rates since 2006:

The unemployment rate in Colorado, seasonally adjusted, rose to 8.3 percent during July from June's rate of 8.2 percent.  The rate had been flat at 7.8 percent for January, February and March of this year.

See here for metro area unemployment info in Colorado.

Over time, if the unemployment rate moves above the national rate, that could affect worker perceptions of the job market in Colorado an impact demographic trends, however, the short term trend points toward Colorado as a relatively attractive market for the time being.

July 2012 home values up in all metros but Pueblo

According to to most recent Zillow Home Values report, home values as measured by Zillow were up from July 2011 to July 2012 in Denver, Colorado Springs, Ft. Collins, Grand Junction and Boulder metros. Prices were down in the Pueblo metro.

Home values in the United States were up in July, increasing 1.2 percent from July 2011 to July 2012. 

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

Change from July 2011 to July 2012 (in %):
Colorado statewide: +2.9
Boulder +2.6
Colo Springs +2.1
Denver metro +4.8
Ft. Collins +3.5
Grand Junct +2.5
Pueblo -6.2

As can be seen in the graph, in recent years home values have shown the most stability in Boulder, Fort Collins and in Denver metro, and those three metros also have the highest values.

The Zillow home values in July 2012 for each metro area are (in $s): 

Colorado 205,000
Boulder 309,700
Colo Springs 185,300
Denver metro 212,600
Ft. Collins 221,800
Grand Junct.162,300
Pueblo 99,700

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 160,000 since 2007. Price declines in other Colorado metros have been more mild as can be seen in the graph.

This report echoes other reports on home prices, such as Case-Shiller which continues to show accelerating home prices due to constricted supply and ongoing household formation.

Zillow home valuations, known as the median "Zestimate valuation" should be taken with a grain of salt, but in this case they do appear to be in line with other home price indices and trends.

July 2012 employment down in Pueblo and Colo. Springs, up in others metros

Total employment growth in Colorado in July continued to show slight growth statewide in the year-over-year comparisons. In July, total employment in Colorado was down 114,000 from the July 2008 peak. Employment trends in various regions of the state differ, however, so this article looks at which regions of the state have the highest unemployment rates, and which regions have recovered the most in their labor markets.

Regional employment trends can also provide us with some insights into local housing demand since, all things being equal, those areas with the most robust labor demand will also have the strongest demand for housing. This would be reflected in apartment vacancy rates and in median home price and home sales transactions, among other indicators.

The first graph compares unemployment rates in Colorado's metro areas.

The regional unemployment rates (not seasonally adjusted) for July 2012 are:
Colorado Springs, 9.8%
Denver-Aurora, 8.2%
Fort Collins-Loveland, 6.7%
Grand Junction, 9.3%
Greeley, 9.2%
Pueblo, 11.0%
Statewide, 8.3%

Since mid-2009, The Fort Collins-Loveland area has consistently shown one of the lowest unemployment rates while Grand Junction and Pueblo have generally shown the highest rates. during recent months,however, the unemployment rate in Grand Junction has fallen to the point where Greeley, Grand Junction, and Colorado Springs now all have similar unemployment rates above 9 percent. Colorado Springs now has the second-highest unemployment rate in the state at 9.8 percent.

Year over year, the unemployment rate increased in Colorado Springs and Pueblo and fell in all other metros. Total employment declined year over year in Colorado Springs and Pueblo.

To provide some additional context, we can look to see how far below total employment levels are below the most recent peak in employment in each region. The peak time differs in each region. For example, the labor market peaked in mid-2007 in the Colorado Springs area, but it did not peak until late 2008 in the Grand Junction area.

The following numbers reflect how far below the most recent peak are the July 2012 employment totals:

Colorado Springs MSA, 8.6%
Denver-Aurora MSA, 3.6%
Fort Collins-Loveland MSA, 3.4%
Grand Junction MSA, 8.8%
Greeley MSA 3.9%
Pueblo MSA, 1.7%
Statewide, 4.3%

All things being equal, the areas further below the peak have recovered the least from initial job losses.

By far, Grand Junction remains the furthest below peak levels, with the Colorado Springs area also dipping more than 8 percent below the peak. We see here also that the Ft. Collins-Loveland area has one of the strongest markets, with Greeley also moving toward peak levels.

(Note: If we include the Boulder-Longmont MSA, we find that the Boulder area has consistently been among the areas with the lowest unemployment rate. In July 2012, the rate in the Boulder-Longmont area was 6.5%.)

Housing News Digest, August 21

Carbondale affordable housing program to be scrutinized tonight CARBONDALE, Colorado — This town's affordable housing program is the topic for a work session of the Board of Trustees tonight, where officials will meet with the program's new managers and talk about a range of issues. Among the issues will be an update on the current inventory of deed-restricted units, as well as a look at what the town can expect from the Garfield County Housing Authority .

Student renters learn about community, being good neighbors Michelle Willett, of CU's Off-Campus Housing and Neighborhood Relations, gave students a run-down of the city ordinances that can rack up expensive fines for new residents who aren't in the know. Pike said she was not surprised by the information about noise violations but she did not know about the Party Registration program, which gives students a 20-minute window to tame down their party before the cops arrive.

  WALDO CANYON FIRE: Fire department releases home rebuilding guidelines New fire codes will likely require rebuilt homes in the Waldo Canyon fire burn area to use fire-resistant materials, while older homes that survived the blaze will be allowed to keep existing wooden siding and decks.

 Real estate experts discuss refinancing, short sales and more GLENWOOD SPRINGS, Colorado — Nearly half of the mortgages in Garfield County are classified as “underwater,” according to some analysts. But local real estate experts say there are several options for homeowners who find themselves unable to keep up with their house payments but owe more than the house could now sell for. From refinancing a home loan to modifying loan terms, area real estate agents, mortgage brokers and banks say they are open to helping people stay in their homes.

Apartments going up at Steel Ranch LOUISVILLE - Work is about to begin on the final two major residential developments in Louisville, including a $36 million luxury apartment complex. Confluence Cos. LLC plans to break ground by the end of August on a 228-unit luxury apartment complex in the Steel Ranch development. The complex will have seven buildings, and the first building is expected to be ready for tenants early next summer, said Tim Walsh Confluence's president. Confluence is branding the complex North Main at Steel Ranch. The project is at the northwest corner of Colorado Highway 42 and South Boulder Road.

Monday, August 20, 2012

July Colorado employment up slightly over July 2011

Colorado gained 11,200 jobs in July 2012 compared to July of 2011, and the non-seasonally-adjusted unemployment rate was flat year-over-year at 8.3 percent. According to the most recent employment data, collected through the Household Survey and released today by the Colorado Department of Labor and Employment and the BLS, total employment in July, not seasonally adjusted, rose to 2.52 million jobs year over year. The labor force also increased by 10,800 from July 2011 to July 2012.

In month-to-month comparisons, the (not-seasonally adjusted) unemployment rate fell from 8.4 percent during June 2011 to 8.3 percent during July. However, 14,300 jobs were lost month-over-month while 18,200 people left the work force over the same period.

From July 2011 to July 2012, total employment rose 0.4 percent while the labor force rose 0.4 percent. The total labor force in July included 2.74 million workers.

As can be seen in the second graph, total employment and total workforce size have fallen, month-over-month,  after a series of ups and downs in recent months. Year over year, both employment and the labor force grew. Since employment and the labor force grew at about the same rate, the unemployment rate remained flat. What we see overall is that both employment and labor force have been increasing in recent months, when compared year over year, although those increases remain small and often under 1 percent growth. 

The employment total is now 114,000 jobs below the peak levels experienced during July 2008 when there were 2.63 million employed workers. Compared to the labor force peak in July 2008, the labor force is now down by 22,000 workers.The jobs deficit has been cut almost in half since 2010, although the 114,000 below the peak does not include the jobs needed for all the new entrants into the workforce since 2008. Under normal conditions, the labor force would grow by 25,000 per year. This is a conservative estimate. So, in the four years since mid-2008, the labor force would have grown by an additional 100,000.  This means that to truly bring the unemployment rate down to 5-6%, the state needs to add 200,000 new jobs.  

In the third graph is shown the year-over-year comparisons, by percent, for total employment. June 2012 was the 19th month in a row showing a positive year-over-year change in total employment. The 18 months of increases followed 28 months in a row of negative job growth in year-over-year comparisons.

The fact that total employment fell from June to July may be significant. Total employment has grown from June to July every year for the past seven years - except this year. This, coupled with a small annual growth rate and global economic issues, may signal a continued moderation in job growth.

These numbers come from the Household Survey employment data, so the size of the workforce is dependent on the number of people stating that they are actively looking for work if not employed. Discouraged workers who have stopped looking for work are excluded. On the other hand, the Household Survey picks up on small business and start-up employment that may be missed by the Establishment Survey, the other commonly-used measure of employment.

Note: This analysis reflects newly revised data released in January. In most cases, total employment was revised upward for the months of 2011.

Colorado towns on the 'Best Places to Live' list

In addition to the state's recent 'awesome' ranking, also relevant to ongoing household formation issues is the inclusion of five Colorado cities on Money Magazine's list of Best Places to Live.

Rankings are from a list of 100 cities:

#16,  Castle Rock
#21, Highlands Ranch
#49, Centennial
#60, Boulder
#70, Ft. Collins

Thursday, August 16, 2012

Buildfax: Remodeling in U.S. West region down 9 percent in June

Buildfax released its latest numbers on remodeling activity in the nation and its regions today. According to the press release:

Data Release: August 16, 2012

Residential remodels authorized by building permits in the United States in June were at a seasonally-adjusted annual rate of 2,725,000. This is 6 percent below the revised May rate of 2,896,000 and is 1 percent below the June 2011 estimate of 2,753,000.

Regional Residential Remodeling

Seasonally-adjusted annual rates of remodeling across the country in June 2012 are estimated as follows: Northeast, 692,000 (down 11% from May and up 7% from June 2011); South, 1,071,000 (down 5% from May and up 1% from June 2011); Midwest, 487,000 (down 9% from May and down 9% from June 2011); West, 724,000 (down 8% from May and down 9% from June 2011).

Single-family permits up in all metro counties in 2012

Of the 5,083 new single-family permits issued during the first six months of 2012, almost half of them (47 percent) were issued in El Paso, Douglas and Larimer counties alone. According to new single-family June permit data by county, released by the Census Bureau, the counties with the largest numbers of single-family permits issued during the first six months of 2012 were El Paso, Douglas, and Larimer, with El Paso reporting more single-family permits during the period than any other county.

See here for recent posts about building permits.

New single-family permits during January-June 2012
El Paso 1,108
Douglas 739
Larimer  522

Arapahoe 423
Boulder 117
Broomfield 42
Chaffee 59
Elbert 22
Jefferson 379
Mesa 179
Park 32
Pueblo 95
Summit 15
Weld  470
Teller 21

(Note: All permits discussed in this article are single-family permits.)

However, when permit totals are adjusted to the number of existing housing units in each county, the counties with the larges amounts of permit activity were Douglas, Weld and Chaffee counties.These three counties have reported the highest permitting rate for several months.

New single-family permits per household (x1000):

Chaffee 8.3
Douglas 7.3
Weld 5.2
El Paso 4.9
Park 4.7
Larimer 4.5
Mesa 3.0
Elbert 2.7
Teller 2.3
Adams 2.1
Broomfield 2.0
Denver 1.9
Arapahoe 1.8
Jefferson 1.7
Routt 1.6
Pueblo 1.5
Summit 1.2
Boulder 0.9

During the first four months of 2012, the metro counties with few new single-family permits relative to the size of the existing stock are Pueblo, Jefferson, Arapahoe, and Boulder counties.

It is also helpful to see which counties have shown the largest increases and decreases in permit activity. In the list below, we see that comparing January-June 2011 to January-June 2012, several metro counties reported year-over-year increases of 50 percent or more. No metro counties reported decreases.

Largest increases among metro counties:
Broomfield 147 percent
Douglas 82 percent
Jefferson 69 percent
Weld 57 percent
Larimer 53 percent

Smallest increases among metro counties:
Adams 19 percent
Mesa 30 percent
Pueblo 35 percent

Arapahoe 40 percent
Boulder 46 percent
Denver 46 percent
El Paso 47 percent

Multifamily starts hit 6-year high in West region of US

Housing starts in the West Census region of the US, which includes Colorado, were up 51.9 percent from July 2011 to July 2012, counting both single-family and multi-family units. According to new housing construction and housing starts data released today by the US Census Bureau, multifamily housing starts in the U.S. West region hit a six-year high and there were approximately 19,300 housing units of all types started in the West during July 2012. Of the new units started, 11,500 were single-family structures and 7,800 were structures containing more than one housing unit.

Nationally, housing starts rose 24.4 percent during the same period, with total housing starts rising to a total of 71,700.

Total housing starts remain well below peak levels both nationally and in the West. July 2012 housing starts in the West were 64 percent below the peak reached during May 2004. Nationally, July 2012 was 63 percent below peak levels. The national peak in housing starts was reached during May 2005.

Multifamily starts have rebounded more than single-family starts. In the West, single-family starts are 75 percent below peak levels while multifamily starts are only 22 percent below peak levels. The single-family housing starts for the West region during July were at the highest point reached since January 2008.

The West census region includes states on the west coast and within the Rocky Mountain region.

The first graph shows that starts totals are beginning to come out of the very-low level trend that has been in place since 2009. Multifamily totals are up near pre-recession peaks.

The second graph shows month-by-month comparisons in housing starts for each year in the West. July's housing starts total was down 4 percent from June but were at a 5-year high. That is, July 2012 was the biggest July for total starts since 2007.

July 2012's multifamily starts were at the highest July total seen in six years There were 7,800 multifamily starts during July 2012 which is the highest July total since July 2006.

Single-family starts continue to show signs of very slow improvement while multifamily starts are accelerating. This mirrors recent permit activity in Colorado where new multifamily permits are up almost 200 percent so far this year compared to last year.

Vacancies in rental houses at historic lows, but rent growth remains modest

Vacancies in for-rent condos, single-family homes, and other small properties across metro Denver fell during the second quarter, dropping year over year to 2.0 percent. The vacancy rate rose slightly from the first quarter of this year to the second quarter, but vacancies have remained consistently scarce since the end of 2009.  According to a report released Thursday by the Colorado Division of Housing, the metro-wide vacancy rate during the second quarter of 2012 was down from 2011’s second-quarter rate of 2.6 percent while it was up from 2012’s first-quarter rate of 1.6 percent.

At the county level, the lowest vacancy rates were found in Denver County and in Douglas County where the vacancy rates were 1.4 percent and 1.8 percent, respectively.  

Vacancy rates for all counties surveyed were: Adams, 2.2 percent; Arapahoe, 1.9 percent; Boulder/Broomfield, 2.6 percent, Denver, 1.4 percent; Douglas, 1.8 percent; and Jefferson, 2.5 percent.

“All county areas are now showing vacancy rates below three percent as renters have expanded their searches to include the less-popular areas,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “There was more variation in the past, but even those areas that had historically higher vacancies have now filled in.”

In spite of historically low vacancy rates, growth in the average rent for rental houses, townhomes and other small properties have been modest during recent quarters. The average rent in metro Denver for single-family and similar properties fell to $1,060 during 2012’s second quarter, falling 0.3 percent from 2011’s second-quarter average rent of $1,063. The second quarter’s average rent this year was up from the first quarter’s average rent of $1,056.  Average rents are not adjusted for inflation.

The average rent rose, year over year, in all county areas except in Adams County, Arapahoe County and Denver County. In Adams County, the average rent fell 6.9 percent year over year and it fell 6.5 percent year over year in Arapahoe County. The average rent was flat in Denver County at $1,007 over the same period.  Growth in the average rent was strongest in Jefferson County where it grew 3.0 percent from 2011’s second quarter to 2012’s second quarter.

“Although vacancies were very low during the second quarter, we find that there is still a reluctance to increase rents significantly in some areas,” McMaken said.  “High turnover, which can increase if rents are pushed too aggressively, is more costly and time consuming for a small owner of one or two single-family units than it is for a large apartment management firm.”

On a per-square-foot basis, however, the average rent rose to 86 cents during the second quarter of 2012 to tie the highest per-square-foot rent ever recorded by the survey.

Average rents for all counties were:  Adams, $1,053; Arapahoe, $1,007; Boulder/Broomfield, $1,570; Denver, $1,007; Douglas, $1,430; and Jefferson, $1,038. 

Housing News Digest, August 16

Vacancy rate for Denver area rental single-family units up slightly The highest vacancy rate was for five-bedroom residences at 5.5 percent while two-bedroom and four-bedroom residences had a vacancy rate of 1.8 percent. One-bedroom homes had a 1.9 percent vacancy. The median metro area rent was $995. For Adams County it was $1,087; Arapahoe, $950; Boulder/Broomfield, $1,312; Denver, $946; Douglas, $1,400 and Jefferson, $950. For those units that were vacant, the average days on the market was 25.8 in the second quarter down from 28.7 for the first quarter of 2012; and up from 15.7 for the second quarter of 2011.

Economist: Real estate market in better shape than most think RIFLE, Colorado — This region's real estate market probably is in better shape than most people feel it is, and is likely to rebound quicker than expected, according to a nationally recognized expert on real estate and the economy, who spoke here on Thursday. Lawrence Yun, chief economist and senior vice president of the National Association of Realtors, addressed the Glenwood Springs Association of Realtors at the organization's annual election and membership luncheon.

 Housing Starts Drop, Permits Jump; Jobless Claims Rise Groundbreaking on new U.S. homes unexpectedly fell in July and gains from the prior month were revised lower, a reminder of the housing markets weakness despite some recent signs of recovery. The Commerce Department said on Thursday that housing starts dropped 1.1 percent last month to a seasonally adjusted annual rate of 746,000 units.

Mortgage rates rise for third straight week Stronger economic activity placed upward pressure on long-term Treasury yields, and, in turn, lifted mortgage rates up for a third straight week. The Freddie Mac survey showed the 30-year, fixed-rate mortgage averaged 3.62% for the week ending Thursday, up from last week’s rise to 3.59%. Last year at this time, the 30-year FRM averaged 4.15%.

Wednesday, August 15, 2012

July CPI: Consumer price increases slow in Mountain-Plains region

The Bureau of Labor Statistics released Today the July CPI for US urban areas and regions. In the Mountain-Plains region, from July 2011 to July 2012, the CPI increased 1.8 percent, falling from June's year-over-year change of 2.0 percent.  

In the first graph, we see that the year-over-year change in July for the Mountain-Plains CPI was down from July 2011's change of 2.9 percent, and was well down from 2008's pre-recession annual change of 5.3 percent.

In the Mountain-Plains region, housing costs, which are a major portion of the CPI, continue to help keep increases in the CPI down. Housing overall was up year over year by 1.9 percent. 

Apparel prices continued to grow and were up, year over year, by 3.9 percent although transportation prices were up by only 0.5 percent, reflecting falling gasoline prices in recent months. Medical care prices were up by 3.6 percent.

The general slowing of CPI growth reflects ongoing moderation in consumer spending and modest economic growth. The resulting lack of solid growth in consumer spending has had a diminishing effect on CPI. Global demand is also slowing as Eurozone growth continues to slow.

The second graph shows year-over-year changes in Mountain-Plains CPI for all months since 2002. Annual CPI growth hovered around 3 percent for much of 2011.  The year-over-year change fell for much of 2012, but ticked back up again in June.Growth is now at the lowest levels seen since early 2011.

The CPI change from June 2012 to July 2012 was down 0.3 percent.

Over the past ten years (comparing June 2003 to June 2012), the CPI has risen 23.7 percent. In other words, a dollar today buys less than 80 percent of what it did in 2003.

Why is Colorado so 'awesome'?

Here in Colorado, vacancies are low and rents are increasing. Meanwhile, foreclosures are falling and home prices are increasing.

One of the major factors behind Colorado's in-demand real estate is its continued household formation. Even in spite of very modest job growth, people continue to move to Colorado and recent surveys of new college grads have shown that Colorado (specifically Denver) is in the top five of locations to which new grads would like to re-locate.

While it isn't exactly scientific, recent research done by tech blogger Renee DiResta also provides a few insights into how people view Colorado. DiResta compiled data on Google web searches of the 50 states using Google autocomplete to find out which terms are most searched in relation to each state.

Returned results for states include associated terms like "boring" "cold" "windy" "liberal" "racist" "expensive" and so on.

The terms associated with searches for Colorado?


Indeed, only four states were "awesome": Minnesota, Colorado, Texas and Vermont. 

Most terms returned for all states were negative, although healthy, skinny, and awesome are all (arguably) positive terms while cold is probably negative in the minds of many (but not all).

Nevertheless, Google autocomplete helps gives us a little bit of an increased understanding in how people from around the nation view Colorado and many probably like what they see. This in turn translates into more household formation and in-migration, which in turn leads to higher rents and more home sales.

New public trustees appointed in Pueblo, Boulder and Adams counties

The Denver Post reports today that three new public trustees have been appointed:

Saul Trujillo in Pueblo, Paul Weissmann in Boulder and Susan Orecchio in Adams. Susan Orecchio has been the deputy public trustee in Adams county for years.

There is no change in the following counties:

Larimer, Weld, El Paso, Jefferson, Douglas.

Changes are likely to come in Mesa and Arapahoe counties.

Why are the public trustees appointed in some counties? Find out here.

Builder confidence improves

From the NAHB press release:

WASHINGTON, AUG. 15 - Builder confidence in the market for newly built, single-family homes improved for a fourth consecutive month in August with a two-point gain to 37 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This gain builds on a six-point increase in July and brings the index to its highest level since February of 2007.

Tuesday, August 14, 2012

NAHB: Housing Opportunity Index up in most metros

According to the Housing Opportunity Index (HOI), released today by the National Association of Home Builders, the affordability of homes for purchase increased in all Colorado metros except Greeley from the second quarter of 2011 to the second quarter of 2012. Grand Junction was not included in the survey.

The HOI increased, year over year in Boulder, Denver-Aurora, Colorado Springs, Ft. Collins-Loveland, and Pueblo.

Comparing the different metro areas to each other, Pueblo was found to have the highest HOI and Boulder had the lowest HOI.

The values for each metro area during the second quarter of this year were:

Boulder 71.6
Colorado Springs 84.6
Denver-Aurora 76.8
Ft. Collins-Loveland 83.9
Greeley 85.6
Pueblo 90.5

The graph shows the trends in the HOI since the first quarter of 1999:

The HOI looks at for-purchase housing only and does not consider rental housing and rent levels. There are few surprises here, as Boulder is known for its expensive housing, and Pueblo is known for low-cost housing, although with much lower incomes as well.

Nevertheless, the increase in the HOI for most metros suggests that for-sale housing prices have remained rather stable while a little progress has been made in incomes.

In recent years, even with reports of bidding wars, we're finding that in many areas, home prices still aren't matching what they were in 2007 and 2008, and that the fiercest price competition is for the more modestly-priced homes. Although home prices have recently shown growth, most of these comparisons are only with 2011 prices and neglect the larger declines we've seen since 2008.

83 percent of new multifam permits in only four counties at mid-year 2012

Year-to-date through June of 2012, 83 percent of all new multifamily permits issued have been issued in Denver, Broomfield, El Paso and Douglas counties alone. 

According to new multifamily permit data for Colorado counties, 3,945 multifamily permits have been issued from January through June of 2012. 3,279 of them, or 83 percent, were issued in Denver, Broomfield, El Paso and Douglas counties. Adding in Boulder and Adams counties brings the total to 3,836, or 96 percent, of all multifamily permits through June.

Few other counties issued many multifamily permits as of June of this year.

Downtown Denver and the "northwest corridor" of the metro area have reported significant rent growth in recent years, and developers appear to be capitalizing on high demand in those markets. El Paso county has seen little development for the past decade, and although apartment vacancies have hovered around 6 percent in recent quarters, the long-time lack of new construction has encouraged new building of multifamily. A high median income and stable employment in Douglas County encourage new construction there.

Total multifamily permits issued, Jan-June 2012
Adams 220
Arapahoe 49
Boulder 327
Denver 1,567
Douglas 542
El Paso 597
Jefferson 8
Larimer 50
Mesa 7
Pueblo 0
Weld 5

With so little demand for new condominiums right now, it is safe to assume that the lopsided majority of new multifamily permits being issued are for rental housing. We see most of this activity in areas where vacancy rates have been tight or look to be tight for the near to mid-term.

With apartment vacancy rates now below five percent in the metro Denver area, the markets appear to be responding to tight vacancies with plans for future construction. Larimer county has also been a very active county for new multifamily activity over the past 18 months, although 2012 is a moderate year for Larimer county so far. during the second quarter, the apartment vacancy rate in the University area was zero percent, which will encourage additional construction in Boulder.

Change since 2011

Some counties saw very large increases in the number of multifamily permits issued. From January-June of 2011 to the same period this year, in Douglas County, multifamily permits increased more than 5,300% from 10 to 542, while in Adams county they increased from 0 to 220. Boulder County also saw a big increase (861%) with a rise in multifamily permits from 34 to 327, year over year through June, and Broomfield saw the largest increase from 0 multifamily permits to 573 permits, year over year through June. 

There was no multifamily permit activity at all in Pueblo County over the period, and Weld County increased only slightly from 0 to 5.

Housing News Digest, August 14

Roaring Fork rental market is tightening GLENWOOD SPRINGS, Colorado — Finding a home or apartment to rent in the Roaring Fork Valley is getting more difficult, according to local leasing agents and the Colorado Division of Housing. Traditionally, demand for rentals peaks in the spring and begins to taper off in the fall. But Jeff Chapman, a broker with Fleisher Land and Homes in Carbondale, said that's not the case this year.

 Colorado foreclosure filings rise (9News video) According to a report released Tuesday by the Colorado Division of Housing, foreclosure filings in Colorado's metropolitan counties were up 14 percent last month to nearly 2,000, compared to just over 1,700 in July of last year. Foreclosure auction sales were down 24 percent. Foreclosure filings are the initial filings that begin the process. Foreclosure auction sales are held once the process has been completed.

 Colorado foreclosure filings up in July Comparing the first seven months of this year with the same period last year, the county with the largest decline in foreclosure filings was Weld County where filings decreased by 9.5 percent. Mesa County, on the other hand, reported a 22.5 percent increase in foreclosure filings over the same period.

Colorado urban foreclosure sales reach 6-year low for July, but filings rise Filings — the initial stage of the foreclosure process — were up 14 percent in July from the same month a year earlier, to 1,976, in the urban counties the report said. But foreclosure auction sales were down 23.7 percent, to 865, the lowest total for the month since 2007.

 Foreclosure sales down across Northern Colorado In Larimer County, foreclosure sales decreased year-over-year by 45.8 percent, from 59 in July 2011 to 32 in July. Weld County foreclosure sales decreased by 44.8 percent during the same period, from 96 to 53. Foreclosure filings show that the number of foreclosure sales should continue to decreased year-over-year. In Larimer County, the number of filings decreased by 22.6 percent to 72 in July and in Weld, filings decreased by 20.5 percent to 124.

Colorado, industry search for value of energy efficiency improvements When Cathryn and Paul Crane went shopping for a new home in Boulder, what they kept thinking about was their log cabin in the mountains. "We spent a winter there and were impressed with how energy- efficient it was," Cathryn Crane said. "Of course, there aren't log cabins in Boulder." The Cranes settled for a new house in the Northfield Village development in north Boulder with high-performance insulation and windows, zoned heating and programmable thermostats.

Completed foreclosures in Colorado hit six-year low in July, filings rise

Foreclosure filings were up in Colorado during July, but foreclosure auction sales fell to a six-year low. According to a report released Tuesday by the Colorado Division of Housing, foreclosure filings in Colorado’s metropolitan counties were up 14 percent last month compared to July of last year, rising from 1,733 to 1,976. Over the same period, foreclosure auction sales were down 23.7 percent, falling to the lowest auction sales total recorded for July since 2007.

Among the counties surveyed, there were 865 foreclosure auction sales during July of this year, compared to 1,134 sales during July of last year. 

For the first seven months of the year, from January through July, foreclosure filings were up 4.9 percent in 2012 when compared to the same period last year. Foreclosure auction sales, however, were down 28.0 percent over the same period. 

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. 

“There were fewer than 900 auction sales during July, which is a long way from zero, but back in 2007 and 2008, we often saw more than 2,000 completed foreclosures in a single month,” said Ryan McMaken, a spokesman with the Colorado Division of Housing. “New foreclosure filings are down quite a bit also but numbers have been flat so far this year.”

Comparing the first seven months of this year with the same period last year, the county with the largest decline in foreclosure filings was Weld County where filings decreased by 9.5 percent. Mesa County, on the other hand, reported a 22.5 percent increase in foreclosure filings over the same period.

Eleven of twelve counties surveyed showed decreases in foreclosure auction sales during the first seven months of this year when compared to the same period last year. The counties with the largest decreases in foreclosure auction sales, year over year, were Boulder County and Denver County where auction sales decreased by 41.1 percent and 37.9 percent, respectively. Broomfield County reported an increase of 8.0 percent in auction sales over the same period. 

The county with the highest rate of foreclosure sales during July was Mesa County with a rate of 1,016 households per foreclosure sale. Adams County came in second with 1,256 households per foreclosure sale. The lowest rate was found in Boulder County where there were 7,029 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.

Thursday, August 9, 2012

Trulia: Denver asking rents up 10.5 percent, home prices up

According to a report released this week by Trulia, the asking rent in Denver during July 2012 was up 10.5 percent from July 2011. Trulia listed Denver among the metros with the largest increases in asking rents.

Colorado Springs was also included in the report and, according to Trulia, asking rents were up 10.4 percent in Colorado Springs.

Our own survey shows increases in rent also, although our data, which is based on actual rents collected via survey, shows smaller increases, year over year.

Trulia also reported that aksing prices for homes were also up in Colorado Springs and Denver metro, with asking prices up year over year by  4.2 percent and 8.6 percent, respectively.

See our home price archive for more complete info.

Based on asking rents and asking prices, this data shows some pretty large increases. Actual prices and rents increased, but, predictably, by smaller amounts according to a variety of other sources. See the data archives for recent data releases.

30-day mortgage delinquencies in Colorado hit four-year low, foreclosure inventory falls

30-day delinquencies fell to a four-year low in Colorado during the second quarter, dropping to 2.38 percent of loans surveyed during the second quarter. According to the National Delinquency Survey, released today by the Mortgage Bankers Association, Colorado's 30-day delinquency rate fell from the second quarter of 2011 when the 30-day rate was 2.59 percent. 30-day delinquencies are now at the lowest second-quarter rate reported since 2008.

The first graph shows 30-day delqineuncies by quarter in Colorado since 2006. The 30-day delinquency rate increased from the first quarter's delinquency rate of 2.03 percent, although 30-day delinquencies usually increase form the frist quarter to the second due to seasonal factors.

The number of loans that were 90 days delinquent of more were also down in Colorado, falling to 1.87 percent of all loans surveyed. The 90-day delinquency rate during the second quarter of last year was 2.1 perfent, and it was 1.96 percent during the first quarter of this year. The second graph shows the percentage of mortgage loans that were at least 90 days delinquent during the second quarter. The 90-day delinquency rate has been falling consistently since the fourth quarter of 2009.

The foreclosure inventory also fell during the second quarter and has fallen for the past seven quarters in a row. Colorado's foreclosure inventory dropped to 1.9 percent during the second quarter of this year, falling form last year's second quarter rate of 2.14 percent. The inventory was also down from this year's first quarter rate of 1.95 percent. The third graph shows the foreclosure inventory in Colorado:

National Comparisons:

As can be seen in the second and third graphs, Colorado's foreclosure inventory and 90-day delinquency rates are well below the national rates. The U.S. 90-day delinquency rate during the second quarter of this year was 3.04 percent, and it was 3.42 percent during the second quarter of last year.

The U.S. foreclosure inventory rate was 4.27 percent during the second quarter of this year and it was 4.43 percent during the second quarter of last year.

Although not pictured, the 30-day delinquency rate in Colorado is also below the national rate. The national 30-day delinquency rate during the second quarter was 3.14 percent, and it was 3.39 percent during the second quarter of last year.

Using the 90-day delinquency rate to compare Colorado to all other states, we find that Colorado had the 10th lowest delinquency rate in the nation during the second quarter of 2012. The only states with lower 90-day delinquency rates were Vermont, Iowa, Missouri, Nebraska, North Dakota, South Dakota, Montana, Wyoming and Alaska. The lowest 90-day delinquency rate in the nation was found in North Dakota where it was 0.66 percent, and the highest rate was found in New Jersey where it was 5.04 percent.

Delinquencies are measured by the MBA via surveys sent to major loans servicers. The MBA estimates it covers 88 percent of all first-lien residential mortgage loans outstanding in the US with the survey.

Slideshow: Vacancy rates across Colorado metros

Today we released the second quarter data on vacancies and rents in Colorado metro areas. A slideshow on rent growth can be found here.

The vacancy rate declined year over year in all metro areas. See the full report for details for each region.

The first graph shows the vacancy rate for Metro Denver, Ft. Collins/Loveland and Greeley since 2001. All three areas are seeing a generally tightening market, although Greeley has been volatile in recent quarters. Ft. Collins is the tightest with rates well below five percent (3.5 percent), and Metro Denver has not moved slightly below 5 percent to 4.8 percent. Greeley's vacancy rate was 5.4 percent during the second quarter.

The second graph shows the vacancy rates for Colorado Springs, Grand Junction and Pueblo since 2001. All of these areas are showing a general downward trend in vacancies as well, although we see some different patters at work here. Grand Junction, for example, follows a pattern very different from all other metro areas in Colorado. They experienced record-low vacancies from 2006-2008 during the most recent oil and gas boom, and have had a rather soft market since. The market is expected to slowly tighten there, however, and the vacancy rate was 5.5 percent during the second quarter - the lowest since 2008.

Colorado Springs's vacancy rate finally fell to 6 percent after a decade of vacancy rates that were often found in the 9 to 12 percent range. An unemployment rate of 9.8 percent during June illustrates that Colorado Springs is facing some headwinds in housing demand due to employment issues, however. Pueblo's vacancy rate is at a ten-year low and is clearly headed downward. This is helped by the fact that no new multifamily units have been built  in Pueblo in several years.

The third graph compares all metro areas and available submarkets during 2012's second quarter with the same period last year. The blue bars are last year's vacancy rate and the red bars are this year's rate. Note that in almost every market and submarket, the vacancy rate has fallen since last year. Of the 21 markets and submarkets reporting during the second quarter of this year, only 3 submarkets reported increases in the vacancy rate over last year: Northeast Colorado Springs Southwest Colorado Springs and Central Colorado Springs.

The overall evidence statewide is of a tightening market, and in metro Denver and northern Colorado especially, this looks to tighten more as new construction continues to be limited in the face of continued household formation. In some areas, such as Grand Junction and Colorado Springs, however, where employment is not strong, rent growth may be restrained somewhat by income factors.

Slideshow: Rent growth across Colorado, also inflation-adjusted rents.

Today we released the second quarter's vacancy and rent data for all metros in Colorado. For the first time since 2009, rent growth occurred year over year in all Colorado metros. The largest rent increases were found in Pueblo and in the Ft. Collins-Loveland area. All growth is measured in year-over-year comparisons.

The first graph shows year-over-year growth in all metro areas.

In eyeballing the graph, we see that the overall upward trend is clear in Metro Den and Ft. Collins. However, overall growth is still not as robust as it was in 2008 just before the financial crisis.

The second graph shows rent growth in the Ft. Collins-Loveland area. This is the most clear and robust trend in rent growth. Growth has exceeded 10 percent for the past two quarters, and was 12.8 percent during the second quarter. Much of this is due to a particularly strong job market.

The third graph shows the trend in Greeley. This is largely toward more growth, although growth has been moderating in recent quarters. The fundamentals point toward continued growth, however, unless unemployment worsens in the region. Apartment owners also benefit from proximity to the Ft. Collins area since, for some, Greeley functions as a more affordable bedroom community for workers in the Ft. Collins area. Greeley rents grew 1.9 percent during the second quarter.

The fourth graph shows rent growth in Grand Junction. There is not enough information here to pin down any definite trend, although the fundamentals in Grand Junction point toward continued rent growth if for no other reason than the fact that job growth is fairly stable, and virtually no new construction is taking place in multifamily in Grand Junction right now. GJ's multifamily market is still quite weak compared to what it experienced from 2004 to 2009 during a small oil boom that drove vacancy rates down to 1.5 percent for a time. The unemployment rate in Grand Junction remains above 9 percent. Rent growth during the second quarter was 6.9 percent.

The fifth graph shows the Pueblo market. Pueblo's second-quarter growth was very large with the average rent increasing 17.5 percent over the second quarter of 2011. This very large increase is largely a function of the fact that the average rent dipped significantly during the second quarter of 2011, before heading up again. There is a mild growth trend developing in Pueblo, considering the quarter-to-quarter numbers, but it is safe to regard the 17-percent increase as not indicative of an enormous growth trend in the works.

For metro Denver analysis, see here. For Colorado Springs analysis, see here.

The sixth graph shows the average rent for each metro area since 2002. Note that the Ft. Collins area rose above the metro Denver area for the first time last year. Pueblo, Greeley and Grand Junction remains the least expensive markets. There has been general growth in all markets over the past decade.

In the seventh, graph, however, I have adjusted the average rents for inflation and presented rents in constant 2001 dollars. When adjusted for inflation, only one market, Ft. Collins-Loveland is actually up from 2001 rent levels. All other metros show inflation-adjusted rents below 2001 levels as of 2012. Recent rent growth has begun to close this gap, however, and Pueblo and Grand Junction will soon be up in inflation-adjusted terms.

Colorado apartment vacancy rate falls to 4.9 percent as rents rise in all metros

The vacancy rate in Colorado apartments was down during the second quarter of 2012, falling year over year in all metro areas including Colorado Springs, Denver metro, Ft. Collins, Grand Junction, Greeley and Pueblo. According to a report released Thursday by the Colorado Division of Housing, the combined vacancy rate for apartments in 6 metro areas across Colorado was 4.9 percent during the second quarter. The rate was down from 2011’s second quarter rate of 5.2 percent. The combined vacancy rate fell to the lowest vacancy rate recorded since the first quarter of 2001 when the statewide vacancy rate was 4.3 percent. 

Increases in demand for rentals broadened to all metros of Colorado during the second quarter with vacancy rates in all metros dropping to 6 percent or below. The lowest metro-wide vacancy rate of 3.5 percent was found in the Ft. Collins/Loveland area and the highest was a rate of 6.0 percent in Colorado Springs. A vacancy rate below 5 percent indicates a tight market. 

The metro Denver vacancy rate during 2012’s second quarter, released last month in a separate survey, was flat year over year at 4.8 percent.

Although employment typically is a major driver in demand for rental housing, even areas with unemployment rates above 9 percent, such as Grand Junction and Colorado Springs, saw vacancy rates fall during the second quarter. 

“In spite of some relatively weak job growth in some metros, household formation continues in Colorado, and people are looking to rent apartments,” said Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, and the report’s author. “In those areas with the most job growth, like Larimer county, the apartment market has become very tight.” 

With the exception of the Ft. Collins/Loveland area, the vacancy rate also fell in all metros from the first quarter to the second quarter of this year. Seasonal factors often push vacancies down from the first quarter to the second quarter, however. 

Vacancy rates in all metropolitan areas were: Colorado Springs, 6.0 percent; Ft. Collins/Loveland, 3.5 percent; Grand Junction, 5.5 percent; Greeley, 5.4 percent; Pueblo, 4.3 percent. 

The statewide average rent in Colorado increased 7.4 percent from 2011’s second quarter to 2012’s second quarter, rising from $877 to an all-time high of $942. Across the state growth in average rents varied considerably, although all metros reported year-over-year increases. The average rent in the Colorado Springs area, for example, increased 1.8 percent, year over year, while the average rent in the Ft. Collins/Loveland area rose 12.8 percent. 

The largest increase in the average rent was found in the Pueblo area where it rose 17.5 percent from the second quarter of 2011 to 2012’s second quarter, following four quarters of year over year declines.

“We’re now seeing signs of the kind of general rent growth across all metros that we haven’t seen since 2008,” said Ryan McMaken spokesman with the Colorado Division of Housing. “Limited supply is an issue. New units are on the way, but there’s a lag on that, and some metros aren’t seeing much new construction at all.”

Average rents in all metropolitan areas measured were Colorado Springs; $776, Ft. Collins/Loveland, $996; Grand Junction, $674; Greeley, $662; Pueblo, $602.

The metro Denver average rent, measured in a separate survey, was $952 during the second quarter.