Friday, September 28, 2012

Personal income in Colorado up, slightly outpaced by nation

Personal income in Colorado rose 3.2 percent from the second quarter of 2011 to the second quarter of this year. According to the latest personal income numbers, released this week by the Bureau of Economic Analysis, nationwide personal income increased 3.3 percent over the same period.

In nominal terms, national personal income is now up by 6.4 percent over the pre-recession peak in personal income reached during the second quarter of 2008. In Colorado, personal income is now up by 6.5 percent from the peak also reached during the second quarter of 2008 in Colorado. 

When adjusted for inflation, however, personal income totals are still below pre-recession peaks. When calculate din constant 2001 dollars, nationwide personal income is down 1.3 percent from the pre-recession peak and Colorado personal income is down 1 percent.

When indexed and charted, we can see that both the US and Colorado are a bit below peak levels and that the nation has shown slightly more growth than Colorado in personal income in most quarters during the past decade.

Personal income due to wage earnings has increased less in Colorado than nationwide. Income due to wages was up 3.4 percent year over year nationwide from the second quarter of last year to the second quarter of this year. But, wage earnings were up 2.9 percent in Colorado over the same period.

According to the BEA press release, Colorado is in the third quintile for quarter-to-quarter growth, placing it in the middle of the pack among the state.  Personal income grew 1 percent nationwide and grew .97 percent in Colorado, from the first quarter to the second quarter of this year.

According to the release:

State personal income growth slowed to 1.0 percent in the second quarter of 2012, from 1.7 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Growth slowed in 39 states plus the District of Columbia, accelerated in 10, and was unchanged in Nevada. Personal income growth ranged from 2.1 percent in North Dakota to 0.4 percent in New Mexico. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 0.2 percent in the second quarter from 0.6 percent in the first quarter. 

Bankruptcy filings down for 19th month in a row

In Colorado during August, total bankruptcy cases filed fell 16 percent, year over year, to 2,236 cases. During August 2011, 2,663 cases were filed. August was the 19th month in a row in which bankruptcies declined year over year,following three years of growth from 2007 to 2009.

The first graph shows the year-over-year changes in bankruptcy case filings since January 2007:

This sustained decline in bankruptcy filings suggests that consumers continue to get a handle on debts now that more than three years have passed since the beginning of the national 2007-2009 recession.

In general, bankruptcy filings are about where they were during 2004, although they are up significantly since since 2006 following the implementation of the 2005 Bankruptcy Act (discussed here).

In year-to-date totals from January through August, bankruptcy filings have fallen for the past two years, are now on a level similar to what was experienced during 2004 which was a non-recessionary period.

Slideshow: Single-family and condo vacancies

Below is some additional analysis of data collected by the single-family/condo vacancy and rent survey released last month.

The first graph shows the metro-wide vacancy rate for single-family homes, condos and townhomes. The vacancy rate durign the second quarter of this year was 2.0 percent, which is very low.

In recent years, the vacancy rate in single-family homes tends to be lower than in multifamily units. The vacancy rate since 2009 has tended to come in between 5 percent and 9 percent while it has ranged from 2 percent to 6 percent in single-family units et al. The decline in single-family vacancies can be attributed at least partially to the rise of foreclosures and the decline of home sales. This phenomenon has driven many households into renting homes instead of owning.

The second graph shows that this trend in declining vacancies extends to condos and townhomes. Condo vacancies have tended to be higher and more volatile than that in houses and townhomes, but all three property types have nevertheless seen declines over the past ten years. 

 The third graph shows the nominal (not inflation-adjusted rent) as measured by the report.Rents have been largely flat at around $1,050 for the past several quarters. Growth was significant between 2005 and 2011, however. Property managers have noted that many owners are reluctant to raise rents more than 5 percent in order to avoid turnover, and overall demand for single-family rentals may be impacted by ongoing increases this year in existing home sales.

The fourth graph shows the average rent by property type. We can see that condos, by far, have the lowest average rent and that the average rent is actually down slightly from where it was in 2010. Condo rents are bringing down the overall metro-wide average rent in these properties.

If we adjust for inflation, we see that the average rent hasn't really gone up since 2006. The increases in nominal rents in recent years has been just enough to keep rents flat in real terms.Over the past ten years, the inflation-adjusted average rent for these properties in metro Denver has gone down from $919 (2nd Q 2003) to $800 (2nd Q this year.)

Thursday, September 27, 2012

NAR: Pending home sales grow nationwide, fall in West region

Pending home sales were up nationwide by 9.6 percent year over year nationwide, but were down by 2.7 percent in the West region of the US. According to the National Association of Realtors' pending home sales report released today, the West region was the only region to report declining year-over-year pending home sales. Pendign home sales were up year over year by 18 percent, 18.5 percent and 12.3 percent in the Northeast, Midwest and South, respectively. Over the past year, growth in pending home sales has been weaker in the West region than in all other regions.

Colorado-specific data, however, tends to show solid growth in home sales both in metro Denver and statewide in recent months. The lackluster growth in regional home sales is likely being driven by a continued weak economy in California and Nevada where the unemployment rates continues to be well above the national unemployment rate.

See here for NAR's report.

According to NAR's press release:

"The index shows 16 consecutive months of year-over-year increases, and that has translated into a higher number of closed sales. Year-to-date existing-home sales are 9 percent above the same period last year, but sales were relatively flat from 2008 through 2011," Yun added.
Existing-home sales this year are expected to rise 9 percent to 4.64 million, and gain another 8 percent in 2013 to nearly 5.02 million. With generally balanced inventory conditions in many areas, the median existing-home price is projected to rise about 5 percent in both 2012 and 2013.

KC Fed: manufacturing activity "slowed somewhat" in district

The Federal Reserve of Kanasa City released its September Manufacturing Report today on the tenth district, which in cludes Colorado:

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 slowed somewhat, although producers' expectations for future activity remained relatively positive.

"Factories reported only minimal overall growth in our region in September, and both production and new orders fell slightly" said Wilkerson. "But firms anticipate growth to pick up later this year and on into next year."

See the full report here.

Wednesday, September 26, 2012

Home inventory down 28 percent in September

According to Department of Numbers, the home sales inventory in the Denver area fell again in September, dropping 28 percent to 14,300 homes. September was the  19th month in a row during which the inventory has fallen year over year.

Unfortunately, the Department of numbers data only goes back to 2006, but the Denver-area inventory was 37,600 during July 2006. the first graph shows the decline in inventory over the past six year:

During September 2011, the inventory was 20,064.

So far this year, single-family building permits are only up about 35 percent from last-year's very low numbers, and population in-migration continued to be solid through 2011. So unless home building picks up significantly or in-migration lessens significantly, the home sales inventory is likely to continue to be tight.

Historic lows in new home sales activity and inventory

In my write up for today's new home sales numbers, I noticed that inventory and new home sales are at very low numbers. I didn't realize just how low, however.

I went in and looked at the historical data back to 1973, which is when the Census Bureau began publishing new home sales data for regions of the United States.

What I discovered is that the new home inventory is at the lowest point ever recorded, and that new home sales are near all-time lows in nearly forty years of data.

The first graph shows new home sales for the West region of the United States. The 1970s featured a fairly significant increase and collapse in homebuilding, which ended with the fairly-severe 1982 recession. The 1990s-2000s cycle was much larger, however. In absolute numbers, homebuilding in the US West region is at low levels comparable to the lows seen during the learly 80s and briefly during the mid 70s. Keep in mind though that population in the West is much larger now, so on a per-capita basis, homebuilding in the West is almost certainly at an all-time low right now, at least for the post-WWII period.

The second graph shows the new home inventory since 1973. The inventory, as calculated here, is the difference between new homes sold and the number for sale each month. The graph shows inventory at an all-time low since 1973.

Inventory headed up as the economy worsened in the late 1970s and declined again in the late days of the 1982 recession. It hit an all-time low (at that time) at the end of the dot-com boom and then hit all-time highs as national fiscal and monetary policy encouraged unprecedented homebuilding. In the aftermath of the bubble, however, the inventory has hit a 40-year low. Inventory in existing home sales is also very low, so this ongoing scarcity in inventory will continue to contribute to rising single-family home prices in the near term. 

New home sales grow in West region, reach 5-year high in August

New single-family home sales in the U.S. West rose 80 percent from August 2011 to August 2012, and new home sales have increased in the region, year over year, for seven months in a row. With seven months of sustained year over year growth, new home sales are experiencing some of the most sustained growth seen since 2004, with growth rates reaching a ten-year high.   According to today's New Home Sales report, released by the Census Bureau,there were 9,000 new home sales in the Western U.S. during August 2012.

The report, which monitors sales activity for newly constructed houses, reported that in the West, new home sales were up from August 2011's 5,000 new homes sold.  Nationwide, sales rose 24 percent, rising from 25,000 to 31,000 during the same period.

The first graph shows monthly new home sales totals for each month since 2003. New home sales in the West were tied at 9,000 for a five-year high during August. New home sales for August have not been higher since 2007.

For the West region:

The second graph shows that new home sales continue to be well below peak levels, although they have begun to slowly move up in recent months. 

New home sales peaked during the spring and summer of 2005 and have generally trended downward since. The number of new houses sold in the United States is down 75 percent since the peak of March 2005, and new home sales in the West have fallen 76 percent since sales peaked in the region during March 2004.

The third graph shows the declines in both US and regional totals in new homes for sale.

The number of new homes for sale has also fallen off considerably. The number of new houses for sale in the West has fallen 79 percent since the total peaked during June 2007, and the same total has fallen 75 percent in the US since the number of new homes for sale peaked in the US during August 2006.

As we see signs of growth in new home sales, the number of new homes being offered for sale continues to decline, and is now at the lowest point recorded since the 1990s. This has led to continued declines in inventory.

As a final note, we can also look to the new home inventory. In this case, we calculate inventory by subtracting the number of new home sales in a given month from the number of new homes for sale at the end of the previous month. In the final graph, we see that the inventory is near a ten-year low, and is at 19,000 homes, the lowest point reached since the 1990s.  This is good news for owners seeking to sell homes since it suggests that fewer new homes are sitting and waiting to be sold, thus diminishing some of the inventory-driven downward pressure on prices.

This report is just the latest report showing ongoing increases in home sales, while at the same time showing declines in inventory. In the short term, with continued monetary easing, demand for homes looks to continue as inventory wil lonly slowly grow, contributing to ongoing price increases.

Housing News Digest, September 26

Rise in Colorado resort real estate sales in 2012 fueling hope of rebound
A surge in sales in 2010 — particularly in mountain regions' more affordable locations — gave hope that the recession-pinched real estate market was recovering, but 2011 saw yet another dip, with sales falling about 10 percent across the high country.
A strong start to 2012 rekindled optimism that the bleakness was behind the resort real estate market.
"It's looking like we have hit some sort of solid bottom," longtime Aspen broker Bob Ritchie said.

Once happy homeowners, now reluctant renters (CBS News) DOUGLAS COUNTY, Colo. - About those rising home prices: In Phoenix -- hit hard by the housing meltdown, prices were up more than 16 percent in July. In Detroit, they jumped more than 6 percent. And in Denver, prices were up nearly 5.5 percent. All of that are good news for the folks who are keeping up with their mortgages. But people facing foreclosure are running into a new problem. Nationally,the availability of rentals is now at its lowest rate since 2001.

  Stoneleigh to develop 298-unit apartment project in Denver Stoneleigh Companies LLC and Arris Investments LLC announced on Wednesday the acquisition of 13.8 acres of vacant land along with the closing of a construction loan for the 298-unit apartment project called M2 Apartments in Denver. Stoneleigh said the property is the ninth multi-family project developed or acquired by it in the past three years and adds a new major market to its investment portfolio.

 Alpert unveils Sloan's Lake community Jonathan Alpert, whose family has been involved in real estate in the Denver area for more than half a century, is developing a modern, townhome and single-family community at Sloan’s Lake. The development, called FrameWork at Sloan’s Lake, is replacing ramshackle condo units built in the late 1950s. Only one was owner-occupied with the rest being rented, said Alpert, principal of TreeHouseDenver.

 Solar panels installed on low-income homes for free as GRID Alternatives comes to Colorado GRID Alternatives, a California-based nonprofit group that works on renewable energy, is launching a national expansion plan to bring solar panels to homes across the country -- and its first stop is in the Denver metro area, which has a long and complicated history with alternative energy research.

Tuesday, September 25, 2012

Case-Shiller: Denver home prices grow at highest rate since Janaury 2002

Case-Shiller released its home price index for July 2012 today. The home price index for the Denver area rose 1.3 percent percent from June to July, and rose 5.4 percent, year over year, from July 2011 to July 2012.  The year-over-year increase in July was the seventh year-over-year increase in a row for Denver, and was the largest increase since January 2002. The first graph shows the index values since 2001. The index value is at the highest value seen since November 2007.

 According to S&P's press release, home prices nationwide continued to show some signs of growth:
“Home prices increased again in July,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “All 20 cities and both Composites were up on the month for the third time in a row. Even better, 16 of the 20 cities and both Composites rose over the last year. Atlanta remains the weakest city but managed to
cut the annual loss to just under 10%.

“The news on home prices in this report confirm recent good news about housing. Single family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing. Upbeat trends continue. For the third time in a row, all 20 cities and both Composites had monthly gains.
In year-over-year comparisons for July, four 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 9.9 percent, while the index in New York fell 2.6 percent. Denver was among the sixteen cities reporting increases, and had the fourth-largest increase of the twenty cities. Only Detroit, 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 30 percent since it peaked in July 2006, but the Denver index is down only 5.3 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 second time in 22 months with an increase of 1.2 percent while Denver reported an increase of 5.4 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.

Philly Fed: Colorado again lags national index in year-over-year comparisons

The Coincident Index for Colorado rose 0.38 percent from July 2012 to August 2012, which was above the national index's increase of 0.14. August's index, which was released today 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 (0.4%) than in most states. Nationally, the index increased 0.3 percent. 

According to the August 2012 report:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for August 2012. In the past month, the indexes increased in 25 states, decreased in 12 states, and remained stable in 13 states, for a one-month diffusion index of 26. Over the past three months, the indexes increased in 28 states, decreased in 16 states, and remained stable in six states, for a three-month diffusion index of 24. 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 0.1 percent in August and 0.5 percent over the past three months.

The graph below compares the 3-month change in both the Colorado Index and the US index. After five months of lagging the nation in the 3-month change, Colorado moved above the national growth rate in August 2012.

The second graph shows year-over-year changes in the index, and an upward trend was evident through most of 2011, but now shows signs of falling below national growth rates.

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.Colorado has shown a smaller year-over-year growth rate than the nation for the past five months.

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.

FHFA: Rocky Mountain region's home prices up almost 12 percent

House prices in June in the Mountain region, which includes Colorado, were up substantially, rising 11.9 percent, year-over-year from July 2011 to July 2012. Nationally, the house price index rose 3.7 percent over the same period. The new house price index numbers, released today by the Federal Housing and Finance Agency, also showed that the national index is down 15.2 percent from the peak level reached in June 2007, while the Mountain region's index is down 23.1 percent over the same period. The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.
The second graph shows each month's house price index compared to the same month a year earlier: July 2012 was the 6th month in a row during which the house price index rose year over year, following 52 months of year-over-year declines.
This report is just the latest home price index showing accelerating growth in home prices in the US and regionally.

Housing News Digest, September 25

Prominent office building on southeast side falls into foreclosure One Gateway Plaza, one of the largest and most prominent office buildings on Colorado Springs’ southeast side, has fallen into foreclosure as its owner tries to work out a new deal with a lender. The 117,631-square-foot building, northeast of Academy and Fountain boulevards, is owned by NNN One Gateway Plaza, a limited liability company in Southern California.

 Claim forms mailed to borrowers who lost homes to foreclosure Read more: Claim forms mailed to borrowers who lost homes to foreclosure - The Denver Post Read The Denver Post's Terms of Use of its content: Claim forms are being mailed to Colorado borrowers who lost their homes to foreclosure between Jan. 1, 2008, and last Dec. 31, and who may be eligible for payment under a national mortgage-foreclosure settlement, Attorney General John Suthers said Monday. Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo — the nation's five largest mortgage servicers that agreed to the $25 billion settlement with the federal government and attorneys general for 49 states and the District of Columbia.

Warning of massive foreclosures in Douglas County was overstatement An e-mail warning Douglas County school officials of expected massive foreclosure evictions next month that could affect their students turned out to be an overstatement. While well-intentioned, the e-mail sent last week by the district's liaison for homeless students under the subject line "in order to be best prepared" appears to be based on a misinterpretation of remarks made by a county housing official.

 Foreclosure numbers fluctuating EAGLE COUNTY, Colorado — Foreclosures are up across Colorado, but not as much as projected, says the Colorado Division of Housing. Foreclosure filings were down 1.6 percent in Colorado metro counties during August. Foreclosure auction sales fell to a six-year low, down 10.4 percent from the same time a year ago, according to a Colorado Division of Housing report released Thursday.

 Central Colorado Housing officials warn of homeowners scam Homeowners beware. Housing consultants of the Central Colorado Housing have some serious warnings about three scams targeting local homeowners and those looking to purchase a home. "I've had a couple of clients that have come in caught up in a scam," said Laura Yost, housing consultant for CCH, a department of the Upper Arkansas Area Council of Governments. "We are worried there may be more people out there being targeted."

Monday, September 24, 2012

Housing News Digest, September 24

TRI Pointe Homes Appoints Matt Osborn to Head Its New Colorado Division DENVER, CO -- TRI Pointe Homes continues its expansion throughout the western states, appointing industry veteran Matt Osborn to spearhead its entry into the Colorado housing market as president of its newly established Colorado division. "With his extensive local background, Matt is the ideal candidate to enable us to take advantage of the extremely favorable conditions in the Colorado market," stated Doug Bauer, CEO of TRI Pointe Homes. "We are always evaluating expansion opportunities, and Colorado presents one of the most promising. Job growth continues to be very positive, the state has a well-educated workforce, the home price index for Denver continues to rise, and it is just a great place to live."

Upping occupancy at Village Court Apartments With the recent renovation of the Village Court Apartments in Mountain Village, the town utilized a grant from the Colorado Division of Housing and is ready to honor some of its requirements. The renovation was completed last winter at cost of $1.38 million, and part of the money came from a $135,000 housing development grant from the state division of housing. The grant came with some stipulations to ensure the apartments meet rental and occupancy limitations, which come in the form of a beneficiary and rent use covenant.

 Rise in Colorado resort real estate sales in 2012 fueling hope of rebound The real estate market in Colorado's High Country is finally stabilizing as it emerges from the darkness of the past three years — although sales at the highest end remain soft. Sales in six of Colorado's seven resort-anchored regions are up year-to-date over last year, rising a combined 2.8 percent through July. But sales remain a fraction of the peak boom times seen in 2007, when Routt, Eagle and Pitkin counties each surged past $1 billion in sales by the end of July.

Good August sales boost Aspen real estate ASPEN — Strong sales in August salvaged the summer for the real estate industry in the upper Roaring Fork Valley, but numbers for the year to date still aren't keeping pace with last year's. The total dollar volume of all real estate transactions in Pitkin County in August was $105.21 million, according to deeds filed with the Clerk and Recorder's Office. That was a 16 percent increase from the $90.40 million in August 2011

 Affordable housing for women veterans unveiled It will be called the “Odyssey,” in reference to the classic Greek journey of soldiers returning from the Trojan War. This modern-version of the Odyssey will be a new 36-unit apartment unit project to serve women military veterans and other at-risk females participating in service programs. The Empowerment Program, a non-profit group, recently received a $5.6 million tax credit award to fund the development of the Odyssey, which will be built on the site of the historic Elyria Elementary School at East 47th Avenue and High Street near the National Western Stock Show facility. The school also will be renovated as part of the project. The Odyssey and the renovation will cost a total of $6.8 million.

Friday, September 21, 2012

Colorado unemployment rate falls below national rate for first time in four months

The Bureau of Labor Statistics today released employment information on all states for August 2012.The seasonally-adjusted unemployment rate for Colorado during July was 7.8 percent.

According to the BLS press release:

Sixteen states and the District of Columbia reported statistically significant unemployment rate decreases from August 2011, the largest of which occurred in Mississippi (-1.8 percentage points). New York experienced the only significant over-the-year increase in its unemployment rate (+0.8 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 fell from 8.3 percent to 7.8 percent from July to August, and it fell from 8.1 percent to 7.8 percent from August 2011 to August 2012.

Much of the month-over-month decrease in Colorado was fueled by a decline in the total labor force size.

The national unemployment rate (seasonally-adjusted) was 8.1 percent during August.

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

See here for metro area unemployment info in Colorado.

For the first time in several months, the Colorado unemployment rate moved below the national unemployment rate. This will be good for ongoing in-migration of households to Colorado, although as noted recently, overall economic growth in Colorado may be in fact be lagging many states.

The states with the highest unemployment rates were Nevada and Rhode Island and California where the rates were 12.1 percent, 10.7 percent and 10.6 percent, respectively. The states with the lowest unemployment rates were South Dakota, Nebraska, and North Dakota, where the rates were 4.5 percent, 4.0 percent and 3.0 percent, respectively.  

Unemployment rate falls in all Colorado metros

Total employment growth in Colorado in August continued to show slight growth statewide in the year-over-year comparisons. In August, total employment in Colorado was down 112,000 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 Augst 2012 are:
Colorado Springs, 9.1%
Denver-Aurora, 7.6%
Fort Collins-Loveland, 6.1%
Grand Junction, 8.8%
Greeley, 8.3%
Pueblo, 10.6%
Statewide, 7.8%

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 Colorado Springs are has moved into second place behind Pueblo for the highest unemployment rate while Grand Junction has fallen again. The Greeley area showed a big drop in its unemployment rate from 9.0 percent to 8.3 percent, year over year.

Year over year, the unemployment rate decreased in all metro areas. 

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 August 2012 employment totals:

Colorado Springs MSA, 8.8%
Denver-Aurora MSA,3.6%
Fort Collins-Loveland MSA, 2.0%
Grand Junction MSA, 8.4%
Greeley MSA 1.4%
Pueblo MSA, 3.1%
Statewide, 4.2%

All things being equal, the areas further below the peak have recovered the least from initial job losses.
For the first time since the recession, Colorado Springs is further below peak levels than all other metros, including Grand Junction. We see here also that the Ft. Collins-Loveland area has one of the strongest markets, with Greeley also moving toward peak levels.Northern Colorado continues to show signs of significant job growth.

(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 August 2012, the rate in the Boulder-Longmont area was 6.1%.)

Unemployment rate falls as labor force shrinks in August

Colorado gained 4,554 jobs in August 2012 compared to August of 2011, and the non-seasonally-adjusted unemployment rate fell year-over-year from 8.1 percent to 7.8 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 August, not seasonally adjusted, rose to 2.52 million jobs. The decline in the unemployment rate, however, was driven by a decline in the total labor force size which decreased, year over year by 5,271 to 2.73 million workers. 

In month-to-month comparisons, the (not-seasonally adjusted) unemployment rate fell from 8.3 to 7.8 percent from July to August this year.  1,935 jobs were added month-over-month while 12,749 people left the work force over the same period.

As can be seen in the second graph, total employment rose slightly from July to August, while labor force size fell.  Since employment grew slightly while the labor force shrank, the unemployment rate fell.The labor force size is nearing its 2008 peak levels, although total employment is still 112,000 below peak levels.

The jobs deficit has been cut in half since late 2010, although the current deficit of 112,000 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. August 2012 was the 20th month in a row showing a positive year-over-year change in total employment.

The graph also shows the year-over-change in the labor force. Total labor force size fell 0.1 percent from August 2011 to August 201. 

Overall this report shows that job growth continues, albeit at a tepid rate.  The labor force decline signals that discouraged workers continue to be factor in calculating the unemployment rate as employment growth is not strong enough to drive substantial increases in labor force participation. 

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.

Thursday, September 20, 2012

Highest growth in home prices found in metro Denver and northern Colo.

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-year changes for Colorado metros were:

Change from July 2011 to July 2012 (in %):
Colorado statewide: +3.6
Boulder +2.8
Colo Springs +2.2
Denver metro +6.7
Ft. Collins +3.8
Grand Junct +2.6
Greeley +3.7
Pueblo -4.2

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 206,200
Boulder 310,000
Colo Springs 185,000
Denver metro 217,100
Ft. Collins 222,900
Grand Junct.161,900
Greeley 161,000
Pueblo 99,400

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. The highest values and most growth tend to be in metro Denver and northern Colorado while the lower prices and smallest growth rates tend to be in southern Colorado and the Grand Junction area.

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.

Housing News Digest, September 20

Foreclosures in Weld County rise in August Foreclosure filings in Weld County rose 21 percent in August from July, according to numbers released Wednesday by the Colorado Division of Housing.
State wide, filings rose 15.7 percent, according to the release.
“With all of the slowdowns and administrative delays that pushed foreclosure filings down so far last year, I expected a larger increase in filings this year that we’re seeing,” Ryan McMaken, spokesman for the Colorado Division of Housing, said in the news release. “Instead, new foreclosures are only up slightly this year, while completed foreclosures really dropped off, reflecting last year’s big drop in new filings.”
Comparing this year to last year in Weld County, foreclosure filings in August were about the same, with 149 filings last year and 150 this year.
Through the first eight months of the year, there have been 1,161 total foreclosure filings in the county.

Foreclosure filings up 4% in Colorado metro counties For the first eight months of 2012, from January through August, foreclosure filings were up 4.0 percent in Colorado metro counties when compared to the same period last year, according to a report released Thursday by the Colorado Division of Housing. Foreclosure auction sales, however, were down 25.7 percent over the same period. Foreclosure auction sales are opened foreclosures that have proceeded through the full foreclosure process to final sale at public auction.

Home ownership: An American dream in decline Back in the day, owning a home was a symbol of maturity — you were all grown up, working hard and living the American dream. It was shelter and stability and a nest egg that grew in value, protecting your future. Today, the American dream may have lost some of its luster for a new generation that wants or may need to be more mobile, have more discretionary income and not be tied to a place that may one day need a new roof or furnace.

 Colorado sees fewer foreclosure actions Foreclosure auction sales in Colorado’s metro counties were down 10.4 percent in August compared with August 2011, falling to 1,341 from 1,497. Over the same period, foreclosure filings fell to 2,287 from 2,325. For the first eight months of the year, foreclosure filings were up 4 percent compared with the same period last year. Foreclosure auction sales, however, were down 25.7 percent over the same period.

Housing authorities file lawsuit Some Colorado housing authorities have already joined the class action lawsuit and Colorado isn’t the only state participating. Many housing authorities throughout the country have joined in. The lawsuit was brought about when HUD instituted a requirement that the housing authorities use all reserve monies they have saved up before they could receive any more money for operating funds. As a result, many housing authorities lost their funding for 2012. The Conejos County Housing Authority currently maintains 44 units and, if they participate, they will be suing for the loss of this year’s operating funds.

FHFA: Home prices down again in Colo. Springs, Pueblo and Grand Junction

The House Price Index (HPI) rose from the second quarter of 2011 to the same period this year in every Colorado metro area except Colorado Springs, Pueblo and Grand Junction. The areas showing increases in the HPI included Boulder, Denver-Aurora, Greeley, and the Ft. Collins-Loveland area.

The second-quarter HPI data, released last month by the Federal Housing Finance Agency for hundreds of metropolitan areas nationwide, shows continued declines in southern and western Colorado. Prices in Colorado Springs, Pueblo and Grand Junction have fallen, year over year, in each quarter since early 2011.

Statewide, the Colorado home price index was up year over year. (See the analysis here.)

Year over year, the 1-year changes in each metro area were:
Boulder +1.4%
Colo Springs -0.4%
Denver-Aurora +0.1%
Fort Coll-Loveland +1.4%
Grand Junction -2.7%
Greeley +2.0%
Pueblo -2.8%

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 2008.

Since the fourth quarter of 2008, the year-over-year changes have been generally negative. The graph also shows us that:

-Grand Junction and Pueblo have consistently shown some of the largest decreases in recent years.

-The Ft Collins-Loveland area has tended to show the smallest decreases in recent years, and together with Boulder shows some of the largest increases in recent quarters.

The second graph shows the actual HPI values for each quarter going back to 2005. 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 2012.

Boulder -2.5
Colo Springs -11.9
Denver-Aurora -4.1
Fort Coll-Loveland -2.4
Grand Junction -20.3
Greeley -14.0
Pueblo -13.1

This latest report overall shows a continuation of earlier trends shows in this report. Home prices continue to grow in metro Denver and northern Colorado, while prices are falling in southern Colorado and the Grand Junction area. That makes sense economically since Colorado Springs, Pueblo, and Grand Junction are facing some of the highest unemployment rates in Colorado. This report shows home price growth to be somewhat weaker than is being seen in other reports such as CoreLogic and Case-Shiller where growth is exceeding 5 percent in recent months.The Colorado Association of Realtors data shows less home price growth in the Colorado Springs area than in the Denver metro area.

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.

FHFA: Rocky Mountain regional home prices up 11 percent

House prices in June in the Mountain region, which includes Colorado, were up substantially, rising 11.1 percent, year-over-year from June 2011 to June 2012. Nationally, the house price index rose 3.7 percent over the same period. The new house price index numbers, released this month by the Federal Housing and Finance Agency, also showed that the national index is down 15.3 percent from the peak level reached in June 2007, while the Mountain region's index is down 23.3 percent over the same period.

The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.

The second graph shows each month's house price index compared to the same month a year earlier:

June 2012 was the 5th month in a row during which the house price index rose year over year, following 52 months of year-over-year declines. 

This report is just the latest home price index showing accelerating growth in home prices in the US and regionally.

FHFA: Colorado home prices up 6 percent during 2nd Q

Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), rose 6.0 percent from the second quarter of 2011 to the second quarter of 2012. According to the second-quarter 2012 HPI, released last month by FHFA, the home price index for Colorado, in year-over-year comparisons, has risen for the second time since the end of the homebuyer tax credits, and it has risen for only the fifth time since 2007. Nevertheless, the second quarter's increase was the largest year-over-year increase since the fourth quarter of 2001.

The Colorado HPI is now down 9.9 percent from the peak in the state's HPI which was reached during the third quarter of 2006. The national index is down 22.4 percent from its peak, which it also reached during the third quarter of 2006.

The HPI for the United States rose 2.4 percent from the second quarter of 2011 to the second quarter of 2012, and until the second quarter, the national HPI had not shown a year-over-year increase since the first quarter of 2007.

The first graph shows the Colorado HPI compared to the US HPI since 2001. 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 this year. 

In this index, the US price index can be described as more "bubble-like" than the Colorado index which did not experience a run up in prices to the same degree as was the case in the national index. Although Colorado's index is higher, the index value increased much more from 2001 to the peak nationally than in Colorado. From 2001 to the third quarter of 2006, the national HPI increased 51 percent, while it only increased 23 percent in Colorado. In turn, the correction has been more severe nationally.

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 year 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.

Overall, this index suggests that, since 2007, overall home prices in Colorado have been more resilient than has been the case nationally.The acceleration in home prices reflected in the second quarter's 6 percent increase reinforces perceptions of an increasing growth trend in home prices in Colorado, and this FHFA data shows similar trends to what has been found in Case-Shiller and Corelogic home price data.

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

Denver's Household Income at $47,371 in 2011, American Community Survey Shows

WASHINGTON, Sept. 20, 2012 /PRNewswire-USNewswire/ -- The median household income in Denver was $47,371 in 2011, compared with the national figure of $50,502, according to statistics released today from the 2011 American Community Survey by the U.S. Census Bureau. In addition, 17.2 percent of people in Denver did not have health insurance coverage, compared with 15.1 percent nationally. A selected profile of Denver appears below, including statistics on education, housing and the foreign-born population.

"The American Community Survey provides a wide range of important statistics about our nation's people, housing and economy for all communities in the country - including Denver," said Thomas Mesenbourg, the Census Bureau's acting director. "The results are used by everyone from retailers, homebuilders and police departments, to town and city planners."

The survey is the only source of local estimates for most of the 40 topics it covers, such as educational attainment, housing, employment, commuting, language spoken at home, nativity, ancestry and selected monthly homeowner costs down to the smallest communities.

Other selected highlights for Denver:

Completed foreclosures in Colorado down 26 percent during 2012

Foreclosure filings were down 1.6 percent in Colorado metro counties during August, and foreclosure auction sales fell to a six-year low. According to a report released Thursday by the Colorado Division of Housing, foreclosure auction sales in Colorado’s metropolitan counties were down 10.4 percent last month compared to August of last year, falling from 1,497 to 1,341.  Over the same period, foreclosure filings were down, dropping from 2,325 to 2,287.   

For the first eight months of the year, from January through August, foreclosure filings were up 4.0 percent in 2012 when compared to the same period last year. Foreclosure auction sales, however, were down 25.7 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.

“With all of the slowdowns and administrative delays that pushed foreclosure filings down so far last year, I expected a larger increase in filings this year that we’re seeing,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “Instead, new foreclosures are only up slightly this year, while completed foreclosures really dropped off, reflecting last year’s big drop in new filings.”

Comparing the first eight months of this year with the same period last year, the counties with the largest declines in foreclosure filings were Weld and Boulder counties where filings decreased by 8.3 percent and 8.6 percent, respectively.  Mesa County, on the other hand, reported a 26.4 percent increase in foreclosure filings over the same period.

Ten of twelve counties surveyed showed decreases in foreclosure auction sales during the first eight 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 Douglas County and Denver County where auction sales decreased by 37.9 percent and 37.2 percent, respectively. Broomfield  and Pueblo counties reported increases of 8.3 percent and 1.7 percent, respectively, in auction sales over the same period.  

The county with the highest rate of foreclosure sales during August was Pueblo County with a rate of 574 households per foreclosure sale. Mesa County came in second with 752 households per foreclosure sale. The lowest rate was found in Boulder County where there were 2,390 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.

Wednesday, September 19, 2012

FREE Informational Webinar For DOH Funds Applicants (PBV, PAB, and CHIF)

FREE Informational Webinar For DOH Funds Applicants (PBV, PAB, and CHIF)
The Department of Local Affairs, Division of Housing (DOH) is excited to announce this special Request for Applications (RFA) for Project Basing Housing Choice Vouchers (PBV), Private Activity Bonds (PAB) and Colorado Housing Investment Funds (CHIF).
The intent of this RFA is to stimulate the PAB market in Colorado and create supportive housing for people with special needs. To achieve these two distinct goals, DOH is encouraging applications for any combination of these three sources, with or without gap funding from DOH's traditional sources.Housing Colorado together with the Division of Housing is pleased to offer a FREE informational webinar
for anyone interested in learning more about this grant opportunity and the award process.

Alison George from the Division of Housing will be available to share information and answer questions. FREE Informational Webinar
Thursday, September 27th
10:30 to 11:30 AM
FREE to Housing Colorado Members and Non-MembersREGISTER NOW
To register, please complete the form found here:

Deadline to register is 5:00 pm on Monday, Sept. 24.

We look forward to having you join us!

Economic slowdown in Colorado?

The Denver Business Journal reports:

A report released Tuesday by Brookings Mountain West reveals just how much the economic recovery has stalled in Colorado.

Brookings Mountain West said that “slackening recoveries” knocked the Denver area and Colorado Springs down the rankings in the second quarter.

 Out of the country’s 100 largest metro areas, the recovery performance of Denver-Aurora-Broomfield region ranked 40th, down from No. 27 in the first quarter. 

Readers of this blog may remember that the Philly Fed's index of economic growth for each state has also shown Colorado lagging the nation in recent months. See here. The growth rate has also been declining over recent months. Demographic issues have been helping real estate demand and sales, but the data from the Philly Fed and Brookings suggest that overall economic growth may be slowing.

Housing starts in U.S. West up 25 percent during August

Housing starts in the West Census region of the US, which includes Colorado, were up 25 percent from August 2011 to August 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 five-year high for August and there were approximately 16,800 housing units of all types started in the West during August 2012. Of the new units started, 11,000 were single-family structures and 5,800 were structures containing more than one housing unit.

Nationally, housing starts rose 28 percent during the same period, with total housing starts rising to a total of 69,900.

Total housing starts remain well below peak levels both nationally and in the West. August 2012 housing starts in the West were 69 percent below the peak reached during May 2004. Nationally, August 2012 was 64 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 77 percent below peak levels while multifamily starts are only 42 percent below peak levels.

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. The broad trend shows multifamily totals approaching pre-recession peaks.

The second graph shows month-by-month comparisons in housing starts for each year in the West. August's housing starts total was down 6.6 percent from July but were at a 4-year high. That is, August 2012 was the biggest August for total starts since 2008.

August 2012's multifamily starts were at the highest August total seen in five years There were 5,800 multifamily starts during August 2012 which is the highest August total since August 2007.

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 approximately 150 percent so far this year compared to last year.

Buildfax: Remodeling activity in U.S. West up 9 percent

According to the latest Buildfax remodeling index:

Regional Residential Remodeling

Seasonally-adjusted annual rates of remodeling across the country in July 2012 are estimated as follows: Northeast, 765,000 (up 11% from June and up 31% from July 2011); South, 1,420,000 (up 24% from June and up 29% from July 2011); Midwest, 507,000 (down 4% from June and up 1% from July 2011); West, 846,000 (up 2% from June and up 9% from July 2011).

"Remodeling activity rebounded in July after a slower June, and residential remodeling activity in 2012 remains significantly above what we saw in 2011," said Joe Emison, Vice President of Research and Development at BuildFax. 

Realtors: Metro Denver median price hits all time high, while Springs, statewide median prices also rise

Median home prices for single-family homes during August 2012 were up in metro Denver, the Pikes Peak region, and statewide.  According to median home price data for August, released by the Colorado Association of Realtors, the median home price for single-family homes in the Denver area was $264,627 during August, which is an increase of 10.6 percent from August of 2011. It is also an all-time high median price for single-family homes in the region. Statewide, the median home price was $212,991 during August, an increase of 14.1 percent from the same month last year. The median price in the Pikes Peak region rose 10.3 percent, year over year, rising to $211,509 during August. (The values presented here are 3-month moving averages for each month, so August's median prices are averages of June, July, and August prices.)

This article discusses single-family median home prices only.

The first graph shows the median single-family home price for the state and for the metro Denver and Pikes Peak regions. Median home prices fell dramatically in all three measures following the financial crisis of late 2008, but moved back up quickly by mid-2009. In recent months, prices have begun to move upward at a significant pace. 

The metro Denver area has now surpassed peak levels reached during August of 2007, and is up by 2 percent.  However, the statewide median price is now 11.5 percent below its August 2008 peak. The Pikes Peak median price rose in August to 14 percent below its July '05 peak.

The second graph shows that year over year changes in the median prices have been positive in all three regions for the past four months. These changes have been a bit larger than was the case in the Case-Shiller and Corelogic home price indices. The Case-Shiller and Corelogic indices, for example have shown year-over-year increases in prices ranging from 4 percent to 7 percent in recent months. See here for more.

After numerous increases in home sales activity during late 2011 and early 2012, home prices finally began to show significant positive change in response by the Spring of 2012. Demand also continues to be helped by low interest rates and by ongoing Federal Reserve actions to increase liquidity in home lending, as with QE3. This increases the money supply however, which will impact general prices, and thus disposable income, for prospective home buyers in the future.

The home price data provided by the Colorado Association of Realtors is based on home sales transactions that are listed in the MLS systems for each area and do not include for-sale-by-owner transactions or new homes sold directly by home builders.

Tuesday, September 18, 2012

Single-family home sales activity hits four-year high in August

Note: CAR updates their home sales data irregularly. They added new sales data today, so I have updated the sales analysis for the second time in a week:

The home sales total for metro Denver for August 2012 was up 16 percent from August 2011, and 2012 continues to look like the most active year for home sales since 2008. August's sales total, which is a 3-month moving average for sales totals provided by the Colorado Association of Realtors, was at  3,809 sales during August 2012. There were 3,268 sales during August 2011. This is fairly similar to August 2008's total of 3,921.

This article examines single-family homes only.

The first graph shows the 3-month moving average for each month. August's total continues a trend in which 2012 is experiencing some of the highest sales totals reported in four years. 

Looking at the broader trend, we do find that home sales activity has been up in recent months. In the 12-month moving average, which removes the monthly seasonal issues, we see that there have been eleven months in a row of year-over-year increases, with August 2012 up 14 percent from August 2011. Sales totals in the 12-month average are still down from where they were during 2005 and 2006, but they have come up about 19 percent from the sales nadir reached during May 2011.

We see a similar trend statewide in home sales, where the home sales total (3-month average) has been up, year over year, for each of the past fourteen months and statewide, sales activity is also at a four-year high with the most sales overall since 2008. August sales were up 14 percent over August 2011 with 6,721 sales in the state. There were 5,887 sales during August of last year.

We also see an overall building trend of more sales activity at the statewide level in the 12-month moving average. The 12-month average has been up year over year for the past eleven months, and reached a growth rate of 13 percent during August 2012, which continues a growth trend that surpasses that which was in place before the financial crisis of 2008.

The Colorado Springs area is also showing signs of growth, although at a smaller pace. The home sales total for August 2012 was up 8.5 percent over August 2011 and has increased year over year for thirteen months in a row. However, 2012 sales activity in the Colorado Springs area is only at a three-year high compared to the four-year high in the metro Denver area.

The year-over-year increase in the 12-mo average was at 9 percent during August and thus was considerably smaller than the growth rates reported in the metro Denver area, and recent growth also fails to match that which was seen during the period of the homebuyer tax credit in 2009 and 2010. 

The pikes peak area continues to show a more shaky housing recovery than many parts of the state, and this is likely due to softness in employment in the Colorado Springs area.

Overall, demand for home sales continues to build, spurred by low interest rates and easy money policies such as the recently-announced third round of quantitative easing.

Condo median prices up again in August with five months in a row of growth

The median price for condos and townhomes in the metro Denver area increased 17 percent, year over year, in August 2012. According to home price information for condos and townhomes, released by the Colorado Association of Realtors, the median price in the region rose to $148,687 from August 2011's median price of $126,865. Statewide, the median price also rose 17 percent, rising from August 2011's price of $129,329 to August 2012's price of $151,848. In the Pikes Peak region, the median price rose only 0.5 percent to $132,361 during August, rising from August 2011's price of $132,285. (The monthly median prices discussed in this article are 3-month moving averages.)

As can be seen in the first graph, the larger trend is one in which condo prices continue to be down from peak levels reached back in 2006. Unlike single-family prices which quickly fell in 2009 and then immediately rebounded somewhat, condo prices have seen a long slide over the past several years and have only recently begun to move up again. The largest decline is seen in the statewide condo prices, and this is likely due to large dropoffs in prices for condo found in several mountain communities.However, we seen fairly large increases in  statewide the median prices since May 2012. 

As expected, the data shows that prices in condos and townhomes are significantly lower than single-family home prices.  In recent months, the statewide median price had fallen below that found in both metro Denver and in the Pikes Peak region, but surged in March and April and remains above the other regions. 

The second graph shows year over year changes in median home prices for condos and townhomes. August 2012 was the fifth month in a row to experience year-over-year increases in the median condo price. Growth has been weaker in the pikes peak region than in metro Denver or statewide, although all three regions have begun to show the most sustained growth trend experienced since before the 2008 financial crisis. As noted in the article on condo sales closings, low interest rates are having a significant impact on overall demand, and this demand would be impacted by any substantial increase in rates.