Friday, November 30, 2012

NAR: Existing home sales up by 10.1 percent in West

According to the National Association of Realtors, existing home sales were up 10.1 percent from October 2011 to October 2012 in the U.S. West region, which includes Colorado (not seasonally adjusted). The most recent report, released this week  also shows all other regions posting increases in year-over-year home sales as well.

Meanwhile, the sales price of existing homes in the West region rose 15.9 percent, year over year, to $290,000 (not seasonally adjusted). All other regions also posted increases in the sales price.

See full release and data here.

BLS: Unemployment in Grand Jct, Pueblo, Colo. Springs above nat'l rate

The BLS released its report today on October unemployment in 372 metro areas in the US. The data for Colorado is not different from the statewide report already released by the Colorado Department of Labor and Employment. See here for statewide October totals.

Nevertheless, the report does provide some comparisons with other metro areas in the nation. The map on the last page of the report shows that among the metro areas in Colorado, Greeley, Grand Junction, Pueblo, Colorado Springs and Grand Junction have unemployment rates (not seasonally adjusted) above the national rate of 7.6 percent (not seasonally adjusted).  The situation is unchanged from September. During October 2012, Denver Boulder, metro Denver and the Ft. Collins-Loveland area had unemployment rates below the national rate.

The map shows how most metro areas are now above the national unemployment rate.

The map:

Statewide, Colorado's unemployment rate (not seasonally adjusted), at 7.5 percent is slightly above the national rate of 7.4 percent during October, but Colorado's rate has generally been below the national rate since 2005.

The Boulder and Fort Collins areas have posted lower unemployment rates than the nation for quite some time. Denver has dropped below the national rate in recent months.

National comparisons remain important insofar as perceptions of the local job market drive household creation in Colorado. As long as Colorado is perceived as being a better job market than many metro areas in the nation, such a perceptions will foster household creation and population growth in the state. In recent months, however, a disparity has grown between two parts of the state. The unemployment rates in Larimer County and in Metro Denver and Boulder have remained relatively low, while rates have been considerably higher in southern and western Colorado. See the housing snapshot archives for details.

According to today's BLS report:

Unemployment rates were lower in October than a year earlier in 329 of the 372 metropolitan areas,  higher in 37 areas, and unchanged in 6 areas, the U.S. Bureau of Labor Statistics reported today. Three  areas recorded jobless rates of at least 15.0 percent, while 41 areas registered rates of less than 5.0  percent. Two hundred eighty-eight metropolitan areas reported over-the-year increases in nonfarm  payroll employment, 80 reported decreases, and 4 had no change. The national unemployment rate in October was 7.5 percent, not seasonally adjusted, down from 8.5 percent a year earlier.

Thursday, November 29, 2012

Housing starts hit 5-year high in West region

Housing starts in the West Census region of the US, which includes Colorado, were up 80.1 percent from October 2011 to October 2012, counting both single-family and multi-family units. According to new housing construction and housing starts data released last week by the US Census Bureau, both single-family and multi-family housing starts in the U.S. West region were at a five-year high for October and there were approximately 19,100 housing units of all types started in the West during October 2012. Of the new units started, 11,800 were single-family structures and 7,300 were structures containing more than one housing unit. 

Nationally, housing starts rose 46 percent during the same period, with total housing starts rising to a total of 77,900.

Total housing starts remain well below peak levels both nationally and in the West. October 2012 housing starts in the West were 65 percent below the peak reached during May 2004. Nationally, October 2012 was 60 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 were 77 percent below peak levels while multifamily starts were only 35 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 while single-family starts continue to be down significantly, multifamily starts are quickly returning to levels that were common during the past decade. Since 2001, the monthly average for multifamily starts has been 5,600 starts. with a total of 7,300 starts for October, the West region was above average, and this combined with October hitting a five-year high for the month, the data confirms that multifamily starts totals are robust by the standards of the past decade. 

The second graph shows October's multifamily starts total compared to all other Octobers since 2004. Four of the past five months have all shown multifamily starts totals that were five-month highs. 

The third graph shows all starts in the region, and these were at a five year high for October.

Wednesday, November 28, 2012

Zillow: Home values increase in all Colorado metro areas

According to to most recent Zillow Home Values report, home values as measured by the Zillow Home Value Index,were up from October 2011 to October 2012 in all Colorado metro areas including Denver, Colorado Springs, Ft. Collins, Greeley, Grand Junction, Boulder and Pueblo metros.

Home values in the United States were up in October, increasing 4.7 percent from October 2011 to October 2012.

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

Change from October 2011 to October 2012 (in %):
Colorado statewide: +6.6
Boulder +4.6
Colo Springs +3.5
Denver metro +10.4
Ft. Collins +5.5
Grand Junct +3.8
Greeley +6.3
Pueblo +2.2

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

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

Colorado 212,400
Boulder 316,000
Colo Springs 187,700
Denver metro 224,700
Ft. Collins 226,600
Grand Junct.163,300
Greeley 165,200
Pueblo 104,000

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. Metro Denver, Boulder and the Ft. Collins area are all now back to, or very near to, previous peak levels

See the home price archive for comparisons with other indices.

Zillow home valuations, known as the median "Zestimate valuation" should be taken with a grain of salt (like all home price indices in which the method is not spelled out) but in this case they do appear to be in line with other home price indices and trends.

First-time unemployment claims down 7 percent in Colorado during 2012

Mass layoff events fell 3.5 percent to 82 events during the first ten months of 2012 in Colorado. There were 85 mass layoff events during the same period last year. According to the October report released last week by the U.S. Bureau of Labor Statistics, there were 11 mass layoff events during October 2012 alone, which was up 10 percent from the 10 events reported during October of last year. Comparing the first ten months of each year, both total mass layoffs and first time unemployment have decreased each year since 2009.

The first graph shows that monthly mass layoff events grew rapidly after October 2008 in Colorado, and have gradually declined since.

Nationally, mass layoff events increased 3.7 percent from 1,101 during October 2011 to 1,142 during October of this year.

In the year-to-date total for October in Colorado, mass layoffs have now fallen three years in a row after peaking at 150 mass layoffs during the first ten months of 2009. The second graph shows year-to-date totals for October since 2002:

Mass layoffs were rare from 2004 through most of 2008.

Overall, the most recent mass layoffs data suggests that the employment situation continues to stabilize. New layoffs continue to lessen, but as we've seen in the most recent employment data for Colorado, job growth continues to disappoint and total employment totals remain well below 2008's peak totals.

New jobless claims

New claims for unemployment insurance in Colorado rose year over year in by 9.6 percent to 957 during October 2012. There were 873 new claims during October of last year. Nationally, new claims for unemployment insurance were also up year over year, rising by 13.3 percent from October 2011 to October 2012. The third graph shows no obvious trend in recent months.

In year-to-date totals for new unemployment claims through October, totals are down 7.1 percent year over year in Colorado. There were 7,893 new claims during the first ten months of 2012, compared to 8,499 new claims during the same period last year. In the year-to-date total for October, new claims for unemployment insurance have now fallen three years in a row after peaking at 13,419 claims during the first ten months of 2009. The last graph shows year-to-date totals for October since 2002:

Initial claimant. A person who files any notice of unemployment to initiate a request either for a determination of entitlement to and eligibility for compensation, or for a  subsequent period of unemployment within a benefit year or  period of eligibility. 
Mass layoff event. Fifty or more initial claims for unemployment insurance benefits filed against an employer during a 5-week period, regardless of duration.

Tuesday, November 27, 2012

Case-Shiller: Denver home prices increase at highest rate since November 2001

Case-Shiller released its home price index for September 2012 today. The home price index for the Denver area rose 0.4 percent percent from August to September, and rose 6.8 percent, year over year, from September 2011 to September 2012.  The year-over-year increase in September was the ninth year-over-year increase in a row for Denver, and was the largest increase since November 2001, when the year-over-year growth rate was 7.6 percent.  The first graph shows the index values since 2001. The index value is at the highest value seen since October 2007.

 According to S and P's press release, home prices nationwide continued to show some signs of growth:

"We are entering the seasonally weak part of the year.  The headline figures, which are not seasonally  adjusted, showed five cities with lower prices in September versus only one in August; in the seasonally  adjusted data the pattern was reversed: one city fell in September versus two in August. Despite the seasons,  housing continues to improve." 

"Phoenix continues to lead the recovery with a +20.4% annual growth rate. Atlanta has finally reversed 26  months of annual declines with a +0.1% annual rate as observed in September’s housing data. At the other  end of the spectrum, Chicago and New York were the only two cities to post annual declines of 1.5% and  2.3% respectively and were also down 0.6% and 0.1% month-over-month."
In year-over-year comparisons for September, two out of 20 cities showed year-over-year declines in the home price index.  New York showed the largest drop, with a decline of 2.3 percent, while the index in Chicago fell 1.5 percent. Denver was among the eighteen cities reporting increases, and had the sixth-largest increase of the twenty cities. Only Detroit, Phoenix, Miami, San Francisco 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 29 percent since it peaked in July 2006, but the Denver index is down only 4.8 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 September was positive for the fourth month in a row.

In short: Denver metro home prices have shown a stronger growth trend in recent months 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. We must go back to November 2001 to find a larger year-over-year growth rate.

Unemployment up in Colo. Springs and Pueblo, down in other metros

Total employment growth in Colorado in October continued to show slight growth statewide in the year-over-year comparisons. In Colorado, total employment in Colorado was down 91,000 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 October 2012 are:
Colorado Springs, 8.8%
Denver-Aurora, 7.4%
Fort Collins-Loveland, 5.9%
Grand Junction, 8.3%
Greeley, 8.1%
Pueblo, 10.1%
Statewide, 7.5%

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 8.6 percent to 8.1 percent, year over year. 

The unemployment rate decreased in all metro areas except Colorado Springs and Pueblo where the unemployment rates increased from 8.7 percent to 8.8 percent in Colorado Springs, and 9.7 percent to 10.1 percent in Pueblo, year over year. 

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 September 2012 employment totals: 

Colorado Springs MSA, 8.0%
Denver-Aurora MSA, 2.8%
Fort Collins-Loveland MSA, 0.4%
Grand Junction MSA, 7.6%
Greeley MSA 0.6%
Pueblo MSA, 0.2%
Statewide, 3.4%

All things being equal, the areas further below the peak have recovered the least from initial job losses. The noticeable exception is Pueblo where total employment is nearly back to peak levels, but the unemployment rate is being kept up by a growing labor force that is unable to find employment. Most other regions are experiencing very little growth in labor force, or even declines. See here for more on Pueblo. 

For the second 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 October 2012, the rate in the Boulder-Longmont area was 5.7%.)

Monday, November 26, 2012

Buildfax: Remodeling activity falls in West region

According to Buildfax, remodeling activity during September 2012 was down 10 percent from September 2011 in the U.S. West region. Data is based on counts of remodels authorized by building permits in the U.S.

According to the press release:
Seasonally-adjusted annual rates of remodeling across the country in September 2012 are estimated as follows: Northeast, 647,000 (down 17% from August and down 3% from September 2011); South, 1,121,000 (down 12% from August and up 12% from September 2011); Midwest, 474,000 (down 12% from August and down 24% from September 2011); West, 727,000 (down 10% from August and down 10% from September 2011).

Job growth continues in Colorado at slow pace

The non-seasonally-adjusted unemployment rate fell year-over-year from 7.7 percent to 7.5 percent during October 2012. According to the most recent employment data, collected through the Household Survey and released last week by the Colorado Department of Labor and Employment and the BLS, the labor force grew only slightly over the year, rising by 3,100 workers from October 2011 to October 2012. This small increase in the labor force has helped to bring down the unemployment rate since the labor force grew more slowly than total employment.  During October 2012, the labor force consisted of 2.74 million workers, which means unemployment for the month totaled approximately 206,000 persons.

Total employment in Colorado rose to 2.54 million employed persons during October, rising 9,100 above last year's October total.  According to the Household Survey employment totals, total employment remains approximately 91,000 employed persons below peak levels.

The first graph shows the unemployment rate (not seasonally adjusted):

The second graph shows total employment is up from levels seen during 2009 and 2010, and is down only slightly from September's employment total, which was the highest total reported since 2008. Total labor force is now back up near peak levels.

Total employment, according to the Household Survey, is now at levels reported during early 2007.

The third graph shows payroll employment collected through the Establishment Survey of employment, and shows the year-over-year change in payroll employment in Colorado. Year-over-year growth has usually been under 2 percent since the last recession, and this is generally a smaller growth rate than what was common during the last expansion from 2003-2008.

According to the payroll survey, employment grew by 1.8 percent from October 2011 to October 2012.

The very large losses that occurred during 2009 and 2010 were the largest losses, by percentage, in at least 30 years. Job gains in recent years don't compare with the robust job gains seen during the boom years of the 1990s.

This report shows that job growth continues to be positive in Colorado, but that growth is not sufficient to really overcome deficits in total employment that have formed since 2008.

This jobs report shows no departure from jobs data that we've consistently seen over the past six months. Growth is positive, but not robust.

Friday, November 23, 2012

Zillow: 22 percent of Denver-area owner-occupant homes are underwater

According to new data posted last week by Zillow, 22.2 percent of owner-occupant homes in the Denver area have negative equity during the third quarter of 2012.

On average, that 22.2 percent of owners are underwater by 35 percent, or 69,500 dollars.

Nationwide, 28.2 percent of owner-occupants were underwater,  according to Zillow, and of that 28.2 percent, the owners were underwater by an average of 42.5 percent, or 73,100 dollars. In other words, Colorado's rate of negative equity is less than that of the nation overall, which is not surprising.

Within Colorado, the metropolitan counties with the highest rates of negative equity were Weld, Mesa, Pueblo and Adams. The counties with the lowest rates were Douglas, Jefferson, Broomfield, Boulder and Larimer.

As expected, the areas with the highest rates of underwater mortgages tend to be those counties that were hardest hit by foreclosures and large amounts of new home construction: Weld, Adams and Pueblo. Weld county, is still experiencing high foreclosure rates, which will drive up negative equity rates. Counties with in-demand mountain property and low unemployment rates show lower rates of negative equity.

See here for interactive maps.

Delinquency Survey: Colorado 10th-best for delinquent loans

30-day delinquencies during the third quarter of 2012 were up slightly form the third quarter of 2011.   According to the National Delinquency Survey, released last week by the Mortgage Bankers Association, Colorado's 30-day delinquency rate rose from 2.39 percent during the third quarter of 2011 to 2.44 percent during the third quarter of this year. The third-quarter 30-day delinquency rate remained down from the peak years of 2009 and 2010.

The first graph shows 30-day delinquencies by quarter in Colorado since 2006. The 30-day delinquency rate increased from the second quarter's delinquency rate of 2.38 percent, although 30-day delinquencies often increase form the second quarter to the third quarter due to seasonal factors.

The number of loans that were 90 days delinquent of more were also down in Colorado, falling to 1.76 percent of all loans surveyed during the third quarter. The 90-day delinquency rate during the third quarter of last year was 2.12 percent, and it was 1.87 percent during the second quarter of this year. The second graph shows the percentage of mortgage loans that were at least 90 days delinquent during the third quarter. The 90-day delinquency rate has been falling consistently since the fourth quarter of 2009.

The foreclosure inventory also fell during the third quarter and has fallen for the past eight quarters in a row. Colorado's foreclosure inventory dropped to 1.66 percent during the third quarter of this year, falling from last year's third quarter rate of 2.1 percent. The inventory was also down from this year's second -quarter rate of 1.9 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 third quarter of this year was 2.96 percent, and it was 3.46 percent during the third quarter of last year.

The U.S. foreclosure inventory rate was 4.07 percent during the third quarter of this year and it was 4.43 percent during the third 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 third quarter was 3.43 percent, and it was 3.46 percent during the third 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 third quarter of 2012. The only states with lower 90-day delinquency rates were Vermont, Iowa, Minnesota, 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 0.77 percent, and the highest rate was found in Nevada where it was 5.98 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.

October CPI: Annual growth in CPI rises for third month

The Bureau of Labor Statistics released last week the October CPI for US urban areas and regions. In the Mountain-Plains region, from October 2011 to October 2012, the CPI increased 2.5 percent, rising from September's year-over-year change of 2.2 percent.

In the first graph, we see that the year-over-year change in October for the Mountain-Plains CPI was down from October 2011's change of 3.3 percent, and was also down from 2008's pre-recession annual change of 3.3 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 2.1 percent. (Front Range-specific price data, however, would likely show greater increases in home prices, given recent increases in rents and home prices in Colorado.)

Apparel prices continued to grow and were up, year over year, by 4.6 percent and transportation prices were up by 4.7 percent, year over year. Medical care prices were up by 3.6 percent.

The Eurozone recently slipped into recession showing ongoing moderation in global demand for a variety of goods. This has helped keep CPI down, although October 2012 was the third month in a row to show a year over year increase in CPI.

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, but has been near 2 percent in recent months.

The CPI change from September 2012 to October 2012 was up 0.4 percent.

Over the past ten years (comparing June 2003 to June 2012), the CPI has risen 24.9 percent. In other words, a dollar today buys about 75 percent of what it did in 2003.

Wednesday, November 21, 2012

Housing News Digest, November 21

House Prices Are Nowhere Near A Bottom Says Analyst In recent months, most economists have come to believe that U.S. house prices have finally bottomed after a horrible five years of declines. Most of the major house-price indices, including the monthly Case-Shiller report, have turned higher. And yesterday's Existing Home Sales report showed an increase in the median house price of a startling and encouraging 11% year over year.

  Premier Resort in Snowmass, Colorado Re-Opens as a Westin Following Multi-Million Dollar RenovationStarwood Hotels & Resorts Worldwide, Inc. (NYS: HOT) today announced the opening of The Westin Snowmass Resort following an extensive, multi-million dollar renovation to reposition the prestigious, slope-side property as a Westin. Formerly known as the Silvertree Hotel & Conference Center, the resort fully refurbished all guest rooms and public areas in order to implement the full suite of Westin signature amenities, designed to rejuvenate and inspire wellbeing. Owned by a joint venture between Starwood Capital Group and Wasserman Real Estate, The Westin Snowmass Resort is ideally situated in the heart of Snowmass Village, adjacent to the slopes of Snowmass - one of Colorado's most sought-after ski mountains.

  Morgan County Realtors closely watching federal, state legislation The National Association of Realtors is keeping an eye on federal legislation, particularly on mortgage interest deductions. Some good news is that the Colorado real estate market is improving better than the rest of the nation. At a recent Colorado Association of Realtors conference, Fort Morgan Realtor Brian Urdiales heard that in the recent past home buyers have not had to pay certain taxes, but that might change. Further, people might have to pay taxes on a short sale.

  Real Capital Solutions acquires Tanager Meadows apartments in Springs Real Capital Solutions, a Colorado-based investment and property management company, has acquired the Tanager Meadows apartment complex in Colorado Springs from national real estate investment adviser Lowe Enterprises Investors.

  IBC Holdings purchases large building that houses Avaya “Additionally, we are considering adding a multifamily component and additional industrial buildings with frontage on Huron and Pecos streets at some point in the future.” Basking Ridge, N.J.-based Avaya employs several hundred people in the metro area at facilities in Westminster and Highlands Ranch.

Thursday, November 15, 2012

Housing News Digest, November 15

FHA Nears Need for Taxpayer Funds The Federal Housing Administration is expected to report later this week that it could exhaust its reserves because of rising mortgage delinquencies ... That could result in the agency needing to draw on taxpayer funding for the first time in its 78-year history.

  Colorado 3Q apartment vacancy at 11-year-low, rents at record high Colorado apartment vacancy fell to an 11-year low in the third quarter of 2012, declining statewide while average rents reached all-time highs. A Colorado Division of Housing report released Thursday shows the combined vacancy rate for Colorado was 4.6 percent during the third quarter, compared to 5 percent in the third quarter of 2011. The recent report reflects the lowest vacancy rate recorded since the first quarter of 2001.

  Firestone rezones for apartments FIRESTONE -- Firestone took its first steps Wednesday toward getting a new apartment complex, the first new multi-family housing in the town since 2003. The Booth Farm development, planned for the northeast corner of Colorado Boulevard and Booth Drive, could start construction by late spring. Its first phase would have 201 apartments; Phase 2 would add another 90. The plans also call for a day care center on the site.

  Apartments planned for South Nevada Ave. Plans are afoot to replace aging storefronts along the 400-block of South Nevada Avenue with a mixed-use development of apartments and retail. Bob and Karen Elliott, through their company, Downtown Development Group, bought four lots, 408, 410, 412 and 414 S. Nevada Ave. during the El Paso County Public Trustee’s foreclosure auction Oct. 31.

Vacancy rate falls below 3% in Fort Collins, Loveland Multi-family vacancy rates have fallen even lower in Fort Collins and Loveland and remain just above 3 percent in Greeley. The latest data from the Colorado Division of Housing shows that the vacancy rate in the Fort Collins-Loveland market area fell to 2.1 percent in the third quarter, compared with 2.3 percent a year ago, and 3.5 percent in the previous quarter.

Colorado apartment vacancy rate falls to 4.6 percent, rent grows across Front Range

The vacancy rate in Colorado apartments was down during the third quarter of 2012, falling year over year statewide and in Colorado Springs, Metro Denver, Grand Junction, and in the Ft. Collins-Loveland area. According to a report released Thursday by the Colorado Division of Housing, the combined vacancy rate for Colorado was 4.6 percent during the third quarter. The vacancy rate during the third quarter was down from 2011’s third-quarter rate of 5.0 percent, and was the lowest vacancy rate recorded since the first quarter of 2001.

Demand for rental units continued at high levels in Colorado during the third quarter, and demand was especially strong in northern Colorado. The vacancy rate fell year over year from 2.2 percent to 2.1 percent in the Ft. Collins-Loveland area for the third quarter, although it rose from 1.8 percent to 3.1 percent in Greeley over the same period.

A vacancy rate below five percent is generally regarded by industry observers as a sign of a tight market.

The vacancy rate also fell below five percent in Grand Junction where it dropped year over year from 7.7 percent to 3.8 percent during the third quarter.

The metro Denver vacancy rate during 2012’s third quarter, released last month in a separate survey, fell year over year from 4.9 percent to 4.3 percent.

“Northern Colorado vacancies are at the low levels we saw back in the late nineties,” 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. “The strong employment in the region is helping drive that, and statewide, a lack of new construction is also an important factor.”

Rents headed up as vacancy rates declined. The statewide average rent in Colorado increased 5.1 percent from 2011’s third quarter to 2012’s third quarter, rising from $898 to $944, which is an all-time high. Across the state, the average rent increased in all metro areas except Grand Junction. The average rent in the Ft. Collins-Loveland area, for example, increased 7.3 percent, year over year, while the average rent in Pueblo grew 8.4 percent. During the same period, the average rent in Colorado Springs increased only 1.1, although it reached a new all-time high during the third quarter. The average rent fell 2.6 percent in Grand Junction, year over year.

“This is the second quarter in a row in which the average rent grew all along the Front Range, and by fairly sizable amounts in most cases,”said Ryan McMaken, an economist with the Colorado Division of Housing. “Demand is strong enough to the point that even in markets where unemployment is still above eight percent, as in Pueblo and Colorado Springs, landlords were still able raise rents.”

Average rents in all metropolitan areas measured were Colorado Springs; $787, Ft. Collins/Loveland, $1024; Grand Junction, $638; Greeley, $693; Pueblo, $587.

The metro Denver average rent, measured in a separate survey, was $986 during the third quarter.

Tuesday, November 13, 2012

Foreclosure auction sales in metro counties down 24 percent this year

The monthly foreclosure report for all metro counties through September is now available. See here for all graphs and tables. 


Foreclosure auction sales were down year over year to the lowest levels reported during September in six years, while foreclosure filings during September 2012 were also down year over year.

Comparing year-over-year from 2011 to 2012, foreclosure filings in September fell 34.7 percent with totals falling from 2,429 to 1,585.

September 2012 foreclosure sales (completed foreclosures) were down compared to September 2011 with a decrease of 4.5 percent from 1,124 to 1,073.

During the first nine months of the year (Jan-September), foreclosure filings were down 1.0 percent from 19,010 to 18,826 from 2011 to 2012. During the same period, foreclosure auction sales were down 23.9 percent from 12,626 to 9,614. 

Filings fell 30.7 percent from August 2012 to September 2012, and auction sales were down 20 percent over the same period.

Mesa County reported the highest foreclosure rate during September, while Boulder County reported the lowest rate. (See Table 7.)

FHFA: Home prices up 11.3 percent in Rocky Mountain region during September

House prices in September in the Mountain region, which includes Colorado, were up substantially, rising 11.3 percent, year-over-year from September 2011 to September 2012. Nationally, the house price index rose 4.8 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 15.0 percent from the peak level reached in June 2007, while the Mountain region's index is down 23.7 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: September 2012 was the seventh month in a row in the mountain region 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. An 11 percent increase, however, is quite a bit higher than what we're seeing in other indices, such as the CoreLogic home price index which has recently been showing year-over-year increases of about 7 to 7.5 percent.

Bankruptcies fall to 3-year low in 2012

In Colorado during October, total bankruptcy cases filed fell 7.7 percent, year over year, to 2,277 cases. During October 2011, 2,469 cases were filed. October was the 21st 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:

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

In year-to-date totals from January through October, 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. Totals remain well above what they were during the days the of the dot-com boom, however.

Short sale transactions at 6.5 percent in Colorado

Here's some short sale and distressed sale data from economist Tom Lawler via Calculated Risk.

This data is pretty spotty data, but interesting. According to Lawler's aggregated data, short sales were 6.5 percent of sales in Colorado during September 2012. Which was up slightly from 6.1 percent during September 2011.

Note that Colorado's proportion of sales that are short sales is much lower than most other markets. I don't have enough info here to know if this is a data issue or if it's a fair comparison.

Colorado also appears to have a smaller share of distressed properties than most other markets, with a proportion of 18.7 during September 2012, which is down from 25.8 percent during September 2011.

This is just a snapshot of some data, although it would further reinforce the notion that Colorado, which  began dealing with foreclosures a few years before other markets (beginning in 2004) may be ahead of other markets in working through its foreclosure issues.

There will be no 'double dip' recession

One still occasionally hears discussion of the possibility of a "double dip recession." At this point, however, there is no reason to discuss the possibility of a double dip recession at all. The probability of a double dip is zero percent precisely because the last recession ended back during mid-2009. It is much too late for there to be a double dip recession. If we discover that we're in recession right now, it will simply be an entirely different one from the last one which lasted (officially) from December 2007-June 2009.

It has now been almost five years since the beginning of the last recession, and the "expansion" has been going on for more than three years. The realities of persistent unemployment, of course, challenge the definition of "expansion" somewhat, but a new recession at this point could simply be defined as a stand-alone recession following a period of lackluster economic growth.

These comments are not intended as any sort of forecast.

Investopedia, for example, refers to a double dip as two recessions separated by a short expansion period of less than one year. Forbes, on the other hand refers to a possible recession in the near future as a double dip.

A perfect example of a double dip would be the recessions of 1980 and 1981-82 which were separated by only 12 months.

The 1969-70 recession and the 1973-75 recession were separated by only three years, but few refer to those two as a double dip. We're already 3.5 years out from the last recession today.

Monday, November 12, 2012

BLS: Colorado's extended mass layoffs down in third quarter

The Bureau of Labor Statistics released quarterly data on extended mass layoffs and initial unemployment claims for the third quarter of 2012.

"Extended mass layoffs" are a little different from the mass layoffs that are reported on monthly by the BLS. Specifically, an extended mass layoff is "defined by the filing of 50 or more initial claims for unemployment insurance benefits from an employer during a 5-week period, with at least 50 workers separated for more than 30 days. Such layoffs involve both persons subject to recall and those who are terminated."

This quarterly report focuses a little bit more on permanent and longer-term separations while the monthly statistics track all separations regardless of duration.

The report also tracks initial claims for unemployment insurance associated with the extended mass layoffs.

In Colorado, the trend in both mass layoffs and in initial claims continues downward. As can be seen in the first graph, totals for both claims and layoffs are returning to levels commonly reported during the inter-recession period from 2004 to 2007. Extended mass layoffs during the third quarter of this year were near the lowest levels reported since 2008.

In the second graph, we see the year-over-year changes in initial unemployment claims for both the US and Colorado. During 2010 and most of 2011, the year-over-year change in new claims had consistently been down-year-over-year. This mirrors the recovery period of 2003 and 2004. Over the past year, however, initial claims have been more volatile and have lacked a clear short-term downward trend. In the multi-year trend however,  totals remain well down from 2009's highs.

There is no sign of the layoffs that were a sign of the recession of 2008-2009, but the recent up-and-down in  layoff activity suggests only a moderate, albeit continuing, recovery from the job losses of the most recent recession.

Overall this report offers few surprises. Layoffs and initial unemployment claims are down since 2009 and show slow but bumpy improvement trends.

Housing News Digest, November 12

Conservation easements: Regulators crack down on appraisers The Colorado Division of Real Estate is tightening the reins on appraisers blamed for abuses of the state’s conservation-easement program. Last week, an appraiser licensed by the state was recommended for a $3,000 fine and additional penalties including mandatory educational course work and up to a year of supervision for appraisal-law violations.

  Q&A with John Bissett: Homebuyers no longer on the sidelines Colorado Springs-area homebuilders are doing better in 2012 than at any time in the last five years. The pace of home construction so far this year is up 57.5 percent from the same period in 2011, and single-family building permits are on track to finish with their highest annual total since 2007. Barring sudden jolts to the economy or consumer confidence, some industry experts expect the market to continue its recovery in 2013 and beyond.

  Wood Partners Building Green Inspired M-F Complex in Colorado Wood Partners, a national multi-family developer, has started construction on Alta Harvest Station Apartments, a planned 297-unit gated community in Broomfield, Col., which it hopes will achieve a LEED Silver rating by the U.S. Green Building Council.

  Villa Arms Apts. Trade Hands for $2 Million Michael Stickel acquired the Villa Arms Apartments at 664 S. Lincoln St. in Denver from Norris Scott for $2 million or $100,000 per unit. The 20-unit, 11,364-square-foot multifamily building was built in 1967, renovated this year and is in the Colorado Boulevard/Interstate 25 submarket.

  Low vacancy rate attracts apartment builders BOULDER — Boulder’s hot market for apartments is making an impact downtown, with a new plan on the books for a project its developers say will be the first apartment building built downtown in 25 years. Element Properties, a Boulder-based developer and property-management company, and a group of undisclosed investors have purchased the land at 1707 Walnut St. for $2.875 million and plan to build a 20-unit luxury apartment building on the site

Both new hires and layoffs decline in U.S. West during September

The number of new hires in the U.S. West, which includes Colorado, fell 16.5 percent year over year from September 2011 to September 2012. Layoffs also fell, dropping 9.9 percent during the same period.

According to the latest Job Openings and Labor Turnover report (JOLTS), released last week by the U.S. Bureau of Labor Statistics, the West decline of 16.5 percent was larger than the nation overall which showed a smaller decline of  3.3 percent in new hires, when compared year over year. During the same period, layoffs fell 5.1 percent in the nation overall, compared to the West's drop of 9.9  percent.

September's year-over-year decline in new hires was the largest drop since 2010 when employers were still dealing with the effects of the 2008-2009 recession. 

The first graph shows the year-over-year change in new hires and in layoffs in the U.S. West region.

In the second graph, we see the total number of new hires compared with the total number of separations, including quits, layoffs and other separations.

Note that when total hires (the blue line) are above separations (the purple bar) then a positive net number of jobs have been added to the economy. September 2012 was the first month since January in which new hires have been fewer than separations in the West region.  Overall, 2012 has been similar to 2011 in the relationship between separations and hires, however, for the West region during September 2012, there were 11,000 fewer hires in the region than separations, which is considerably less than September 2011's difference of +44,000. 

The second graph shows that the current trend is similar to that of last year with similar patterns in net hiring over layoffs and separations. New taking the year as a whole, hires are up from 2009 and 2010 levels, but the trend is largely flat from 2011 to 2012. 

While not indicative of a significant worsening in the labor market, this data does not show and substantial gains either. While layoffs have fallen off, so have new hires. 

Note: The JOLTS employment data is tied to the Establishment Survey which does not cover small business hiring and self-employed persons.The BLS recent made some significant revisions to employment data at year-end 2011. This analysis reflects the new revised data

Corelogic: Home prices in Colorado up again in September

Corelogic's home price index for Colorado increased year over year for the ninth month in a row during September 2012, increasing to the highest growth rate seen since the beginning of the recession in 2008.

Colorado showed a 7.4 percent increase from September 2011 to September 2012. The September HPI report, released today by Corelogic, shows the national HPI rising by 5.0 percent, year over year. Ove rthe past three months, the year-over-year change in the HPI has flattened out, but remains at a robust growth rate at or above 7 percent. Continued inventory shortages and continued population growth are likely driving continued increases. An addition, in the short term, low interest rates and loose monetary policy are likely to continue pushing up home prices as  interest rates remain at historic lows.

Annual declines were common after 2009, although the trend in declines was interrupted briefly by the homebuyer tax credits which created some annual gains in the HPI in Colorado and nationally from late 2009 to mid-2010.

The annual increase in the Colorado HPI of 7.4 percent during September mirrors to a certain extent other home price indices, such as the Case-Shiller index and the FHFA's expanded house price index which have also showed continued positive home price gains in the region durign the past several months.

The CoreLogic HPI shows that, nationally, home prices have not increased as much as in Colorado, which was expected. Single-family home production in Colorado remains at some of the lowest levels seen in decades, and in the face of stable population growth, single-family home prices continue to climb.

In the September report, only 7 states reported larger year-over-year increases than Colorado. The states with the largest increases were Arizona and Idaho with increases of 18.7 percent and 13.1 percent, respectively. Nevada, Utah, Hawaii, North Dakota, and Montana also reported larger increases than Colorado.  Seven states showed declines in prices. The states with the largest declines in the home price index were Illinois and Rhode Island with drops of 2.3 percent and 3.5 percent, respectively.

LPS: Colorado 6th best in non-current mortgage loans during September

According to the September LPS Mortgage Monitor , released last week by Lender Processing Services, 11.3 percent of mortgage loans during September were "non-current" in the United States. That is, they were 90-plus-days delinquent or were in foreclosure.

In Colorado, the percentage of active mortgage loans that were non-current during September was 5.9 percent, which was down 9.4 percent from the same period last year.  Colorado's year-over-year decline in non-current loans was the 6th largest in the nation. Only Nevada, Michigan, California, Arizona, Minnesota, and North Dakota showed larger declines.

Only five states reported lower percentages of non-current loans than Colorado, making Colorado 6th-best in the nation for the percentage of its mortgage loans that were non-current during September 2012. Montana, Wyoming, South Dakota, Alaska and North Dakota reported lower percentages of non-current loans during September.

The states with the highest rates of non-current loans were Florida, Mississippi and New Jersey with non-current  rates of 20.8 percent, 17.7 percent and 16.4 percent, respectively.

According to LPS: "LPS Mortgage Monitor is an in-depth report of mortgage industry performance. The monthly report is based on data from the company’s market-leading repository of loan-level residential mortgage data and performance information, including more than 40 million active loans across the credit spectrum. This data is analyzed by LPS experts to produce more than 30 charts and graphs reflecting both trend and point-in-time performance observations."

Friday, November 9, 2012

Housing News Digest, November 9

Rent In Boulder Could Increase Due To City’s New Energy Efficiency Mandate BOULDER, Colo. (CBS4)- Renters in Boulder may already pay the highest rents in the Denver metro area and they may soon increase even more. Landlords blame increases on a new city program, called “Smart Regs,” forcing them to spend thousands of dollars to make their rentals more energy efficient.

  Hundreds seek help at Colorado Homeless Veterans Stand Down The number of men and women seeking help at the Homeless Veterans Stand Down on Thursday was up by more than 20 percent from last year, event organizers said. About 570 veterans — 100 more than last year — attended the stand down at the Colorado Army National Guard Armory, where they were offered services by 62 agencies that provided such items as food, medical care, clothing and housing.

  Denver firm buys two Springs apartment complexes for $7.4M A Denver firm has spent nearly $7.5 million to buy a pair of Colorado Springs apartment complexes, more evidence of a red-hot multi-family housing market in the Pikes Peak region. BMC Investments recently paid $4.2 million for the 148-unit Timberlane Apartments at 3985 E. Bijou St., southeast of Academy Boulevard and Platte Avenue, and $3.2 million for the 95-unit Ashelyn Court apartments at 930 N. Murray Blvd., southwest of Murray and Galley Road.

  Metro Denver home prices return to record highs with low inventories Fast-rising metro Denver home prices are back to their record highs of 2006, fueled by buyers competing for a limited number of properties. So far this year, single-family homes have sold for a median price of $250,000, matching the level they hit in 2006 before the market began to decline.

  Foreclosure sales fall locally, statewide An improved housing market is helping more homeowners in Colorado Springs and around the state avoid losing their properties after they’ve fallen into foreclosure, according to a Colorado Division of Housing report released Thursday. The number of distressed properties in Colorado that went through the state’s foreclosure process and were later sold at a Public Trustee’s auction fell nearly 24 percent during the first nine months of the year when compared with the same period in 2011, the third-quarter report showed.

  Boulder County, state foreclosure filings on pace for lowest year since 2006 Mirroring statistics being seen statewide, new foreclosure filings in Boulder County this year are declining at a rate that could make for the lowest year-end total since 2006, according to a report from the Boulder County Public Trustee. Third-quarter filings declined in the county by 10.1 percent over the same time last year. After seeing 732 new filings over the first nine months of 2011, there have been just 643 fillings over the first nine months of 2012, a 12.2 percent decrease, according to the trustee's report.

Thursday, November 8, 2012

Housing News Digest, November 8

Colorado house foreclosures heading in the right direction KUSA - The Division of Housing in Colorado just released its latest statistics. They indicate Colorado home foreclosures have dropped 24 percent in September 2012, compared to September 2011.

  Foreclosure sales in Colorado down 23.6 percent so far this year Colorado foreclosure sales fell 23.6 percent in the first three quarters of 2012 compared with the same period last year, the state Division of Housing reported. The decline suggests continued recovery in the Colorado real estate market with home sales and prices rising.

  Renting turns competitive in tight housing market Finding a home to rent in Fort Collins has practically turned into a competitive sport. Players must be prepared to move quickly, decisively and with determination. The super-tight housing market has some would-be renters feeling pressured to sign leases the same day they see places out of fear the apartment, condo or house they covet could be gone the next day.

  Data gathered for home sales throughout Colorado Homes for sale in La Plata County are priced higher and stay on the market longer than others in the region and the state, according to real estate data released this week. The report, released by the Colorado Association of Realtors, is the first-ever compilation of local real estate data from the entire state, said Don Ricedorff, a real estate broker with the Wells Group.

 From the AP:
DENVER (AP) - A Colorado Division of Housing official says it's getting easier to avoid foreclosure by using a short sale or a conventional sale because of the improving housing market. Ryan McMaken says foreclosure sales fell nearly 24% in the first three quarters of 2012, compared with the same period last year.

Foreclosure auction sales down 24 percent during 2012

New foreclosure auction sales were down 23.6 percent in Colorado through September of 2012 compared to the same period of 2011. According to a report released today by the Colorado Division of Housing, there were 4,138 foreclosure auction sales, or completed foreclosures, reported during the third quarter of 2012, compared to 4,627 during the third quarter of last year. Through September this year, there were 11,898 auction sales, and 15,565 auctions sales through September of last year.

New foreclosure filings fell slightly through September of this year, falling 2.2 percent from 2011 to 2012. Foreclosure filing totals for the third quarter alone this year were down 11.8 percent, falling to 7,076 from 2011’s third-quarter total of 8,061. Through September of this year, 22,920 new filings were reported which puts Colorado on pace to finish the year with the lowest foreclosure filings total since 2006. 23,438 new foreclosure filings were filed from January through September of last year.

“Completed foreclosures continue to head down at a steady pace,” said Ryan McMaken, economist for the Colorado Division of Housing. “As home sales and home prices, rise, it’s getting a little easier to avoid that final foreclosure sale through a short sale or even a conventional sale.”

Ten of the state’s twelve metropolitan counties reported year-over-year declines in the number of foreclosure auction sales occurring during the first nine months of the year. Auction sales declined 34.0 percent and 36.5 percent in Denver and Douglas counties, respectively. Pueblo County showed an increase of 3.4 percent year over year for the first nine months of the year.

Those counties that did experience year-over-year increases in auction sales this year were generally found outside the Front Range, and include several Western Slope and mountain counties such as Montezuma, Moffat, and Fremont counties.

Mountain counties were also found among the state’s counties with the highest foreclosure rates including Summit, Park and Grand counties. Boulder, meanwhile, reported the fifth-lowest foreclosure rate of all Colorado counties.

“Employment is now showing up as an important factor in driving down foreclosure rates in some areas,” McMaken said. “Boulder and Larimer counties, where the unemployment rates are among the best in the state, are seeing some of the biggest declines in foreclosures and foreclosure rates right now.”

Foreclosure sales are opened foreclosures that have proceeded through the full foreclosure process to final sale at public auction. Filings denote the beginning of the foreclosure process, and once a foreclosure is filed, the borrower has at least 110-120 days to work with the lender to avoid a completed foreclosure. It is during this period that borrowers work with lenders and housing counselors to work out loan modifications, short sales, or other ways of withdrawing the foreclosure.