Thursday, January 10, 2013

Pueblo Snapshot: Single-family housing and foreclosures

The Pueblo area has shown a less robust market in homeownership and home sales than the metro Denver area, and the state overall, in recent years. Home prices, foreclosures, and releases of deeds of trust, while suggesting recent increases in demand for purchase housing, also show that the region is behind the metro Denver area in home price growth and other variables.

Pueblo home prices were down year over year during the third quarter of 2012, and have been down year over year in every quarter since the fourth quarter of 2010.

The first graph shows the FHFA's home price  index for both Pueblo and the metro Denver area. According to the index, home prices in the Pueblo area are still heading down , and the overall trend has been downward since the second quarter of 2007.

The second graph shows the year-over-year change in the index. While the home price index has increased year over year for the past three quarters in metro Denver, they have continued to move down in Pueblo.  The index decreased 1.4 percent, year over year, in the Pueblo area during the third quarter. During the same period, the home price index increased 2.8 percent in metro Denver. However, the third quarter's decline in the home price index for Pueblo was one of the smallest declines reported since 2007. 

The third graph shows foreclosure auction sales in Pueblo County and in all metro counties combined. Auction sales are the step in the foreclosure process when the home is sold off to investors or back to the bank. Since 2010, the combined total has declined significantly, but the Pueblo trend has generally been flat. For 2012, foreclosure sales have varied substantially from month to month, but do not show a significant decline from 2011.  For the first 11 months of 2012, there were 736 foreclosure sales in Pueblo county, which was an increase of 2.9 percent over the 715 that occurred during the same period of 2011. 

The fourth graph shows new foreclosure filings for both the combined metro total and Pueblo County. Foreclosure filings are the first step of the foreclosure process and are an indicator of future foreclosure auction sales activity. Since 2009, foreclosure filings have declined in both the combined total and in Pueblo County, but they have not fallen as much in Pueblo County as in the combined metro total.  For January-November of this year, foreclosure filings were down year over year by 6.5 percent in  the combined metro total, compared to the same period last year. Filings were down by 5.1 percent over the same period in Pueblo County. 

The fifth graph shows new releases of deeds of trust in Colorado and in Pueblo County. Since 2000, Pueblo County has shown less release activity than the state overall. (Releases occur when a mortgage loan is paid off, and is an indicator of refi and home sales activity.) Overall release activity has not grown nearly as much in Pueblo as in the state overall over the past decade. As the index shows, both the state and Pueblo county were still below year 2000 totals as of 2011, although by year's end, the statewide total may return to 2000 levels. There were During 2000, there were 12,934 releases of deeds of trust in Pueblo County, and there were 2,686 during 2012, up through September. by the end of the year, 2012 will likely exceed 2011 totals, but still be well below 2000 levels. 

And if we look at release activity since 2008, We find that Pueblo County has not experienced as much release activity as the state overall. In other words, since 2008, Pueblo County has not seen as much refi and home sales activity as the state overall. Growth in release activity in Pueblo county has consistently been below statewide levels since 2009, and Pueblo releases have not returned to 2008 levels although statewide releases exceeded 2008 levels during the first and third quarters of this year. There were 2,265 releases in Pueblo county during the first quarter of 2008, and there were 1,676 during the third quarter of this year. 

Although home prices and foreclosures appear to have stalled in the Pueblo region, single-family unit production nevertheless is showing some signs of growth. From November 2011 to November 2012, single-family permits increased 82 percent, although the numbers were very small. There were 14 single-family permits issued for single-family units during November 2012. As the graph shows, single-family permits obviously remain down well below peak levels. Specifically, they were still down 88 percent from peak levels during November.