Thursday, June 27, 2013

May employment gains rise to 18-month high in Colorado

Year-over-year gains in total employment in Colorado rose to an 18-month high during May 2013, according to new data from the Colorado Department of Labor and Employment. According to Household Survey data, the 3-month rolling average for new year-over-year jobs gains was 53,000 jobs, comparing May 2012 to May 2013.

53,000 was the largest year over year gain since January 2012 when more than 60,000 new jobs were added compared to the same month of the previous year.

The first graph shows year-over-year comparisons in total employment:



However, during the same period, new workers entered the labor force at an accelerating rate. New workers entering the workforce hit a ten-month high in May, with 23,000 new workers  (a 3-month rollings average). This was the largest number of new workers joining the workforce since August of last year when 25,000 new workers joined the workforce.

The second graph shows year-over-year gains in workforce size:


The unemployment rate reflects the relationship between new jobs added and new workers in the workforce. In order for the unemployment rate to decline, jobs must be added faster to the economy than there are new workers entering the workforce. The last graph shows the unemployment rate. While new jobs have been added in recent months, new workers have joined the workforce as well, and this has tempered declines in the unemployment rate.
Nevertheless, the unemployment rate has been slowly declining since 2010 in Colorado, with the May rate, not seasonally adjusted, falling to 6.8 percent during May. This is down from 7.9 percent recorded during May of last year.

Wednesday, June 26, 2013

Colorado unemployment rate below national rate for 12th month in a row

Colorado 's unemployment rate remained below the national unemployment rate for the twelfth month in a row in May, dropping to 6.9 percent in Colorado compared to 7.6 percent for the nation overall. (These are seasonally adjusted numbers.)

Colorado's seasonally-adjusted unemployment rate was down year over year in May, dropping from 8.2 percent during May 2012 to 7.0 percent during May 2013.

The national unemployment rate also fell at the national level, year over year, with a drop from 8.2 percent during May 2012 to 7.6 percent during May 2013.

The graph shows a comparison between the two rates since 2006 through May 2013:


May 2013 showed the largest difference between the Colorado unemployment rate and the national unemployment rate since 2010. The difference between state unemployment and national unemployment has been gradually growing since mid 2012.

See here for the employment article archive. 

Friday, June 21, 2013

New Multifamily Energy Efficiency Program

Affordable housing agencies are partnering with iCast for the following event:

iCAST, a Colorado-based nonprofit, brings you a new approach to energy efficiency improvements with ResourceSmart for Multifamily Housing! Designed as a simple, cost-effective strategy to achieve energy savings for either property owners or their tenants, ResourceSmart will help reduce energy usage, increase comfort and safety, and improve the overall value of your property. In addition to handling each step of the upgrade process – from assessment to final quality checks - we also offer a unique combination of incentives, rebates, and financing options. The estimated savings from your energy efficiency improvements are designed to exceed your loan payments, which essentially means your investment begins to pay for itself from day one!

See the full brochure here. 

Wednesday, June 19, 2013

Denver labeled an energy industry 'boom town'

According to Jones Lang LaSalle, Denver is a"top North American cities where commercial real estate demand has spiked due to rapid energy industry growth."

According to their report:


        Denver: Located near significant new opportunities for natural gas
        production, Denver is becoming a center of activity for energy
        companies, which are leasing space at a rapid pace.  An analysis of
        energy leasing transactions revealed that energy tenants in Denver's
        central business district paid an average of 9.7 percent above
        landlords' initial asking office space rental rates.

The press release in full:


Boom Towns: Energy Industry Triggers Heated Competition for Prime Real Estate
Jones Lang LaSalle research identifies top North American cities where commercial real estate demand has spiked due to rapid energy industry growth
HOUSTON, June 19, 2013 /PRNewswire/ -- Growth in the domestic energy industry is expected to create more than 3.5 million American jobs by 2035, including 700,000 in the next two years alone*.  The same industry growth creating jobs is also driving heated competition for prime real estate - predominantly in a handful of cities where the oil and gas industry is booming. New research from Jones Lang LaSalle (JLL) indicates that the majority of commercial real estate opportunities resulting from this job growth will be concentrated in the following North American cities: Calgary, Dallas, Denver, Houston, Philadelphia and Pittsburgh.

News Digest, June 19

Fire will send ripples through local housing market COLORADO SPRINGS - The sudden displacement of nearly 500 families in Black Forest will send ripples through the local housing market. In the short term, the charred landscape could push down home prices in the forest. "If somebody is looking across nothing but a black forest, certainly that will affect values and the ambiance and be a complete reminder every time somebody looks out the window," said Alan Wilaby, a broker for ERA Shields who lives and sells homes in Black Forest.

  Foreclosure filings down by half in Colorado urban counties (DBJ) New foreclosure filings in Colorado's urban counties dropped in May to less than half their level of May 2012, the Colorado Division of Housing reported today. And foreclosure auction sales dropped by 25.4 percent last month from a year earlier in urban counties, officials said.

  Colorado foreclosure filings dive 50 percent in May (Denver Post)In addition, foreclosure auction sales in Colorado's metropolitan counties were down 25.4 percent in May compared to May of last year, falling from 965 to 720. Foreclosure auction sales from January through May were down 29.4 percent.

  Rental properties scarce for those displaced by Black Forest fire People displaced by the Black Forest fire may run into trouble finding rental homes. Economist Ryan McMaken with the Colorado Division of Housing says apartment and single-family home rentals are hard to come by as it is. In the last ten years there's been little new construction in the city and county, and that combined with a growing number of people looking for temporary housing already caused rental availability to go down and prices to go up.

  Colorado home loan payoffs up 31% in Q1 from year earlier The number of home loans paid off in Colorado in the first quarter was up 31.4 percent from the first quarter of 2012, according to a report today by the Colorado Division of Housing. Public trustees in Colorado released 98,321 deeds of trust during the first quarter — the highest quarterly total since the division began collecting quarterly totals in 2008, the report said.

Colorado foreclosure filings dive 50 percent in May

Foreclosure filings were down 50.5 percent in Colorado metro counties during May 2013, falling year over year to the lowest level recorded during May in any year since the Division of Housing began collecting monthly totals in 2007.  According to a report released Wednesday by the Colorado Division of Housing, foreclosure auction sales in Colorado’s metropolitan counties were down 25.4 percent in May this year compared to May of last year, falling from 965 to 720.  Over the same period, foreclosure filings dropped from 2,249 to 1,113.   

For the first five months of the year combined, from January through May, foreclosure filings were down 43.4 percent in 2013 when compared to the same period last year. Foreclosure auction sales were down 29.4 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.

“The decline in foreclosure activity has clearly accelerated since the beginning of 2013,” said Ryan McMaken, an economist for the Colorado Division of Housing. “And a downward trend is likely to continue as long as employment is stable and we continue to see low mortgage rates.”   

Year-to-date through May this year, compared to the same period last year, the counties with the largest drops in foreclosure filings were Douglas and Arapahoe counties where filings decreased by 49.2 percent and 46.4 percent, respectively.  All counties surveyed reported year-to-date declines of 30 percent or more in foreclosure filings, when compared to the same period of last year.

Foreclosure auction sales were also down in all counties surveyed in the year-to-date numbers, with Denver and Douglas counties reporting the largest declines, year over year.  Year-to-date through May, auction sales were down 39.2 percent in Douglas County and 40.4 percent in Denver County, compared to the same period of last year.

The county with the highest rate of foreclosure sales during May was Mesa County with a rate of 940 households per foreclosure sale. Pueblo County came in second with 1,221 households per foreclosure sale. The lowest rate was found in Broomfield County where there were 10,980 households per foreclosure sale during May.


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

Tuesday, June 18, 2013

NAHB: Housing affordability up in Colo Springs, Ft. Collins, and Pueblo, but down in Boulder, Denver and Greeley

According to the National Association of Home Builders, housing affordability (for purchase housing), rose in Colorado Springs, the Ft. Collins area, and in Pueblo, while affordability fell in Boulder, the Denver area, and Greeley. (The Grand Junction area was not included in the survey.) 

The NAHB's affordability index is a measure of how many households in a given area can afford the median-priced home in the area.

The index for each metro area over the past five quarters was:

Q1_12 Q2_12 Q3_12 Q4_12 Q1_13
Boulder Housing Opportunity Index 69.2 71.6 71.7 70.7 70.7
Colorado Spr Housing Opportunity Index 87.5 84.6 86.7 82.1 85.1
Denver-Aurora Housing Opportunity Index 80.1 76.8 78.1 79 76.6
Ft Collins Housing Opportunity Index 83.6 83.9 85.4 85.5 86.1
Greeley Housing Opportunity Index 83.2 85.6 86.3 86 85.7
Pueblo Housing Opportunity Index 91 90.5 93 88.9 89.5

The graph shows the index value for each metro area since 1999:


Mot surprisingly, Boulder was the least affordable metro area, according to the study, while the Pueblo area was the most affordable.

Much of the increase in affordability since 2009 has been driven by continually declining mortgage rates.

Several Colorado metros showed a higher affordability index than the nation overall, which, according to the NAHB, was 73.7 nationwide.

According to the press release:

Housing Affordability Holding Strong in Early 2013
WASHINGTON, May 14 - Nationwide housing affordability held near historic highs in this year's first quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. 
In all, 73.7 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $64,400. This is down slightly from the 74.9 percent of homes sold that were affordable to median-income earners in the final quarter of 2012.

Colo. Springs added to 'Improving Markets' Index, Pueblo dropped

As of June 6, all metro areas in Colorado, except Pueblo, are on the National Association of Home Builders' Improving Markets Index. For much of 2012, Greeley, Boulder, and Ft. Collins were included on the "Improving Markets" list put out by the National Association of home Builders. Pueblo was added in late 2012, but then dropped again in recent months. Colorado Springs and Grand Junction have been added since early 2013. The June list, released Wednesday by NAHB, includes six metro areas.

Permits Growth Prices Growth Employment Growth
Trough From Trough From Trough From
 MSA  Date Trough Date Trough Date Trough
 Boulder, CO  11/30/09 15.9% 01/31/11 8.7% 08/31/09 8.7%
 Colorado Springs, CO  04/30/09 4.2% 01/31/12 9.0% 03/31/10 3.8%
 Denver, CO  03/31/09 4.8% 02/28/11 12.6% 01/31/10 7.6%
 Fort Collins, CO  03/31/09 9.7% 12/31/10 7.1% 12/31/09 8.3%
 Grand Junction, CO  06/30/11 5.7% 07/31/11 8.4% 01/31/10 2.9%
 Greeley, CO  01/31/09 4.2% 02/28/11 9.6% 12/31/09 10.6%

According to the press release from NAHB: 

List of Improving Housing Markets Rises to 263 Metros in June
WASHINGTON, June 6 - The number of U.S. housing markets on the mend rose by five to a total of 263 in June, according to the National Association of Home Builders/First American Improving Markets Index (IMI), released today. The list includes entrants from 49 states and the District of Columbia.

Housing News Digest, June 18

Home loan payoffs rise 31.4% in Colorado More Colorado homeowners managed to pay off their home loans in the past year with the state noticing a significant uptick in the number of deeds of trusts released. A release of a deed usually occurs when a home loan has been paid off, refinanced, sold or a borrower has made a final payment.

  Aspen building activity hitting levels not seen since recessionThe city issued more building permits in the first five months of the year than anytime since 2008, while the value of construction projects underway in town continues its upward trend. As summer construction season gets underway, the city has issued 585 permits for building, mechanical, electrical, plumbing and other construction-related work as of May 28, according to city building department records. That’s a 13 percent jump from the same time fame last year, and the highest year-to-date number since 2008, when the city had issued 665 permits through late May.

  Home loan payoffs in Colorado surge in the first quarter of 2013 However, trends in release activity were not uniform across the state. although all the 21 counties surveyed reported increases in release activity from the first quarter of 2012 to the first quarter of this year. The largest increases were reported in Adams and Arapahoe counties where release activity increased 62.1 percent and 55 percent respectively.

  California, Texas companies snapping up metro Denver apartments California-based real estate investment company Kennedy-Wilson Inc. has jumped into Denver’s surging apartment asset market by purchasing the $39.7 million Sommerset Gardens apartments in Aurora. It’s the first apartment building in the state for Kennedy-Wilson, which owns many properties in California, Washington and Utah.

  SmithJones Partners Completes Colorado TODDenver—SmithJones Partners LLC of Denver announced it has completed construction on a transit-oriented community in Broomfield, Colo. The community, called Arista Uptown Apartments, includes 272 units. KTGY Group Inc. is the design firm for the community. Arista Uptown Apartments, which is a three-story walk-up, includes 18 studios, 149 one-bedrooms units and 105 two-bedroom units. The apartments feature Quartz countertops, stainless steel appliances, island kitchen with breakfast bar, built-in wine rack, walk-in closets, in-unit full-size washers and dryers and tuck-under garages.

West regional CPI growth at 1.3 percent

The Bureau of Labor Statistics released this week the May CPI for US urban areas and regions. In the Mountain-Plains region, from May 2012 to May 2013, the CPI increased 1.3 percent, and was equal with April's year-over-year change of 1.3 percent.

In the first graph, we see that the year-over-year change in May for the Mountain-Plains CPI was down from May 2012's change of 2.0 percent, and was well down from 2008's pre-recession annual change of 3.7 percent.



Looking at each month for the past decade, we find that the year-over-year change in CPI is now at the lowest it's been since 2010.



This is a small increase for CPI, and the increase in the housing component of CPI, 2.6 percent, is still quite low compared to what we're seeing in a variety of other housing cost indicators. There is ample evidence that housing costs in both rental and owner-occupant properties are increasing at a rote in excess of 4 percent, year over year across the American west region. In Denver metro for example, the average rent is up about 4.4 percent, year over year, while the median home price is up about 10 percent. Year-over-year changes are even larger in many other markets of the West region including Phoenix, and many markets in California. The method of calculating CPI are complicated, but it is somewhat problematic when the official CPI establishes that housing prices are increasing at a rate far below what all other data indicates.

Multifamily housing starts way up in US West region, single-family starts up 17 percent

Housing starts in the West Census region of the US, which includes Colorado, were up 36.7 percent percent from May 2012 to May 2013, counting both single-family and multi-family units combined. According to new housing construction and housing starts data released last week by the US Census Bureau, housing starts were at the highest total recorded in any month since 2008  (Graph units in 1,000s.)



Multi-family housing starts in the West were also at a five-year high for May, rising to the highest May total since 2006, and to the second-highest May total in more than a decade.  May's multifamily starts total was near the highest total for any month reported since 2008. 

The second graph shows multifamily housing starts for the West region (units in 1,000s): 


Multifamily housing starts increased in the region by 84 percent from May 2012 to May 2013. As the graph shows, overall multifamily activity has increased substantially since the trough of 2009, and is now seeing some of the highest levels of activity since 2007. In the West region during May, there were 8,300 new multifamily units started, compared to 4,500 units during the same period of 2012. 

Single-family starts, on the other hand, showed growth that was much more restrained than multifamily growth. Nevertheless, the growth from 2012 to 2013 was substantial with single-family starts increasing 17.2 percent from May 2012 to May 2013. There were 12,900 new single-family starts during May 2013, compared to 11,000 single-family starts during May of 2012. (Graph units in 1,000s.)
The year-over-year increase in housing starts was larger in the West region than in the nation overall. Starts were up 27.1 percent, year over year, nationwide. 


Home loan payoffs in Colorado surged during first quarter following record-low mortgage rates

The number of home loans paid off in Colorado was up 31.4 percent from the first quarter of 2012 to the first quarter of 2013. According to a new report released today by the Colorado Division of Housing, public trustees in Colorado released a total of 98,321 deeds of trust during the first quarter of 2013, which was the highest quarterly total recorded in any quarter since the Division began collecting quarterly totals in 2008. 74,809 deeds were released during the first quarter of last year.

Typically, a release of a deed of trust occurs when a real estate loan is paid off whether through refinance, sale of property, or because the owner has made the final payment on the loan. Increases in release activity occur as refinance and home-sale activity increases, and rising release totals typically indicate increases in the demand for home loans and real estate.

Release activity also increased from the fourth quarter of 2012 to the first quarter of 2013, rising 13.3 percent.  There were 86,816 deeds released during the fourth quarter of last year.

“From early 2011 to late 2012, the average 30-year fixed mortgage rate fell for seven quarters in a row,” said Ryan McMaken, an economist with the Colorado Division of Housing. “We’re not surprised to see refi and purchase activity increase sharply as a result.”

Trends in release activity were not uniform across the state, although all of the 21 counties surveyed reported increases in release activity from the first quarter of 2012 to the first quarter of this year. The largest increases were reported in Adams and Arapahoe counties where release activity increased 62.1 percent and 55.0 percent, respectively. The smallest increases were found in Eagle and Jefferson counties where activity increased 3.7 percent and 12.5 percent, respectively.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity during 2013’s first quarter were Douglas, Teller and Summit counties. The counties with the least activity were Fremont, Pueblo and Delta counties.

“We still see some hotspots in some higher-income counties,” McMaken said, “But with most counties reporting sizable increases in release activity, we can say that home loan activity has been increasing generally across Colorado.” 


Totals for releases of deeds of trust are collected quarterly by the Colorado Division of Housing. This report tracks releases of deeds of trust as reported by public trustees in Colorado. The report includes twenty-one counties which are chosen based on population size and to ensure that as many regions of the state as possible are represented. More than 90 percent of all occupied households in Colorado are within the twenty-one counties chosen.

Monday, June 17, 2013

Buildfax: Home remodeling up 4 percent in U.S. West during April

According to Buildfax's residential remodeling activity index, remodeling activity was up 8 percent nationwide from April 2012 to April 2013. During the same period, activity in the U.S. West region was up 4 percent.

According to the press release:

National Residential Remodeling
Residential remodels authorized by building permits in the United States in April were at a seasonally-adjusted annual rate of 2,969,000. This is 13 percent above the revised March rate of 2,631,000 and is 8 percent above the April 2012 estimate of 2,747,000.Regional Residential Remodeling 
Seasonally-adjusted annual rates of remodeling across the country in April 2013 are estimated as follows: Northeast, 507,000 (up 2% from March and down 25% from April 2012); South, 1,344,000 (up 11% from March and up 22% from April 2012); Midwest, 659,000 (up 22% from March and up 9% from April 2012); West, 636,000 (up 11% from March and up 4% from April 2012). 
Viewing the Economic Recovery Through Remodeling
"Volatility in residential remodeling activity has continued through the first four months of 2013, with April showing significant gains from March in all regions except for the Northeast, where activity has been steadily dropping for more than six months," said Joe Emison, Chief Technology Officer at BuildFax.

April 2013 monthly Foreclosure Report now available

I've posted the April 2013 foreclosure report for all metropolitan counties. Here's the summary:

During April 2013, foreclosure filings were down, year over year, and foreclosure filings remained near 7-year lows. Foreclosure sales at auction remained near 5-year lows.
 April 2013 foreclosure filings were down 40.2 percent from April 2012, dropping from 2,064 to 1,234, year over year.
 April 2013 foreclosure sales (completed foreclosures) were down compared to April 2012 with a decrease of 24.9 percent, dropping from 1,024 to 769. 
 For the first four months of the year combined, foreclosure filings were down 41.5 percent in 2013 compared to the same period last year. There were 8,384 foreclosure filings during the first four months of 2012 and 4,903 during the same period this year.

Foreclosure auction sales were down 30.3 percent comparing the first four months of 2013 to the same period last year. There were 4,387 foreclosure sales during the first four months of last year and 3,057 during the same period this year. 
 Filings rose 17.2 percent from March 2013 to April 2013, and auction sales were up 21.5  percent over the same period. 
 Mesa County reported the highest foreclosure rate during April, while Larimer County reported the lowest rate. (See Table 7.)

 Month-to-month foreclosures:

Thursday, June 13, 2013

Zillow: Home prices up from last year in all metro areas of Colorado

According to to most recent Zillow Home Values report, home values as measured by the Zillow Home Value Index,were up from April 2012 to April 2013 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 April, increasing 5.2 percent from April 2012 to April 2013, rising to $158,300.

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

Change from April 2012 to April 2013 (by %):
Colorado statewide: +9.9
Boulder +6.5
Colo Springs +7.5
Denver metro +13.4
Ft. Collins +6.1
Grand Junct +4.0
Greeley +10.0
Pueblo +8.1




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. Prices in Denver metro, Ft Collins and Boulder are all now back above peak levels from before the financial crisis.

The Zillow home values in April 2013 for each metro area are (in $s):

Colorado 222,300
Boulder 327,800
Colo Springs 196,100
Denver metro 237,100
Ft. Collins 234,100
Grand Junct. 167,600
Greeley 176,100
Pueblo 105,600

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 165,000 since 2007. Greeley prices, on the other hand, have recently accelerated as new growth driven by oil has driven up demand for real estate in the region.

See the home price archive for comparisons with other indices.

Zillow home valuations, known as the median "Zestimate valuation" is just one of many indices we consult, and it tends to show some of the largest growth rates. Indeed, the Zillow growth rates tend to be above those of the FHFA and Case-Shiller indices. It is helpful as a means of comparing different metro areas.

Zillow: First Quarter 2013 Negative Equity Stats for Colorado

Zillow has released its first quarter 2013 report on underwater mortgages in Colorado and Colorado counties. Click here for the itneractive map.

We can see that among the metropolitan counties, Mesa County shows the highest rate for underwater mortgages at 36 percent. Other counties with high rates during the first quarter were Weld County (32%), Pueblo County (33%), and Adams County (31%).

Among smaller counties with high rates of underwater mortghages, we find Garfield County with a rate of 45% and Otero County at 34%.

The metro counties with the lowest underwater rates were Larimer County (12%), Boulder County (11%), and Jefferson and Douglas County, both at 14 percent.

Not surprisingly, there's a correlation between counties with high rates of underwater mortgages, and counties with high foreclosure rates.

Wednesday, June 12, 2013

Vacancies in single-family homes and townhouses drop to near zero

Continuing an ongoing trend, the 1st quarter 2013 vacancy rate in rented single-family homes, townhouses, and condos in the metro area fell year over year for the fourth quarter in a row and dropped to a cumulative vacancy rate of 0.9 percent. The vacancy rate was 1.6 percent during the first quarter of 2012. This is the lowest vacancy rate ever recorded by the survey which dates back to 2003. The first graph shows the vacancy rate for all units surveyed in the metro area and for select property types.  Clearly, the overall trend has been downward since 2010, and the market has been very tight since 2010. Traditionally, these types of properties tend to have lower vacancy rates than multifamily apartment units. As apartment vacancies have continued to tighten (to 4%-5%) since 2009, we see condos, townhomes, and single-family homes tighten all the more. The vacancy rate for all units was 1.7 percent during the 4th quarter of 2012. 

Meanwhile, increases in the average rent have begun to accelerate a little following numerous quarters of rather tepid growth. The average rent in all units surveyed for the metro area was 3.0 percent, rising from $1,056 during the first quarter of 2012 to $1,089 to the first quarter of 2013. Not surprisingly, single-family houses reported the highest average rent of $1,324, while condos reported the lowest average rent of $805 during the first quarter. 

The third graph shows the year-over-year change in each type of unit. We can see that condos now appear to be establishing an upward trend after numerous quarters of year over year declines in the average rent. during the first quarter 2013, the condo average rents were up 6.9 percent, year over year, while townhouses were up 4.4 percent and single-family houses were up 4.8 percent. 

These sizable increases suggest a change from recent quarters in which year over year increases were far more mild with changes ranging typically from 1 to 3 percent in both single-family houses and condos in recent quarters. 

The last graph shows the average rent adjusted for inflation. While increases in rent have become the norm in recent years, we find that these increases are just about keeping up with inflation. In other words, the real average rent has been flat in recent years. However, if the current trend keeps up, we will start to see the average rent surpass inflation and show real gains. Using constant 2001 dollars, the average rent during the first quarter was $843, compared to $831 reported during the first quarter of 2012. That's an increase of 1.4 percent. So, we have seen a real increase over the past year, but it was an increase of 12 dollars. 



March 2013 monthly foreclosure totals for metro counties

We've posted the monthly foreclosure report on metro counties for March. April 2013 will be released next week. The full report is here.

A couple of graphs from the report show just how far foreclosures have fallen over the past year:


 Note that the March 2013 total was the lowest for any month since we began tracking foreclosures in 2007.

See the full report here. 

Housing News Digest, June 12

Down Payments Shrink Amid Home Price Recovery According to LendingTree’s study, average down payments for 30-year fixed-rate purchase mortgages have declined 9.4 percent since May 2011. As of May 31, 2013, the average down payment percentage across the nation was 16.1 percent, while the average national loan amount was $221,694.76. “As the housing market begins to improve, lenders are beginning to loosen their guidelines to more normalized standards and approve loans with lower down payments,”

  New home sales in west region hit 6-year high in April New single-family home sales in the western region of the U.S. hit a six-year high in April, with 13,000 new homes sold during the month. This marks the highest number of new home sales in a given month since September 2007. April's total was the highest of any April since April 2008, according to the Colorado Division of Housing

  Denver homebuilders report high demand for skilled workers The demand for new homes in Colorado has left builders scrambling to find enough skilled workers, a scenario that seemed improbable a year or two ago. For buyers, that could mean longer wait times for new homes and higher prices to cover the wage increases that skilled workers are now commanding.

  Downtown condo market dips 12% An in-depth analysis of the downtown condo market by Jesse Hamilton of Land Title Guarantee Co., shows there were 90 closing in downtown in the first quarter, compared with 102 in the first quarter of 2012, a 12 percent drop. The total dollar volume in closings showed a similar trend, falling 11 percent to $41.9 million from $66.3 million a year earlier.

  Colorado Springs Real Estate Housing Recovery Continues The Pikes Peak Association of Realtors, which serves the Colorado Springs area is reporting increases in the number of homes selling and also housing values. The association is reporting a 34-percent increase in housing sales this year as opposed to 2012. Metro Brokers Real Estate Broker Associate Lori Jones says low interest rates are among the factors driving the sales surge. “Interest rates remain at historically low levels which is motivating buyers to act quickly and get a house. Home sales in our area increased every month during 2012 and we’re seeing the same thing happen in 2013.”

Monday, June 10, 2013

Robert Half: Denver CFOs Expect Hiring To Increase In Third Quarter

Professional-level hiring is expected to increase in the Denver area in the third quarter, according to the Denver Professional Employment Forecast from Robert Half. Ten percent of chief financial officers (CFOs) in the market anticipate adding new positions, up from 7 percent in the second quarter. Another 67 percent said they will hire for roles that open during the quarter.

Executives also are optimistic about their business prospects. More than eight in 10 (85 percent) CFOs expressed confidence in their company's growth potential for the quarter, with more than one-third (35 percent) of respondents saying they are very confident.

Friday, June 7, 2013

New home sales in West region hit six-year high in April

New single-family home sales in the U.S. West were up 30 percent from April 2012 to April 2013, coming in at 13,000 new homes for April 2013, which was the largest number of new home sales in any month since September 2007. April's total was also the highest total for any April since 2008 . 

The first graph shows monthly new home sales totals for each month since 2003. 2012 was clearly the most active year since 2009, and 2013 is looking to be the most active year since 2008. 



The second graph shows new home sales divided out by month. April's total was a six-year high for the month. For the West region: 



The number of new homes for sale began to finally inch up a bit in March and April following  along flat period. There were 38,000 new homes for sale in the West region during April, compared to 30,000 for sale during April of 2012. That's a26 percent increase. 

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. We see in the graph that the inventory bottomed out in 2012, but has come up a little over the past 4 or 5 months. Nevertheless, inventory in new homes remains very low. 



For a longer historical perspective, see here

April CPI: Year-over-year growth down to 1.3 percent

The Bureau of Labor Statistics released this week the April CPI for US urban areas and regions. In the Mountain-Plains region, from April 2012 to april 2013, the CPI increased 1.3 percent, declining from March's year-over-year change of 1.5 percent.

In the first graph, we see that the year-over-year change in April for the Mountain-Plains CPI was down from March's 2012's change of 1.5 percent, and was well down from 2008's pre-recession annual change of 3.5 percent.



Looking at each month for the past decade, we find that the year-over-year change in CPI is now at the lowest it's been since 2010.



This is a small increase for CPI, and the increase in the housing component of CPI, 1.6 percent, is surprisingly low and problematic. There is ample evidence that housing costs in both rental and owner-occupant properties are increasing at a rote in excess of 4 percent, year over year across the American west region. In Denver metro for example, the average rent is up about 4.4 percent, year over year, while the median home price is up about 10 percent. Year-over-year changes are even larger in many other markets of the West region including Phoenix, and many markets in California. The method of calculating CPI are complicated, but it is somewhat problematic when the official CPI establishes that housing prices are increasing at a rate far below what all other data indicates.

Housing starts in west region rise in April, with multifamily starts up 51 percent

Housing starts in the West Census region of the US, which includes Colorado, were up 40.2 percent percent from April 2012 to april 2013, counting both single-family and multi-family units combined. According to new housing construction and housing starts data released last week by the US Census Bureau, housing starts were at the highest total recorded in any April since 2008  (Graph units in 1,000s.)


Multi-family housing starts in the West were also at a five-year high for April, rising to the highest April total since 2008.  

The second graph shows multifamily housing starts for the West region (units in 1,000s): 


Multifamily housing starts increased in the region by 51 percent from April 2012 to April 2013. As the graph shows, overall multifamily activity has increased substantially since the trough of 2009, and is now seeing some of the highest levels of activity since 2007. In the West region during April, there were 5,900 new multifamily units started, compared to 3,900 units during the same period of 2012. 

Single-family starts, on the other hand, showed growth that was much more restrained than multifamily growth. Nevertheless, the growth from 2012 to 2013 was substantial with single-family starts increasing 35 percent from April 2012 to April 2013. There were 12,900 new single-family starts during April 2013, compared to 9.500 single-family starts during April of 2012. (Graph units in 1,000s.)



Thursday, June 6, 2013

Latest inventory numbers: big month-to-month gain, but inventory still down year-over-year


As reported in the Denver Post recently, MLS released some new numbers on the inventory of homes for sale:

The number of homes for sale in metro Denver increased by 18 percent from April to May, a situation that will help homeowners and buyers, independent real-estate analyst Gary Bauer said Wednesday.
Yes, that's true. In the Metrolist data,  inventory did increase from April to May, as it usually does, due to seasonal factors. The question remains as to whether or not the increase is unusually large for the time of year and if there is an increase year over year. 

To find another source for similar data for comparison purposes, we turn to The Department of Numbers, which has been posting inventory data since 2006.  We do see that inventory in the metro Denver area increased 5.2 percent from April to May. This is indeed one of the largest month-to-month increases we've seen in several years. A month-to-month jump of more than 4 percent has been pretty rare since 2008. From April to May 2013, inventory increased from 10,249 to 10,791. So, it does seem that there is some real growth in inventory over the past month or so. The first graph shows the total number of homes for sale for each month since April 2006. Obviously, the inventory is way down from the boom days of 2006 and 2007. 
On the other hand, the year-over-year comparison continues to show that inventory is still declining in some measures. The second graph shows the year-over-year changes for each month, and in May 2013, the total inventory, which was 10,791, was down 28 percent from May 2012's total inventory, which was 15,114. Year over year changes have shown repeated declines since 2011 in the Denver area. 

Naturally, in a situation with flat or increasing and demand, plus declining supply, prices will head upward quickly. Demand is being repeatedly stimulated by monetary easing by the Fed, through low interest rates, and through other avenues designed to increase liquidity for homebuying. So, there's plenty of demand, even in an economic environment that shows few big gains in wages and income. The third graph shows the median asking price for homes in metro Denver according to The Department of Numbers.

We can see that from May 2012 to May 2013, the median asking price rose 10.4 percent from $297,975 to $329,100. 


Trulia: Rents up 4.2 percent in metro Denver in May 2013

According to Trulia's Rent Monitor data, released today, the median rent (for a 2-bedroom unit) in metro Denver was up 4.2 percent in May 2013 when compared to May 2012.

According to our first quarter Vacancy and Rent survey, the year-over-year increase for metro Denver was up 4.2 percent from March 2012 to March 2013. So, it seems we're looking at a situation in which rents are outpacing the official inflation rate (of about 2.5 percent) but are not advancing at enormously high rates right now.

Of course, this latest increase in rents is coming on top of two solid years of year-over-year rent growth and signals a continued demand for rental properties in the region.


Colorado GDP growth moderate at 2.1 percent in 2012

The BEA released new data on 2012 real GDP today:
Real gross domestic product (GDP) increased in 49 states and the District of Columbia in 2012, according to new statistics released today by the U.S. Bureau of Economic Analysis (BEA) that breakdown GDP by state. Durable–goods manufacturing, finance and insurance, and wholesale trade were the leading contributors to real U.S. economic growth. U.S. real GDP by state grew 2.5 percent in 2012 after a 1.6 percent increase in 2011.
The map shows that Colorado falls in the middle quintile for real GDP growth among the states, with a year-over-year growth rate of 2.1 percent. Oil industry growth drove big increases in North Dakota and Texas.

 Comapring year-over-year growth for the US and Colorado, we find that the nation overall has been slightly outpacing Colorado in recent years. In the US, the growth in real GDP from 2011 to 2012 was 2.4 percent.
The third graph shows per capita real GDP.  In 2012, Colorado per capita real GDP was 46,242, and the US level was $42,784. In neither case has per capita real GDP returned to previous peak levels which occurred in 2007. In 2007, Colorado per caop real GDP peaked at $47,480, and it peaked at $43,499 in the US. 
In year-over-year growth for per capita real GDP, we find that the US has been outpacing Colorado since 2010. As noted in our article on per capita personal income, some of this disparity is explained by the fact that population is increasing in Colorado, even while incomes and productivity are largely stable. 


Overall, these numbers tell us that in 2012, Colorado was experiencing growth, but it was moderate compared to many areas of the nation. 

June Beige Book: Economy in district grew at 'modest pace'

The tenth Federal Reserve district, which includes Colorado, grew at a 'modest pace' during May, according to the latest Beige Book released by the Federal Reserve yesterday. 

According to the report's section on real estate and construction: 
Residential real estate activity remained strong, and commercial real estate improved modestly in late April and early May. Residential real estate sales continued to rise sharply. Prices trended upward and inventories are lower compared to the prior survey period. District contacts reported that low inventories have slowed sales and put upward pressure on prices in some areas. They also reported concerns that appraisals were not keeping pace with price increases. Contacts expected residential sales and prices to increase further, supported by low interest rates and a rise in consumer confidence. As a result of improved sales activity and higher traffic of potential buyers, many agencies hired additional real estate agents over the past month or expected to hire in coming months. Residential builders reported steady construction activity with expectations of moderate growth over the next three months.  Commercial real estate activity rose modestly during the past month. Construction activity strengthened and prices and sales inched up, while vacancy rates fell slightly. Contacts expected stronger activity in coming months, noting that several future projects are currently in planning stages. Optimism differed across District states, with commercial real estate construction in Oklahoma expected to be particularly strong, and construction in New Mexico and Missouri fairly soft. 

On wages: 

Wage pressures increased slightly but remained weak during the survey period, while prices rose for raw materials and most finished goods across industries. Labor shortages and wage pressures inched up, with strong demand for skilled workers including technicians, truck drivers, engineers and software developers. Many employers remained concerned about the impact of recent healthcare legislation on labor costs and how these costs might be passed onto consumers or impact profit margins. Retail prices increased moderately over the survey period, and retailers planned to raise prices at a similar pace over the next few months. Food costs continued to rise, and restaurant owners increasingly expected to raise menu prices in response. Similarly, raw material prices rose moderately for manufacturers. While finished goods prices remained fairly flat over the survey period, manufacturers planned to raise finished good prices over the next few months to partially offset higher input costs. Builders and construction supply firms continued to report higher prices for construction materials, particularly lumber. In some cases, construction supply costs rose faster than anticipated, which resulted in more frequent price adjustments and reduced margins. Transportation firms also noted an increase in input prices. 
Read the full report.

Wednesday, June 5, 2013

Broomfield, Douglas, Larimer, Weld, and El Paso Counties the most active for single-fam permitting in 2013

According to the Census Bureau's year-to-date total through April 2013, the most active counties for single-family permits in Colorado, when adjusted for each County's total household numbers, were Douglas, Broomfield, Weld, El Paso, and Larimer counties.

All counties, when adjusted for the existing number households in each county: (New single-family permits per household (x1,000)):

Douglas 6.1
Broomfield 5.3
Weld 4.7
El Paso 4.0
Larimer 3.9
Mesa 2.4
Arapahoe 1.7
Adams 1.7
Jefferson 1.3
Denver 1.3
Boulder 0.8
Pueblo 0.7

Of the 4,339 new single-family permits issued this year through April, more than two-thirds of them (67 percent) were issued in Arapahoe, El Paso, Larimer, Douglas, and Weld counties alone. Much of the development being seen in Weld County is in the southern part of the county, and the high development rates in Douglas, Broomfield, and Larimer counties are to be expected as those areas are among the most in demand areas in the state right now for real estate in general.

See here for recent posts about building permits.

New single-family permits during January-April 2013:
El Paso 986
Douglas 640
Larimer 488
Weld 429
Arapahoe 405

Also:
Adams 271
Boulder 100
Broomfield 117
Denver 366
Jefferson 298
Mesa 140
Pueblo 50

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

The largest year-over-year (Jan-Apr 2012 to Jan-Apr 2013) increases in single-family permit activity were found in Broomfield (244 percent), Arapahoe (76 percent), El Paso (61 percent) and Larimer (62 percent.)

See here for full data.

Housing News Digest, June 5

Colorado Springs homes appreciate 8.2% Colorado Springs home prices climbed 8.2 percent year-over-year in April, according to analysis firm CoreLogic . They rose 2.1 percent from March to April. Excluding the distressed sales, short sales and bank-owned properties, sales prices climbed 7.1 percent year-over-year.

  Colorado Springs homebuilding increases in May, while foreclosure fall The local single-family housing market continued its recovery last month as the pace of homebuilding climbed and foreclosure activity slowed.

  Inventory of homes rises in metro Denver The number of homes for sale in metro Denver increased by 18 percent from April to May, a situation that will help homeowners and buyers, independent real-estate analyst Gary Bauer said Wednesday. "The more inventory we have available helps the market," said Bauer. "Prospective home sellers who have been sitting on the fence now are coming off the fence and putting their homes on the market. The homebuyers who are out there every day facing multiple offers and price increases, they have more homes to look at," he said.

  LYND tapped to manage Colorado apartment communities Confluence Cos. has selected the Denver office of national real estate company LYND to manage three apartment communities in the Denver metropolitan area and Boulder County. San Antonio-based LYND will manage the North Main Apartments at Steel Ranch, now under construction, and two more apartments still in the planning stage. In all, LYND will manage 578 units.

  First-quarter Eagle County real estate sales nearly 20 percent better than 2012 The number of real estate transactions was up 18 percent in Eagle County for the first three months of 2013 compared to the first quarter of 2012, according to an analysis by Land Title Guarantee Company. But the price of single-family homes dropped six percent for the first quarter of 2013 compared to 2012, while sales of multi-family homes rose 23 percent for the first quarter.

Tuesday, June 4, 2013

More than half of new multifamily permitting in Colorado in 2013 is in Denver County

According to the Census Bureau, new county-by-county permit data through April shows that 58 percent of multifmaily permit activity this year has taken place in Denver County alone. Using the county-by-county stats from the Census Bureau, we see that there have been 1,911 multifamily permits issued in Denver County this year. That's 58 percent of the 3,270 total permits reported by all counties surveyed. 

This article is about multifamily permits only. 

Other counties that reported a sizable amount of multifamily activity were Arapahoe, Broomfield, El Paso, and Larimer Counties. Little multifamily permitting activity was reported in other counties.

Multifamily permit totals for metropolitan counties in Colorado were (Jan-April 2013):

Adams 0
Arapahoe 248
Boulder 105
Broomfield 367
Denver 1,911
Douglas 0
El Paso 260
Jefferson 89
Larimer 266
Mesa 0
Pueblo 0
Weld 24


Year-to-year growth: 

Total permits were up 34 percent statewide from Jan-Apr 2012 to Jan-Apr 2013. 

Year-over-year growth rate for each county (Jan-April 2012 to Jan-Apr 2013):

Adams -100 percent
Arapahoe +406 percent
Boulder -67 percent
Broomfield +151 percent
Denver +142 percent
Douglas -100 percent
El Paso -17 percent
Jefferson +1,102 percent (from 8 to 89)
Larimer +533 percent
Mesa No change (zero)
Pueblo  No change (zero)
Weld +380 percent 

It's still a bit early in the year to make many predictions, but Denver County clearly continues to be a hot spot for new development, and for their sizes, Broomfield County and Larimer County continue to be active as well. This trend simply continues what we saw last year for these three counties. 

See here for full data. 

Note: This county-by-county data will not match up with statewide data shown here, due to differences in methods.