Wednesday, August 28, 2013

Trulia: Asking rents down in Colorado Springs, up in Denver in August 2013

According to the July Trulia Price Monitor and Rent Monitor, the index value for asking rents increased 3.7 percent from July 2012 to July 2013. In Colorado Springs, on the other hand, the asking rents decreased 1.2 percent.

Over the same period, from Jul;y 2012 to July 2013, the asking price for homes increased 2.6 in Colorado Springs, year over year, and the asking price index increased 12.0 percent.

This is one of the larger increases in home prices we've seen among the various indices. The asking rents in Colorado Springs may be reflecting ongoing weakness in the job market there, although the Colorado Springs area has shows some strengthening this year in employment.

Tuesday, August 20, 2013

Colorado total employment reaches new post-recession high in July, remains below 2008 peak

Year-over-year gains in total employment in Colorado rose to an 19-month high during July 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 57,000 jobs, comparing July 2012 to july 2013.

57,000 was the largest year over year gain since January 2012 when more than 68,000 new jobs were added compared to the same month of the previous year.

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

Year-over-year employment gains are still well below what they were during the last expansion of 2003-2008, although growth has been accelerating in recent months.

Comparing july 2012 to July 2013, 28,000 new workers entered the labor force, continuing a trend of generally strong gains in labor force size since February of this this year.  The year-over-year gain during July was down a little from June's 17-month high of 30,000 new workers added.

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

As with total employment, we see that labor force growth remains well below that of the last expansion.

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 July rate, not seasonally adjusted, falling to 6.9 percent during July. This is down from 8.3 percent recorded during July of last year.

According to the Household survey, there are approximately 2.78 million workers in the workforce, with 2.59 million of them employed. There were 193,000 unemployed persons in the state during July 2013. total employment during July was 39,000 jobs below the employment peak achieved during July of 2008. The final graph shows total employment and labor force size in recent years. Note that while the labor force has exceeded totals reached during the peak of the last boom, total employment still remains below those 2008 peak levels:

Housing News Digest, August 20

Colorado Crossing sits as litigation abounds Half-finished buildings sit with gaping holes, windows without glass, parking lots without cars. Classy signs announce the now-derailed development: Colorado Crossing, on the weeded byway leading to its skeletal remains off Voyager and Interquest parkways. A nearly completed multiplex movie theater, flanked by a half-done office building and a parking garage, all sit vacant and unused, casualties of an economic downturn unparalleled since the Great Depression.

  For default servicing, all eyes rest on Colorado It’s been poorly reported by much of the trade press (perhaps because at least one trade media outlet owns their own attorney guild), but you may have noticed recently at HousingWire that we’ve been highlighting coverage of an ongoing legal fracas involving the Colorado state Attorney General and nearly all of the major creditor’s rights firms in that state. The case centers on expenses charged in connection with foreclosure actions.

  Moody's corrects the rating history of Colorado Housing & Finance Authority New York, August 01, 2013 -- Moody's has corrected the rating history of Colorado Housing & Finance Authority Single Family Mortgage Bonds, Class I Adjustable Rate Bonds, 2006 Series B-1 (Taxable) (the "Bonds") to include CUSIP 196483DS7. Due to an internal administrative error, this CUSIP was not appended to the deal after the interest rate mode change.

  Colorado Springs apartment rents hit record high in second quarter Colorado Springs-area apartment rents jumped to a record high in the second quarter, as a somewhat better jobs picture, more people moving to town and limited numbers of newly constructed units coming on line combined to drive up demand and send rents soaring. The average rent for local apartments rose to $807.21 a month during the period from April through June, according to a report released Monday by the Colorado Division of Housing and the Apartment Association of Southern Colorado.

  Home Depot reaps benefits from U.S. housing rebound A recovery in the U.S. housing market helped Home Depot Inc. beat analysts’ quarterly profit and sales estimates, prompting the world’s largest home improvement chain to raise its outlook for the fiscal year. The results, which came just weeks after data showed that U.S. home prices rose in May, gave more evidence that the housing market was healing after years of weakness.

Monday, August 19, 2013

Buildfax remodeling index: U.S. West regional remodeling down 4 percent in June

According to the June remodeling index numbers from Buildfax, home remodeling activity was up 21 percent, year over year during June 2013. Meanwhile, activity in the West region was down slightly.

According to the press release:
National Residential Remodeling
Residential remodels authorized by building permits in the United States in June were at a seasonally-adjusted annual rate of 3,447,000. This is 1 percent below the revised May rate of 3,492,000 and is 21 percent above the June 2012 estimate of 2,844,000. 
Regional Residential Remodeling
Seasonally-adjusted annual rates of remodeling across the country in June 2013 are estimated as follows: Northeast, 658,000 (down 11% from May and down 28% from June 2012); South, 1,327,000 (down 3% from May and up 28% from June 2012); Midwest, 992,000 (down 8% from May and up 71% from June 2012); West, 702,000 (down 4% from May and down 4% from June 2012). 
Viewing the Economic Recovery Through Remodeling
"With such month-to-month volatility, the traditional month-over-month and year-over-year metrics aren't as useful as they have been in capturing residential remodeling trends," said Joe Emison, Chief Technology Officer at BuildFax. "Instead, it is easier to see an overall gradual improvement in the observation that in the 12 months ending June 2013, we see as 6% increase nationally in permitted residential remodeling projects versus the 12 months prior to that (ending in June 2012)."

Housing News Digest, August 19

Colorado Springs' public housing grant takes another cut Funding for the maintenance of more than 700 housing units overseen by the Colorado Springs Housing Authority took another dip Thursday. The local agency received $768,421 from the U.S. Department of Housing and Urban Development, according to an announcement by the federal agency. The was another decrease in funding for the local agency, which has seen capitol improvement grant money drop by nearly one-third since 2008, when it received $1,137,857, said Chad Wright, executive director of the housing authority.

  Colorado Springs Housing Recovery In Full Swing Metro Brokers Real Estate Broker Associate Lori Jones is citing information provided by the Colorado Association of Realtors. “The state association had the following to report about housing activity during the second quarter of this year; ‘New Listings were up 15-percent for single family homes and 23-percent for townhouse-condo properties. Pending/Under Contract numbers increased nearly 12-percent for single family homes and 22-percent for townhouse-condo properties. The Median Sales price increased nearly nine-percent to 260-thousand dollars for single-family homes and nearly ten-percent to 170-thousand dollars for townhouse-condo properties.

  $10 million student housing project headed for Greeley GREELEY - A 262-bed off-campus student housing project will break ground in Greeley Tuesday, with plans to open in time for the fall 2014 semester. The $10 million project , called University Flats, is being developed by Greeley Realty Investors, an affiliate of Denver-based Center Street Capital. Center Street Capital also developed Regency in Denver, a housing project catering to students at the Auraria campus.

  West's record wildfires raise questions about development Western state lawmakers have called on the federal government for more help and criticized its management of public lands, where large fires often start and then spread to private and state lands. That's no small issue in a region dominated by federally owned lands, which cover about 70 percent of Arizona and virtually all of Nevada, for example. The U.S. Forest Service labels about 65 million acres of its land "high or very high risk of catastrophic wildfires."

  Chart of the Day: Age-Restricted Housing’s Market Share in Colorado In Colorado, the market share for all types of age-restricted senior housing and care is nearly 17%, with affordable housing and skilled nursing as the most prevalent settings for seniors age 65 and older, according to Boulder-based consulting firm The Highland Group Inc. Statewide, 83.1% of all 65+ households live in regular mixed-age housing, according to The Highland Group’s analysis of the Colorado senior housing and care market. Given this, the market share for age-restricted housing then becomes 16.9%.

Colorado unemployment rate inches up, but remains below national rate

Colorado 's unemployment rate remained below the national unemployment rate for the fourteenth month in a row in July, dropping to 7.1 percent in Colorado compared to 7.4 percent for the nation overall. (These are seasonally adjusted numbers.)

Colorado's seasonally-adjusted unemployment rate was down year over year in July, dropping from 8.1 percent during July 2012 to 7.1 percent during July 2013.

The national unemployment rate also fell at the national level, year over year, with a drop from 8.2 percent during July 2012 to 7.4 percent during July 2013.

Year over year, unemployment declined farther in Colorado than in the nation overall. However, the seasonally-adjusted unemployment rate increased for the second month in a row during July, while the national unemployment declined from June's rate of 7.6 percent. 

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

See here for the employment article archive.  

Saturday, August 17, 2013

Corelogic: Colorado home prices up 9.2 percent in June marking 6th month of nearly double-digit increases

CoreLogic last week released its June home price index (HPI) numbers. The year-over-year change in June was 9.2 percent.  June marks the sixth month in a row during which the year-over-year change in the HPI was above or near 10 percent.   The national home price was again pulled upward by big home price growth in California, Arizona, and Nevada. Nationally, the index grew 11.9 percent from June 2012 to June 2013. Housing prices continue to increase at some of the largest rates seen since before the financial crisis. 

14 states had larger growth rates in the HPI than Colorado, with the highest growth rates being in Nevada, California, and Arizona. Nevada's HPI grew 26.5 percent year over year, and California's and Arizona 'a HPIs grew 21.4 percent and 16.2 percent respectively. Only two states showed declines in their HPIs over the same period with the declines being in Delaware and Mississippi where the HPI declined 1.1 percent and 2.1 percent, respectively.

Although interest rates started to tick upward this summer, the interest rate increases have yet to force much change in the home price numbers. 

Monday, August 12, 2013

Colorado Springs apartment vacancies hit 12-year low as rent hits all-time high

Colorado Springs apartment vacancies hit 12-year low as rent hits all-time high

During the second quarter this year, the average apartment rent in the Colorado Springs metro area rose to an all-time high while the apartment vacancy rate fell to the lowest rate reported since the third quarter of 2001.

According to a report released today by the Colorado Division of Housing and the Apartment Association of Southern Colorado, the average rent in the Colorado Springs metro area rose year over year for the fourteenth quarter in a row during the second quarter, climbing 3.9 percent to $807. The second-quarter average rent was up from $776 reported during the second quarter of 2012, and was up from this year’s first-quarter average rent of $787.  

The average rent increased year over year in all regions except the Northeast where the average rent was flat. The largest increase in the average rent for any region of the Colorado Springs area was found in the Southeast where the average rent increased 12.2 percent from $638 during the second quarter of last year to $717 during the same period of this year.  The Security/Widefield/Fountain regional also reported a sizable increase in the average rent, with an increase of 6.6 percent from $622 during the second quarter of last year to $664 during the second quarter of this year.

Average rents for all market areas during the second quarter of this year were: Northwest, $872; Northeast, $753; Far Northeast, $901, Southeast, $717; Security/Widefield/Fountain, $664; Southwest, $821; Central, $777.       

“Rent growth had softened during 2012, but the market has clearly tightened again so far this year,” said Ryan McMaken, economist for the Colorado Division of Housing. “A decline in regional unemployment mixed with fairly modest amounts of new home construction has helped drive down vacancy rates and push up rents.”

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 5.4 percent during the second quarter of 2013, falling from this year’s first-quarter vacancy rate of 5.6 percent, and falling from last year’s second-quarter rate of 6.0 percent.  

From the second quarter of 2012 to the second quarter of 2013, the vacancy rate fell in the Northeast, Southeast, Southwest, and Central submarkets. During the same period, the vacancy rate rose in the Northwest, Far Northeast and Security/Widefield/Fountain submarkets. Vacancy rates in the Security/Widefield/Fountain, Southeast, and Central regions have all fallen significantly since 2009 when all three regions reported vacancy rates well above 10 percent.

Vacancy rates for all market areas during the second quarter were: Northwest, 4.6 percent; Northeast, 4.0 percent; Far Northeast, 5.5 percent, Southeast, 8.0 percent; Security/Widefield/Fountain, 5.9 percent; Southwest, 4.4 percent; Central, 5.6 percent.

Tuesday, August 6, 2013

Case-Shiller: Metro Denver home price index pack at peak levels

Case-Shiller released its home price index for May 2013 last week. The home price index for the Denver area rose 1.9 percent percent from April to May , and rose 9.7  percent, year over year, from May 2012 to May 2013.  The year-over-year increase in May was the seventeenth year-over-year increase in a row for Denver. May also marks a return to peak levels for the metro Denver index. The index peaked in July 2006 at 140.3, and the index value during May 2013 was 140.9. The first graph shows the recent increase to new peak levels:

 According to S & P's press release, home prices nationwide continued to show some signs of growth:
“Home prices continue to strengthen,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Two cities set new highs, surpassing their pre-crisis levels and five cities – Atlanta, Chicago, San Diego, San Francisco and Seattle – posted monthly gains of over three percent, also a first time event.  
“The Southwest and the West saw the strongest year-over-year gains as San Francisco home prices rose 24.5% followed by Las Vegas (+23.3%) and Phoenix (+20.6%). New York (+3.3%), Cleveland  (+3.4%) and Washington DC (+6.5%) were the weakest. Monthly numbers before seasonal  adjustment showed all 20 cities experienced rising prices. San Francisco (+4.3%), Chicago (+3.7%)  and Atlanta (+3.4%) were the leaders. However, two cities – Cleveland and Minneapolis were down slightly after seasonal adjustment. 
In year-over-year comparisons for May, all of the twenty cities measured reported increases.  The largest increases were in Las Vegas and San Francisco with year over year increases of 23.3 percent and 24.5 percent, respectively.

The first 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 metro Denver index value is at the highest value seen since 2006.

The 20-city composite is down 24 percent since it peaked in July 2006, but the Denve rindex is up 0.5 percent from its August 2006 peak.

The second 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 December was positive for the eleventh month in a row.

After many months of higher growth rates in Denver than in the 20-city index, the Denver index was surpassed in March 2013 as the 20-city index YOY growth rate rose to 10.9 percent. The composite index growth rate has now outpaced the Denver metro rate for three months.

For the third graph, I've extended the time frame back to 1997, and you can see that for metro Denver, the growth rate back in the dot-com boom days of the late 90s was quite high, even reaching to nearly 15 percent. 

The index went negative as the economy began to slow in 2007 and remained negative until 2012 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, mortgage rates hit historic lows, household formation continues, and rental housing continues to become more expensive.