Thursday, January 30, 2014

Case-Shiller: Growth in home price index in metro Denver begins to slow

Case-Shiller released its home price index for November 2013 this week. The home price index for metro Denver increased 8.8 percent, year over year, which was the smallest year-over-year increase for any month since December 2012.

The first graph shows the year-over-year change in the index for each month since 2006. We can see that although November's change was down compared to recent months, it nonetheless continues a trend in sizable increases in the home price index for metro Denver. We must go back to late 2001 to find similar growth rates. In that case, index growth was weakening as the region headed into the 2002 recession in Colorado.

The second graph shows the year-over-year growth rates for each month for both metro Denver and the 20-city composite index. In this case, we see that the growth rate has continued to climb for the 20-city  index while it has flattened and fallen in recent months in the metro Denver area. The metro Denver index has shown positive growth year-over-year for the past 23 months. For much of 2010 and 2011, the metro Denver growth exceeded that of the 20-city index. 

Recent growth in the 20-city index, is driven by large growth rates in San FRancisco, Las Vegas, and a few other cities. According to the Case-Shiller press release:

“November was a good month for home prices,” says David M. Blitzer, Chairman of the Index  Committee at S&P Dow Jones Indices. “Despite the slight decline, the 10-City and 20-City
Composites showed their best November performance since 2005. Prices typically weaken as we  move closer to the winter. Las Vegas, Los Angeles and Phoenix stand out as they have posted 20 or  more consecutive monthly gains.
The index itself is near all-time highs in November, and has fallen off the September 2013 peak only slightly over the following two months. The next graph shows that the index is now above the old 2006-2007 peak levels, and is well above the recent lows in 2011 and 2012.

Housing News Digest, January 30

Colorado shifts mortgage-settlement funds to boost affordable housing A $23 million chunk of Colorado's share of the $25 billion federal mortgage banking settlement is being reallocated to help provide affordable housing — especially for residents of counties hammered by floods and wildfires. Colorado Attorney General John Suthers announced the shift Tuesday, saying rental vacancies have dwindled and too many displaced residents still are struggling to find new homes.

  Colorado housing market slows DENVER -- The Colorado Association of Realtors says housing markets across Colorado slowed in the fourth quarter. According to the Denver Post ( ), housing activity was weakest in the state's mountain-resort counties, which suffered a 15 percent drop in listings and a 14 percent drop in sales in the fourth quarter.

  Increased affordable housing funding under consideration in Colorado legislature DENVER - Colorado lawmakers are considering increasing funds for the development of more affordable housing in the aftermath of flooding and wildfires last year. A bill getting its first hearing Wednesday would pay for the construction of up to 800 affordable housing units. The proposal would also allow the state to use a portion of a grant fund for temporary housing and foreclosure prevention

  Marijuana Market Widens Colorado Housing Market DENVER (CBS4)- Real estate agents are hoping to capitalize on Colorado’s marijuana industry– selling homes to out-of-state buyers trying to move to the state for retail pot sales. Real estate agent Bob Costello sees a whole new market in marijuana.

  Colorado Springs home sales for 2013 hit highest level in seven years Colorado Springs-area home sales in 2013 jumped to their highest level in seven years, even as sales fell in December for the second straight month, according to a Pikes Peak Association of Realtors report this week. Local sales of single-family homes - excluding townhomes and condominiums - totaled 10,786 last year, a nearly 18 percent increase over 2012 and the most since 11,911 sales in 2006, the association's figures show.

Monday, January 27, 2014

Trulia: asking rents down in Colorado Springs, but accelerate upward in metro Denver

According to the Trulia price monitor and rent monitor, metro Denver continued to show sizable increases in both asking rents and asking prices for housing. The asking rent in metro Denver increased 7.6 percent from December 2012 to December 2013, and the asking price for for-sale housing increased 10.8 percent over the same period. This is one of the largest increases in the asking rent in several months.

In Colorado Springs, on the other hand, growth was less robust with the asking price increasing 5.3 percent, when measured from December 2012 to December 2013. The asking rent decreased during the same period dropping 0.6 percent, which was one of the larger declines seen in Colorado in several months.

Colorado Springs lagged the nation in both asking rents and asking prices for the period from December 2012 to December 2013. According to the Trulia index, the asking rent rose 3.0 percent nationally while the asking price rose 11.9 percent.

Saturday, January 25, 2014

Study on Colorado Front Range Water Availability

The Global Water forum has published an interested study on water availability in American cities. The short study's conclusions, found here, do not list Colorado cities among the most high risk cities for water shortages. The Denver area is at risk if we include only runoff water, the study notes, but when the cities storage facilities and alternative sources are considered, the risk of shortage is significantly lower. Among the 20 highest-risk cities, most tend to be in California or desert communities far from mountain water sources. 

Friday, January 24, 2014

Denver Tops Colorado Metros in US Mayors Survey of Employment and Growth

The U.S. Conference of Mayors has released its economic briefing for 2014, with rankings of 363 metro areas for economic growth (gross metropolitan product, GMP) and employment growth. Colorado metro areas rank as follows:

Out of 363:

Economic Growth

Boulder, 84
Colorado Springs, 220
Denver, 49
Ft. Collins-Loveland, 210
Grand Junction, 283
Greeley, 138
Pueblo, 209

Employment Growth

Boulder, 40
Colorado Springs, 131
Denver, 30
Ft Collins-Loveland, 87
Grand Junction, 229
Greeley, 86
Pueblo, 216

Monday, January 20, 2014

Buildfax: November remodeling activity in West region down 30 percent from November 2012

From the latest Buildfax release:

Residential remodels authorized by building permits in the United States in November were at a seasonally-adjusted annual rate of 2,542,000. This is 20% down from the revised October rate of 3,185,000 and is 18 percent below the November 2012 estimate of 3,087,000.
Regional Residential Remodeling. 
Seasonally-adjusted annual rates of remodeling across the country in November 2013 are estimated as follows: Northeast, 614,000 (down 12% from October and down 29% from November 2012); South, 1,301,000 (up 1% from October and up 7% from November 2012); Midwest, 486,000 (down 31% from October and down 28% from November 2012); West, 546,000 (down 35% from October and down 30% from November 2012).
The index fell of significantly in November:

Monday, January 13, 2014

Corelogic: Colorado home price index up 8.6 percent in November

CoreLogic released its November home price index (HPI) numbers this week. The year-over-year change in November was 8.6 percent in Colorado.  December marks the twenty-third month in a row of year-over-year gains in the home price index for Colorado. The national home price was again pulled upward by big home price growth in California, Arizona, and Nevada. Nationally, the index grew 11.8 percent from November 2012 to November 2013. Housing prices continue to increase at some of the largest rates seen since before the financial crisis. (These numbers are for all single-family homes, including distressed properties.) We can see that since April 2013, the national index has been outpacing the Colorado index.

16 states had larger growth rates in the HPI than Colorado, with the highest growth rates being in Nevada, and California. Nevada's HPI grew 25.3 percent year over year, and California's HPI grew 21.3 percent. Only Arkansas, with a year over year drop of 1.1 percent, showed a decline in the HPI.

Friday, January 10, 2014

Philly Fed: Colorado Coincident Index now tracking with national index

According to the Philadelphia Fed, the coincident index in Colorado increased 3.6 percent, year over year for November 2013, which was the second-lowest growth rate in the index since July 2012. The moderation in Colorado index puts Colorado closer to the national index growth rate of 3.0 percent, and the Colorado index has slowly been heading down to be closer to matching the national growth rate since January. The first graph shows the year-over-year change in the coincident index for Colorado and the nation:

The second graph shows that in the 3-month change in the coincident index, Colorado has also been moving down to match the nation's growth rates.  This trend has been in place since the end of 2012.  In early 2012, Colorado's index growth was growing at much higher rates than the nation. The second graph shows the 3-month change in the Colorado index and the national index: 

Economic activity in Colorado was relatively strong in 2012 compared to the nation overall. During 2013, however, Colorado's economy moderated while the rest of the nation appears to have gathered some steam. Both Colorado and the nation report growth in all months since 2010. It's just that Colorado, while it once enjoyed a position of robust growth compared to the nation, now appears to be more or less matching the national growth rates. At least according to this index. 

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Wednesday, January 8, 2014

November 2013 bankruptcies down 17 percent

According to the US Bankruptcy Court in Colorado, The number of bankruptcies filed in Colorado during November 2013 was down year over year by 17 percent, and the 12-month moving average continued to move down.

There were 1534 bankruptcy filings during November, compared to 1851 during November of 2012. The first graph shows YOY change for each month. The year over year change has been negative for the past 34 months.

The second graph shows the 12-month moving average for bankruptcies. Clearly, the overall trend is downward, with bankruptcies peaking and 2011, and total falling since.

Thursday, January 2, 2014

Housing News Digest, January 2

Denver-area apartment rents are expected to keep climbing in 2014 Rents in metro Denver are expected to grow 4.9 percent by the end of 2014, despite some 7,400 new market-rate apartments becoming available in the area, according to Hendricks-Berkadia's "Forecast 2014" report. “Construction output will peak [in 2014] as builders add 7,400 market-rate rentals,” the research report states. “Deliveries will fall to an estimated 5,500 units" in 2015.

  New homeless shelter for families set to open in Durango Though the shelter will provide another option for homeless families, Winter Haven initiators and service providers say significant strides are needed in data collection and provisions for Durango’s homeless population, which they say has begun to rise in recent years. “Right now, human-service agencies are saying to me that they have quite a few families who spend nights in their car in the Walmart parking lot or other places,” West said. “That’s how it came to be said that we need a place for them in Durango so that they can be warm and safe.”

  United Van Lines' Annual Migration Study Those are the key findings from United Van Lines' 37th Annual Migration Study, which tracks the states the company's customers move to and from during the course of the year. The study found that Oregon is the top moving destination of 2013, with 61 percent of moves to the state inbound ones. And after 16 consecutive years at or near the top of the outbound list, Michigan appeared in the balanced category for 2013. Michigan had claimed the top outbound spot from 2006-2009. The District of Columbia (57 percent inbound) fell to the number five position on the inbound list after five consecutive years as the top moving destination. New additions to the 2013 top inbound list include South Dakota (57 percent), Texas (56 percent) and Colorado (55 percent).

  Colorado pot laws help Mile-High City's appetite for real estate to grow even higher FORTUNE -- Kelly Brough, president and CEO of Denver Metro Chamber of Commerce, is not happy talking about legal marijuana, the booming industry now nudging its way into the Denver business world. She is quick to point out all the steps made by the chamber to protect existing Denver businesses from any negative effects, real or perceived, of the rapidly expanding marijuana business. "We were not supportive" of legalization efforts, Ms. Brough says. "But when it passed, we wanted to make sure it was done smart and right."

  Mountain Law: Real estate brokers and sellers take note: Seller financing just got harder Those familiar with the standard real estate forms promulgated by the Colorado Real Estate Commission will notice a change on the 2014 contracts. Previously the contracts contained “fill in the blanks” for the buyer and the seller to agree to the terms of seller financing, but no longer. Why the change? In brief, the commission decided that seller financing is getting too complicated for real estate brokers and their clients to handle without legal advice. The reason is something called the “Ability to Repay” (ATR) rule promulgated by the Consumer Financial Protection Bureau (CFPB).