Friday, February 28, 2014

Request for Bids: Metro Denver "Single-Family" Vacancy and Rent Survey

Closes March 5, 2014 

You must bid through the bidscolorado.com system. Look under Department of Local Affairs. 

Description: 

Vendors not registered in the Colorado BIDS systems will not be able to access the attached files or be able to submit a response for consideration.

The Division of Housing (DOH) is a statewide housing agency which operates within the Colorado Department of Local Affairs.  DOH is seeking surveys of metro Denver rents and vacancies in single family homes, duplexes, triplexes, fourplexes, townhomes, and condos. The data sets from these surveys will assist the DOH staff and the State Housing Board members in making funding decisions of affordable housing projects, to evaluate success and to identify the most at-need communities. 

All questions must be via email attn: brenda.lujan@state.co.us no later than the 3rd of March at 2pm. 2: Respondents to this solicitation shall ensure ALL emailed responses arrive no later than 2pm on March 5th MT. Any submissions received after this date will not be considered for award. 3: If modifications are made to the solicitation, it is the sole responsibility of the respondent to monitor the BIDS site and make changes to their submission accordingly. Failure to retrieve such modifications (if any) and to include in responses, may result in the disqualification of the response. 4: All submission requirements are noted in the attached specifications and bidders are expected to evidence ability to meet the Scope of the Work described. 5: Questions submitted and DOLA responses will be posted as a modification on BIDS prior to the submission deadline

Housing News Digest, February 28

NoCo foreclosure rates down 42 percent Northern Colorado experienced a 42 percent decrease in foreclosures from Jan. 2013 to Jan. 2014 compared year over year. Data released today by the Colorado Division of Housing shows a statewide decrease year-over-year with foreclosure filings down by 34.3 percent from Jan. 2013 to Jan. 2014, and foreclosure sales down by 37.1 percent during the same time period.

Average rent continues to rise in Springses  Average apartment rent rose in the Colorado Springs metro for the 16th consecutive quarter (year over year) at the close of 2013, according to a report released Friday by the Colorado Division of Housing and the Apartment Association of Southern Colorado. The report indicated that the average rent for Springs residents rose $9 (or 1 percent) to $799 compared to the same quarter of 2012. Although the year-over-year rate has increased for 16 straight quarters, the report specified that average rent is down from $830 during the third quarter of 2013.

  Front Range foreclosure filings jump 51% in January Foreclosure filings in 12 Front Range counties jumped 51 percent in January from a record low number in November, the Colorado Division of Housing reported Friday. "We can blame a lot of it on seasonality," division of housing economist Ryan McMaken said on Friday.

  Colorado Sprints apartment rise in fourth quarter, although not as dramatically as in the past Apartment rents continued to rise in the Colorado Springs area late last year, although not quite as fast as they have of late, according to a Colorado Division of Housing report released Friday. Rents averaged $799.67 a month in the fourth quarter of 2013, a nearly $9 or 1.1 percent increase over the same period a year earlier, the report showed.

  Institutional investors buying homes in Denver at increasing rate Institutional investors — non-lender buyers who have purchased 10 or more homes over the past 12 months — have hit the Denver real estate market in a big way during the past year, according to RealtyTrac. In a report released Thursday, RealtyTrac said institutional investor activity in metro Denver was 20.1 percent higher in January than a year ago. By contrast, institutional investor purchases nationally reached a 22-month low in January.

Colorado foreclosures increase in January from November’s lows

Foreclosure filings were down 34.3 percent in Colorado metro counties during January 2014, falling to the lowest level recorded in any January since the Division of Housing began collecting monthly totals in 2007.  According to a report released Friday by the Colorado Division of Housing, foreclosure auction sales in Colorado’s metropolitan counties were down 37.1 percent in January 2014 compared to January of last year, dropping from 930 to 585.  Over the same period, foreclosure filings dropped from 1,456 to 957. 

While down year over year, foreclosure filings and sales have increased month over month for the past two months. Both filings and sales hit new lows during November 2013, but since then, filings are up 51 percent, and sales are up 45 percent.  

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.

“It may be that foreclosure totals bottomed out for the time being during November, and will move back up over the next year,” said Ryan McMaken, an economist with the Colorado Division of Housing. “Even if 2014 has more foreclosures than 2013, we’ll still likely be looking at levels well below what we saw from 2006 to 2011.”

All counties surveyed except Mesa County showed decreases in foreclosure auction sales during January when compared to January of 2013. The counties with the largest decreases in foreclosure auction sales, year over year, were Broomfield County and Larimer County where auction sales decreased by 81.8 percent and 55.6 percent, respectively. Mesa County, reported an increase of 18 percent over the same period.

The county with the highest rate of foreclosure sales during Jannuary was Mesa County with a rate of 989 households per foreclosure sale. Pueblo County came in second with 1,225 households per foreclosure sale. The lowest rate was found in Broomfield County where there were 11,176 households per foreclosure sale.

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. 

Colorado Springs apartment vacancies fall, but rent growth slows

During the fourth quarter this year, the average apartment rent in the Colorado Springs metro area rose, year over year, for the sixteenth quarter in a row. According to a report released Friday by the Colorado Division of Housing and the Apartment Association of Southern Colorado, the average rent in the Colorado Springs metro area rose to $799, up 1 percent from 2012’s fourth-quarter average rent of $790. The fourth quarter’s average rent was down, however, from 2013’s third quarter average rent of $830.

The average rent increased year over year in all regions of metropolitan Colorado Springs surveyed except the Southwest region. The largest increase in the average rent for any region was found in the Northeast where the average rent increased 5.4 percent from $721 during the fourth quarter of 2012 to $760 during the same period of 2013.  The Security/Widefield/Fountain region reported the second-largest increase in the average rent, with an increase of 4.6 percent from $598 during the fourth quarter of 2012 to $626 during the fourth quarter of 2013.

Average rents for all market areas during the fourth quarter of this year were: Northwest, $850; Northeast, $760; Far Northeast, $917, Southeast, $727; Security/Widefield/Fountain, $626; Southwest, $805; Central, $745.

“Demand for apartments softened during the fourth quarter as it usually does, but overall, 2013 saw some solid increases in average rents," said Ryan McMaken, an economist with the Colorado Division of Housing. "The rate of increase in rents during the fourth quarter was the smallest we've seen in a couple of years, though, reflecting the effects of new apartment construction and a flat employment situation." 

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 6.0 percent during the fourth quarter of 2013, falling from last year’s fourth-quarter rate of 7.1 percent. This year’s fourth quarter vacancy rate was up from the third quarter rate of 5.4 percent.

From the fourth quarter of 2012 to the fourth quarter of 2013, the vacancy rate fell in the Northeast, Southeast, and Central submarkets. During the same period, the vacancy rate rose in the Northwest, Far Northeast, and  the Secuirity/Widefield/Fountain region.  The vacancy rate was flat in the Southwest region. The region with the highest vacancy rate was the Far-Northeast region at 7.7 percent, and the region with the lowest vacancy rate was the Southwest region at 4.8 percent.

"New apartment unit construction does have an impact. If we include brand new projects that are leasing up in the region, the vacancy rate metro-wide is actually 7.1 percent, and it's 13 percent in the Far-Northeast where many new units are," McMaken said. "El Paso County was also the number one county for new single-family homes permitted in 2013, and new homes in the area do have an impact on apartment occupancy." 


Vacancy rates for all market areas during the fourth quarter were: Northwest, 5.1 percent; Northeast, 5.2 percent; Far Northeast, 7.7 percent, Southeast, 6.9 percent; Security/Widefield/Fountain, 5.3 percent; Southwest, 4.8 percent; Central, 5.6 percent.

Friday, February 21, 2014

Denver-Boulder-Greeley CPI up 2.7 percent in second half of 2013, driven by rent and fuel

During the second half of 2013, the consumer price index in the Denver-Boulder-Greeley area was up 2.8 percent compared to the second half of 2012. The first graph shows the year-over-year change in the Denver-Boulder-Greeley CPI going back to 2000. We can see that the CPI growth is well within the usual range over the past decade:


The second graph shows the growth from each period to the next. (The most recent period is the change from the first half of 2013 to the second half of 2013):

In this case, we also see a moderate change. From the first half of 2013 to the second half of 2013, the CPI rose 1.4 percent. 

Within the index's component, found here, we see that the categories showing the largest increases in prices were energy and housing, with rent up 7.3 percent (year over year) and fuels and utilities up 13.7 percent over the same period. Division of Housing data showed a 6.4 percent increase in the average rent from the 4th Q of 2012 to the 4th Q of 2013. 

Given that both are essential items, these increases can have a significant effect on household budgets. 

The Denver Post reported on this yesterday. 


Housing News Digest, February 21

Higher housing costs levitate Denver-Boulder inflation rate Higher rents and skyrocketing natural-gas prices overcame a drop in gasoline prices to push the overall Denver-Boulder-Greeley Consumer Price Index up 2.8 percent in the second half of 2013, the U.S. Bureau of Labor Statistics reported Thursday. Shelter costs, which have a heavy weighting in the index, rose 4.9 percent and were the biggest driver of inflation in the second half of the year, according to the report.

  Fitzsimons urban renewal area plan amended to finance blight area The large financial appetite of the Fitzsimons Life Science District on the Anschutz Medical Campus has forced Aurora city planners to dissect the original 578-acre redevelopment site into smaller projects with fresh public finance options. "As the Health Science District continues to grow and expand, redevelopment activity in the Fitzsimons boundary area ... has lagged behind what was initially projected for the area," said Andrea Amonick, director of development services in Aurora.

  Embrey Begins Construction on First Multi-Family Development in Ken Caryl in More Than a Decade DENVER — Construction has begun on the first apartment community ever to be built in Denver, Colorado’s prestigious Ken Caryl Ranch neighborhood. It’s the first such development in the submarket in the past 13 years. Designed and built by San Antonio-based Embrey Partners, the first units are scheduled for occupancy in early 2015.

  Pembrook Capital Management Provides $18.577 Million Bridge Loan for Acquisition of Mountain Vista Multifamily Property in Lakewood, Colorado NEW YORK, Feb. 18, 2014 /PRNewswire/ – Pembrook Capital Management, LLC (Pembrook), a commercial real estate investment manager that provides financing throughout the capital structure including first mortgages, mezzanine, bridge loans, note financings, and preferred equity for most property types, announced the closing of an $18.577 million bridge loan to facilitate the acquisition of Mountain Vista, a 98% occupied, 257-unit multifamily property located in Lakewood, Colorado, a submarket of Denver. The funding from Pembrook will allow the buyer to acquire the property and complete interior renovations to the apartment units. In addition, the buyer will also be able to finalize exterior renovations that include clubhouse/office construction, roof replacements, repairs to stair landings and catwalks, asphalt repairs, clubhouse equipment/furniture, and exterior paint.

  Axiometrics Reports Apartment Effective Rent Growth Weakening in Urban Core as 2014 Deliveries Begin Effective Rent Growth and Occupancy Axiometrics' latest report shows that annual effective rent growth in January was essentially flat as compared to December's rate of 2.7%. One year ago the annual growth rate was 3.6%, and it has slowed in eight of the last 12 months. The national rent growth rate peaked at 5.3% in June 2011. Out of the top 121 MSAs, 24 had annual effective rent growth in January greater than 5.0%, with markets in Florida, California and Colorado continuing their recent strong increases. Naples ranked first with an annual growth rate of 14.5%, followed by Santa Rosa at 9.2% and San Jose at 8.8%. Other MSAs with an annual growth rate greater than 5.0% included: Portland, OR (8.6%) Oakland, CA (8.3%) Miami, FL (7.9%) North Port, FL (7.5%) Boulder, CO (7.2%) Denver, CO (7.1%) San Francisco, CA (6.1%)

Thursday, February 20, 2014

New mortgage delinquencies hit 8-year low in Colorado during 4th quarter

Serious mortgage delinquencies in Colorado increased slightly from the third quarter to the fourth quarter of 2013, ending eighth quarter in a row of falling 90-day delinquency rates. During the fourth quarter, the 90-day delinquency rate was 1.5 percent in Colorado. The rate was 1.47 percent during the third quarter of 2013. Practically, speaking, however, the 90-day delinquency rate has been flat for the past three quarters. It has also been flat at the national level. The national 90-day delinquency rate was 2.55 percent during the fourth quarter of 2013, and it was 2.57 percent during the third quarter.

The first graph shows the 90-day delinquency rates since 2005:



30-day delinquencies for the fourth quarter of 2013 were at the lowest percentage recorded during any other fourth quarter in 8 years, dropping to 2.12 percent. The rate was 2.21 percent during the 3rd quarter of 2013, and it was 2.18 percent during the fourth quarter of 2012.  A new low in 30-day delinquencies suggests more declines in foreclosure activity in Colorado, at least in the short term.



The foreclosure inventory also fell during the fourth quarter of 2013 in Colorado and has fallen for the past thirteen quarters in a row. Colorado's foreclosure inventory dropped to 0.96 percent during the fourth quarter of 2013, falling from 2012's fourth quarter rate of 1.41 percent. The inventory was also down from 2013's third-quarter rate of 1.08 percent. The third graph shows the foreclosure inventory in Colorado and the US:



National Comparisons:

As can be seen in the first and third graph, Colorado's foreclosure inventory and 90-day delinquency rates are well below the national rates.

The U.S. foreclosure inventory rate was 2.86 percent during the fourth quarter of 2013.

Using the 90-day delinquency rate to compare Colorado to all other states, we find that Colorado had the seventh-lowest delinquency rate in the nation during the fourth quarter of 2013. The only states with lower 90-day delinquency rates were Idaho, 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 0.54 percent, and the highest rate was found in Nevada where it was 3.99 percent.

Delinquencies are measured by the MBA via surveys sent to major loan servicers. The MBA estimates it covers 88 percent of all first-lien residential mortgage loans outstanding in the US with the survey.

Work force declines affecting fall in unemployment rate in Colorado

In December, the unemployment rate in Colorado fell to the lowest level seen since 2008. It was 5.9 percent for the state in December, compared to 6.1 percent during November 2013, and 7.5 percent during December 2012.


It is often assumed that the unemployment rate relies primarily on job creation numbers, but the size of the labor force is just as important. 

We know that in recent months, the labor force has shrunk in Colorado, and this has been a significant factor in the declining unemployment rate. 

The second graph shows both the total labor force size the total employment, according to the household survey.  Note that in December, the labor force was back to March 2012 levels. 


So, the labor force has not changed much in more than 18 months, and with some moderate growth in total employment during that time, this has really pushed down the unemployment rate, and has tended to give the impression that growth growth is more robust than it really is. Note that, according to the household survey, employment remains 40,000 employed persons below the July 2008 peak. 

The third graph looks at year over year change in labor force size. I've smoothed this out by using a 3-month moving average, and in this case, we find that over the past two months, the labor force has gone down, year over year. Indeed, during December, the labor force was down by about 10,000 people, year-over-year. 


The next graph looks at the labor force by month going back about ten years. This makes it easier to see that December 2013 had a smaller labor force than December 2012. December 2013's labor force was about the same size as December 2011, although it was certainly up from 2009 and 2010 levels. This just shows us that even if we're taking seasonal factors into account, the labor force is quite flat.



Theoretically, the unemployment rate can go down even when employment is falling, as long as labor force falls by more than employment. Fortunately, this has not been the case. While the fall in the labor force size has exaggerated the employment gains, there have nonetheless been increases in employment. The last graph shows that December 2013's employment level was the highest level seen in December since 2008. In other words, December 2013's employment level was at a 5-year high. Total employment grew, year over year, by 30,000 employed persons, which is a moderate rate of growth compared to most months since 2011. 

A note on seasonality in foreclosures

With the end of 2013, I've gone in and calculated an average foreclosure total for each month in both foreclosure filings and sales. Each month in the graph below shows the average total for each month based on data from 2007 through 2013:


With foreclosure filings, the most active month is March, and from there filings activity declines until September. Lenders appear to like getting in a number of filings before the end of the calendar year in December.

With auction sales, the seasonal issues are different. In this case, the most active month for completed foreclosures is January, and the least active month is December. It appears that lenders like to avoid repossessing houses in December. Sales activity is also strong in August and late summer in general.

Generally speaking, this trend holds in many years, as we can see in the next graph. Here we can see each year separated out by month:


Although there are far fewer foreclosures in recent years than was the case 6 or 7 years ago, March and April appear to be very active months in most cases, compared to the other months. 

With foreclosure sales,  January has retained it's spot as a big month, as has August: 


Note: I update these last two graphs every month in the monthly foreclosure report. 

Housing News Digest, February 20

Colorado mortgage refi frenzy hit brakes in fourth quarter Colorado saw the number of home loans paid off during the fourth quarter plunge, but the state still managed to end 2013 with loan turnover up 13.2 percent. "There was so much refi and sales activity during the first half of the year though, that 2013 ended up being a bigger year than 2012 overall," said Ryan McMaken, an economist with the Colorado Division of Housing, in a statement.

  Paid off home loans declines over last quarter (CSBJ) In El Paso County, the change went from 11,619 releases in the fourth quarter of 2012 to 7,299 in the fourth quarter of 2013, a decrease of 37.2 percent, according to figures released by the state. Releases of deeds in the third quarter of 2013 was 10,659. Compared with the 7,299 of the fourth quarter, it is a decrease of 31.5 percent.

  Real estate developers partner with Colorado oil and gas producers Real estate developers are learning to swim with, rather than against, the growing tide of oil and gas activity in the Denver-Julesburg basin. "Until four or five years ago, we were acquiring mineral rights to play defense. We didn't want anyone to come and screw up our land," said Jay Hardy, general manager at Loveland-based McWhinney, which is developing 3,000 acres along U.S. 34 and Interstate 25. Hardy said the developer is now on the offensive, working closely with Anadarko Petroleum Corp. to extract petroleum as it builds out its massive Centerra project and the newer and smaller North Park development in Broomfield.

  University of Colorado to sell Denver medical campus to developer DENVER - The abandoned University of Colorado medical center at Ninth Avenue and Colorado Boulevard will be sold to developers in a $30-million deal approved by the CU board of regents Thursday. The university system says the nearly 26-acre property that used to be its health sciences center is to be purchased by a local developer called Continuum Partners.


Fewer homes seized in Mesa County Foreclosure activity in Mesa County dropped in 2013 to its lowest level in several years, but a weakening of the labor force and a slow-to-recover housing market means the county continues to lag behind most other areas of Colorado. New foreclosure auction sales — homes that have proceeded through the full foreclosure process to final sale at public auction — fell 33 percent from 2012 to 2013, according to a report released Thursday by the Colorado Division of Housing. The 564 sales last year were the fewest since 2009. New foreclosure filings — the beginning of the foreclosure process, in which the borrower has roughly four months to work with the lender to avoid a sale at auction — tumbled 37 percent in 2013, the fewest since 2008.

Home loan payoffs down 28 percent during fourth quarter of 2013

The number of home loans paid off in Colorado was down 28.2 percent from the fourth quarter of 2012 to the fourth quarter of 2013, but comparing the full year of 2013 to 2012, the total was up 13.0 percent. According to a report released Wednesday by the Colorado Division of Housing, public trustees in Colorado released a total of 62,312 deeds of trust during the fourth quarter of 2013, compared to 86,816 released during the fourth quarter of 2012. 

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 generally indicate increases in the demand for home loans and real estate.

For the full year of 2013, releases of deeds rose to 344,942, and were at the highest level recorded since 2005 when releases totaled 400,565.   

“The fourth quarter of 2013 saw some big drops in release activity in response to interest rates heading up during the second half of the year," said Ryan McMaken, an economist with the Colorado Division of Housing. "There was so much refi and sales activity during the first half of the year though, that 2013 ended up being a bigger year than 2012 overall." 

Trends in release activity were not uniform across the state, although 20 of the 21 counties surveyed for the study reported decreases in release activity from the fourth quarter of 2012 to the same period of 2013. The largest decreases were reported in Boulder and Mesa counties where release activity decreased 48.1 percent and 49.1 percent, respectively. The only increase for the period was in Alamosa County where releases rose 20.9 percent, and the smallest decrease was found in Jefferson County where releases fell 7.0 percent.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity were Summit, Douglas, and Jefferson counties. The counties with the least activity were Fremont, Pueblo and Delta counties.

“We see a similar pattern here to what we see with many other housing indicators," McMaken said. "Metro Denver and northern Colorado's high release activity reflect a relatively high demand for real estate while other areas, such as Pueblo and Grand Junction, are showing less activity."
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.

A deed of trust is similar to a mortgage and is a lien on real property to secure payment of an indebtedness. The deed of trust contains a grant of the property to the public trustee for the benefit of the holder. The deed of trust is released when the debt is paid in full. 


A deed of trust is similar to a mortgage and is a lien on real property to secure payment of an indebtedness. The deed of trust contains a grant of the property to the public trustee for the benefit of the holder. The deed of trust is released when the debt is paid in full. 

Wednesday, February 19, 2014

Colorado multifamily permits up 27 percent in 2013, single-fam permits up 22 percent

The Census Bureau released December housing permit totals earlier this month, and we see few surprises here with a continuation of the overall growth trend we've seen since 2009.

The first graph shows month-to-month totals for single-family and multifamily permits. We see the overall upward trend and a clear seasonal pattern in single-family. Single-family has already peaked for the year. Comparing December 2013 to December 2012, single-family permits were up 44.1 percent and multifamily permits were up 27.7 percent.

Month to month numbers can be very volatile, however, so if we look at the full year combined, as we see in the second graph, we find that single-family permits increased 22 percent, and multifamily permits increased 27 percent. This is a solid, but much more moderate, increase than what we saw in permit growth from 2011 to 2012 when multifamily permits rose by 99 percent. From 2011 to 2012, single-family permits grew 42 percent.  YTD through December: 

The third graph shows single-family permits separated out by month and year. Note that December 2013's single-family total was at a seven-year high for the month. We have to go back to December 2006 to find a more active December for single-family permits. There were 1,152 single-family permits during December 2013 and 902 during December 2012. 

The last graph shows multifamily monthly totals, and in this case we see that December 2013 was also a very active month for multifamily permits compared to previous Decembers. In this case, December 2013 was a six-year high in multifam permits,  and was up to 1,248 during December 2013 from December 2012's total of 866. 


Not surprisingly, growth in permits is not matching that of last year, which was a very heated year in terms of growth over 2011. Nevertheless, the numbers point toward continued growth in new housing production for now.

41 percent of multifamily permitting in 2013 occurred in Denver County alone

According to the Census Bureau, new county-by-county permit data through December shows that 41 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 were 4,330 multifamily permits issued in Denver County in 2013. That's 41 percent of the 10,457 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, Boulder, 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-Dec 2013):

Adams 0
Arapahoe 1,788
Boulder 843
Broomfield 540
Denver 4,330
Douglas 446
El Paso 636
Jefferson 736
Larimer 840
Mesa 0
Pueblo 0
Weld 282


Year-to-year growth: 

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

Adams -100 percent
Arapahoe +139 percent
Boulder +80 percent
Broomfield -70 percent
Denver -0.5 percent
Douglas -24 percent
El Paso +6.5 percent
Jefferson +390 percent 
Larimer +21 percent
Mesa No change (zero)
Pueblo  -100 percent
Weld +729 percent 

See here for full data. 


75 percent of single-family permits in 2013 in just six counties

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

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

Douglas 19.0
Broomfield 15.3
Weld 15.2
El Paso 11.7
Larimer 12.1
Mesa 7.5
Arapahoe 5.1
Adams 5.9
Jefferson 4.3
Denver 4.8
Boulder 2.7
Pueblo 2.4

Of the 13,678 new single-family permits issued this year through December, 75 percent were issued in Arapahoe, Denver, Douglas, El Paso, Larimer, and Weld counties alone. 20 percent of all single-family permitting was reported in El Paso County 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.

New single-family permits during January-December 2013:
El Paso 2,836
Douglas 1,985
Larimer 1,489
Weld 1,396
Denver 1,308
Arapahoe 1,170

Also:
Adams 943
Boulder 843
Broomfield 338
Jefferson 951
Mesa 439
Pueblo 158

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

Among metropolitan counties, the largest year-over-year (2012-2013) increases in single-family permit activity were found in Broomfield (111 percent), Weld (35 percent), and Larimer (31 percent). Pueblo reported a year-over-year decline in single-family permits with a drop of 8.1 percent. Most metro counties reported increases in the 19 percent to 25 percent range.

See here for full data.

Tuesday, February 18, 2014

Buildfax: Remodeling index in West up 16 percent

According to the Buildfax press release:
Residential remodels authorized by building permits in the United States in December were at a seasonally-adjusted annual rate of 2,937,000. This is 1% up from the revised November rate of 2,900,000 and is 9 percent above the December 2012 estimate of 2,704,000. 
Seasonally-adjusted annual rates of remodeling across the country in December 2013 are estimated as follows: Northeast, 570,000 (down 7% from November and down 27% from December 2012); South, 1,188,000 (up 1% from November and up 14% from December 2012); Midwest, 548,000 (down 10% from November and down 3% from December 2012); West, 837,000 (up 13% from November and up 16% from December 2012). 

Friday, February 14, 2014

Housing News Digest, February 14

Foreclosures In Colorado Drop To 10-Year Low (CBS4) Foreclosure auction sales last year dropped to the lowest level reported since 2004. According to a report by the Colorado Division of Housing, new foreclosure auction sales in 2013 were down 41.4 percent. “Colorado appears to be reaching the end of this foreclosure cycle,” said Ryan McMaken, economist for the Colorado Division of Housing. “Foreclosure activity is now well below below the crisis levels of 2007 and 2009.”

  Colorado foreclosure activity hits 9-year low in 2013 (Denver Post) McMaken said a lot of what is being seen in the housing market is being driven by low interest rates, monetary policy being decided elsewhere, employment and the lack of a national recession. "We will know ahead of time if we are going to see another surge in foreclosures," said McMaken. "Because before foreclosures surge again, we would see unemployment go up, we would see interest rates go up. ... It is unlikely there will be some unexpected surge there."

  Colorado Springs-area foreclosure activity declined in 2013, mirroring rest of the state The number of properties in El Paso and Teller counties that were sold after falling into foreclosure dropped sharply last year, a decline that mirrored an improving foreclosure picture in the rest of the state, according to a Colorado Division of Housing report released Thursday. Economists and real estate industry experts have pointed to a better economy and a healthier housing market for the decline in foreclosures. In particular, as mortgage rates have fallen, prices have risen and demand has increased for homes, it's been easier for troubled homeowners to sell their properties or refinance - staving off foreclosure.

  Colorado Springs home prices on the rise, national report shows Statistics from the Pikes Peak Association of Realtors have shown that Colorado Springs-area home prices have been on the rise over the last several months. A National Association of Realtors report released this week shows the same trend. Colorado Springs was one of the 119 out of 164 metropolitan statistical areas nationwide that saw a year-over-year increase in median, single-family home prices during the fourth quarter, according to the NAR.

  Colorado foreclosure sales hit 10-year low in 2013(DBJ) All of the state’s 12 metropolitan counties reported year-over-year declines in the number of foreclosure auction sales from 2012 to 2013. Auction sales dropped the most in Douglas and Denver counties, falling 50.2 percent and 49.8 percent, respectively. Several mountain counties were found among the state’s counties with the highest foreclosure rates for the fourth quarter, including Archuleta, Park, and Gunnison counties. On other end of the spectrum, Boulder reported only 30 completed foreclosures for the quarter, for a foreclosure rate of only one foreclosure for every 4,109 households.

Thursday, February 13, 2014

Foreclosures in Mesa County, 2003-2013

We released the 2013 foreclosure numbers today. Foreclosure activity in Mesa County over the past eleven years has changed dramatically. The first graph below shows the foreclosure events for each year:

The peak year in filings was 2010 with 1,672 filings. The peak year for sales was also 2010 with 980 sales. From the peak (as of 2013) filings have fallen 53 percent and sales have fallen 42 percent. But, filings remain up 98 percent from 2007, and sales remain up 422 percent from 2007. 

The second graph shows year-over-year change in foreclosures. Obviously, the big year for growth was 2009 in filings. Both 2009 and 2010 showed big growth in sales. Filings grew 166 percent from 2008 to 2009, and sales grew 223 percent and 172 percent in 2009 and 2010, respectively. From 2012 to 2013, filings fell 37 percent and sales fell 33 percent. 


Monthly foreclosure report for Colorado metro counties

In addition to the quarterly reports, we also release monthly foreclosure reports that analyze foreclosures in metropolitan counties. The December monthly foreclosure report is now online:

Foreclosures in Colorado Drop to Ten-Year Low in 2013

New foreclosure auction sales in 2013 were down 41.4 percent from 2012 in Colorado, falling to the lowest level reported since 2004. According to a report released Thursday by the Colorado Division of Housing, there were 9,318 foreclosure auction sales, or completed foreclosures, reported during 2013, compared to 15,903 during 2012. For 2013’s fourth quarter alone, foreclosure auction sales dropped 56.1 percent from 3,760 during the fourth quarter of 2012 to 1,650 during the fourth quarter of 2013.

New foreclosure filings also fell during 2013, dropping 46.3 percent from 28,579 in 2012 to 15,333 in 2013.  Foreclosure filing totals for the fourth quarter alone this year were down 47.6 percent, falling to 2,981 from 2012’s fourth-quarter total of 5,685.

“Colorado appears to be reaching the end of this foreclosure cycle,” said Ryan McMaken, economist for the Colorado Division of Housing. “Foreclosure activity is now well below below the crisis levels of 2007 and 2009."

All of the state’s twelve metropolitan counties reported year-over-year declines in the number of foreclosure auction sales from 2012 to 2013. Auction sales dropped the most in Douglas and Denver counties where they fell 50.2 percent and 49.8 percent, respectively.  

Foreclosure filings fell across all regions of the state in 2013, with only some small counties on the eastern plains showing some moderate increases for the year. 

Several mountain counties were found among the state’s counties with the highest foreclosure rates for the fourth quarter, including Archuleta, Park, and Gunnison counties. Boulder, meanwhile, reported only 30 completed foreclosures for the quarter, for a foreclosure rate of only one foreclosure for every 4,109 households. 

“The total number of active mortgage loans in the state has declined in recent years, employment is stable, and home sales activity is up in much of Colorado," McMaken said. "All of those factors helped to push foreclosures down statewide in 2013."


Tuesday, February 11, 2014

Housing News Digest, February 12

Despite vacancy increase, metro Denver apartment rents rise (9news) DENVER BUSINESS JOURNAL - While the vacancy rate for metro Denver apartments rose to its highest level in two years, it's still considered a tight landlord's market and rents across all Denver-area counties continued to rise, according to a vacancy and rent report released Monday. The area's vacancy rate rose to 5.2 percent in the fourth quarter, up from the 4.9 percent rate in Q4 2012 and also from the 4.4 percent vacancy rate in Q3, according to the report published by the Apartment Association of Metro Denver and the Colorado Division of Housing.

  Area's apartment vacancy rate at 3.4% BOULDER - Apartment vacancy for the combined Boulder and Broomfield area declined year over year in the fourth quarter of 2013 even as the Denver metro area's rate as a whole increased to a two-year high. That's according to figures released Monday by the Colorado Division of Housing and the Apartment Association of Metro Denver. Together, Boulder and Broomfield counties had 3.4 percent vacancy, down from 3.7 percent for the same period a year ago. The fourth-quarter rate, however, was a bit of an increase from the third quarter's 2.8 percent vacancy.

  Average monthly rent in the Denver metro area climbed $63 in a year Despite thousands of new apartments coming onto the market in metro Denver, the average rent climbed $63 in 2013 compared to the previous year, from $978 to $1,041. The rent increases came despite an apartment vacancy rate that increased to 5.2 percent during the fourth quarter of 2013, the highest in two years. The average rent rose in all counties measured in the fourth quarter. The largest increases were found in Denver County and the Boulder/Broomfield area, where average rents grew by 8.1 percent and 8.6 percent, respectively.

  NoCo home affordability takes a dive Homes for Northern Colorado’s middle class are becoming less affordable, according to a key index, which means more people are likely to be priced out of the fast-growing residential market. A housing affordability index compiled by the Colorado Association of Realtors has dropped by nearly 13 percent in the past two years in Northeastern Colorado. The index is based on data from Realtor associations in Estes Park, Fort Collins, Boulder, Greeley, Loveland/Berthoud and Longmont as well as Logan and Morgan counties.

  Marijuana refugees face real estate challenges The Barnharts are just one of many so-called "marijuana refugees" who have relocated or are planning to move amid the shifting legal landscape on medical and recreational use. Currently, 20 states and the District of Columbia have given the green light to treat certain medical conditions with marijuana; Colorado and Washington residents voted in 2012 to decriminalize recreational use. Several other states, including New York and Florida, could see medical marijuana laws on the books this year.

Monday, February 10, 2014

Apartment Vacancies Rise With New Apartments in 2013's Fourth Quarter

The apartment vacancy rate in the Denver metro area rose to 5.2 percent during the fourth quarter of 2013, rising to a two-year high. According to a report released Monday by the Apartment Association of Metro Denver and the Colorado Division of Housing, the metro Denver apartment vacancy rate was up from 2012’s fourth-quarter rate of 4.9 percent, and was also up from 2013’s third-quarter rate of 4.4 percent.  

From the fourth quarter of 2012 to the same period of 2013, the vacancy rate increased in all county areas except the Boulder Broomfield area, where the vacancy rate fell further to 3.4 percent, and in Denver County, where it was flat.

“Seasonally, an increase in vacancy is expected for the fourth quarter, but since vacancies are up year over year, that does show that new apartment construction, especially in downtown Denver, is starting to create a few more vacancies.” said Ryan McMaken, an economist with the Colorado Division of Housing. “The rising vacancies have not been enough to immediately push the average rent down, however, and measured year-over-year, we find the average rent actually increased a little more in the fourth quarter than in the third quarter this year.”

During the fourth quarter of 2013, the average rent in metro Denver rose to $1,041, increasing 6.4 percent, or 63 dollars, from 2012’s fourth-quarter average rent of $978.

“New units are arriving,” noted Mark Williams, Executive Vice President of the Apartment Association of Metro Denver. “The industry still sees relevant pent up demand out there, and in addition to new units, owners are also investing in remodels and new amenities for units.”

Remodeling activity has also led to some additional vacancies. “The vacancy rate headed up over seven percent in Glendale,” McMaken said. “But a big factor there is likely the turnover that happens as owners remodel and upgrade units. The new construction we’re seeing will help to moderate rents in 2014. On the other hand, upgrades to existing units will generally lead to average rent growth.”

The average rent rose in all counties measured during the fourth quarter, with the largest increases found in Denver County and the Boulder/Broomfield area where the average rents grew year over year by 8.1 percent and 8.6 percent, respectively. The county areas with the highest average rents were Douglas County and the Boulder/Broomfield area where the average rents were $1,236 and $1,198, respectively. Adams County reported the lowest average rent at $948.

2013’s fourth-quarter vacancy rates by county were Adams, 5.3 percent; Arapahoe, 5.2 percent; Boulder/Broomfield, 3.4 percent; Denver, 6.1 percent; Douglas, 5.0 percent; Jefferson, 4.6 percent.

Average rents for all counties were: Adams, $948; Arapahoe, $995; Boulder/Broomfield, $1,198; Denver, $1,064; Douglas, $1,236; and Jefferson, $994.   

Saturday, February 8, 2014

Colorado unemployment rate remains below national rate

The Colorado unemployment rate remained below the national rate in December. The seasonally-adjusted unemployment rate in Colorado was 6.2 percent in Colorado, and it was 6.7 percent in the US. The first graph shows that Colorado's unemployment rate has generally been below the national rate since 2006:


However, declines in the size of the labor force have helped to push down the unemployment rate both nationally and in Colorado. Employment growth in Colorado, fuelled primarily by job growth in northern Colorado and metro Denver have helped to keep the Colorado rate below the national rate. 


Friday, February 7, 2014

Labor force and employment decline in Colorado Springs from Dec 2012 to Dec 2013

It's difficult to know at this time if it's just a temporary blip, but the labor force in Colorado Springs fell to a two-year low in December 2013, dropping by 5,300 workers from December 2012 to December 2013. The labor force can decline due to more workers retiring or due to discouraged workers leaving the workforce, two-income households electing to become single-income households, and other factors.

In current economic conditions, the overall effect of a declining workforce is probably one of declining overall household earnings.



The Colorado Department of Labor and employment's data has shown a declining unemployment rate in Colorado Springs over the past year, but recent declines in the labor force have helped to push down the unemployment rate. (It was down to 7.2 percent in December.) Overall employment has been generally stable of the past year, as we can see above. Certainly, total employment was higher in 2013 than 2012.

The next graph shows the labor force for each month of each year. This helps  us see past any seasonal issues. In this case, we see that the labor force was at a three-year low when compared to other Decembers. The labor force in December 2013 was smaller than both December 2012 and December 2011, but remains well up from December 2010.


Meanwhile, the final graph shows that total employment, according to the Household Survey, was down from December 2012 to December 2013, but that it remained above total employment levels for the Decembers of 2009, 2010, and 2011.

Overall December's Household Survey suggests some ongoing weakness in the Colorado Springs job market. 

Corelogic: Home price index in Colorado up 8.3 percent in December

CoreLogic released its December home price index (HPI) numbers this week. The year-over-year change in December was 8.3 percent in Colorado.  December marks the twenty-fourth 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 percent from December 2012 to December 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.)



17 states had larger growth rates in the HPI than Colorado, with the highest growth rates being in Nevada, and California. Nevada's HPI grew 23.9 percent year over year, and California's HPI grew 19.7 percent. Only Mississippi, with a year over year drop of 0.2 percent, showed a decline in the HPI.

Philly Fed: Colorado Coincident Index Inches Below National Index

According to the Philadelphia Fed, the 3-month change in the Colorado Coincident Index, 0.78 percent, fell slightly for slightly below the national 3-month change of 0.79 percent. Practically speaking, the two indices increased at the same rate over the 3-month period ending in December. This continues a trend, mentioned last month, in which we concluded that the Colorado coincident index was showing a trend of moderating in its growth rate and converging toward the national growth rate in the index. The first graph shows the 3-month change in the index for Colorado and the nation:

The second graph shows the year-over-year change in the coincident index for Colorado and the nation. Here we see a similar trend with Colorado's growth moving toward more closely mirroring that of the nation. In December, the YOY growth rate was 3.5 percent and the national growth rate was 3.0 percent. 


Compared to all other states, Colorado fell in about the middle of the pack, with only Montana and South Dakota showing declines in the index over the 3-month period. According to the Philly Fed's press release:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for December 2013. In the  past month, the indexes increased in 41 states, decreased in four states, and remained stable in five, for a one-month  diffusion index of 74. Over the past three months, the indexes increased in 46 states, decreased in three, and remained stable  in one, for a three-month diffusion index of 86. For comparison purposes, the Philadelphia Fed has also developed a similar  coincident index for the entire United States. The Philadelphia Fed’s U.S. index rose 0.3 percent in December and 0.8  percent over the past three months.