Thursday, April 15, 2010

Grand Junction and Colorado Springs home prices fall most in 4th quarter

Metropolitan home prices in Colorado, based on home sales and on mortgage refinances, showed declines in all metro areas of Colorado. According to the Federal Housing and Finance Agency's fourth quarter 2009 home price report, Grand Junction and Colorado Springs showed the largest declines in home prices with drops of 5.63 percent and 3.21 percent, respectively.

The Denver-Aurora area showed the smallest decrease with a fall of 1.37 percent, with Fort Collins-Loveland showing a virtually identical drop of 1.38 percent.

The overall Colorado index, based only on home sales and excluding refinances, showed continued declines in the Colorado home price index. Since the Colorado index peaked during the second quarter of 2007, the index has fallen 4 percent, but it has risen 2.3 percent since the fourth quarter of last year.

Although home values across the state are down year-over-year, Colorado metro areas have performed much better compared to five years ago. Comparing to the fourth quarter of 2004, Grand Junction showed the largest gains with home prices rising 32.4 percent, while Colorado Springs showed gains of 5.8 percent. Only the Greeley area showed home price losses over five years with a 5-year drop of 10.7 percent.

It is likely that Grand Junction's substantial home price increase over the past five years reflects a delayed downturn in the real estate markets given the prevalence of oil and gas activity that continued into 2008 while much of the state was experiencing significant declines in home sales activity and high numbers of foreclosures.

Greeley's value losses over five years reiterate the fact that Greeley was one of the earliest communities to feel the impact of foreclosures and declining demand for for-sale housing.

For all metro areas, the one year percent changes were Colorado Springs, -3.21 percent; Denver-Aurora, -1.37 percent; Fort Collins-Loveland, -1.37 percent; Grand Junction, -5.63 percent; Greeley, -2.25 percent; Pueblo, -3.13 percent.

For all metro areas, the five year percent changes were Colorado Springs, 5.82 percent; Denver-Aurora, 1.73 percent; Fort Collins-Loveland, 1.96 percent; Grand Junction, 32.38 percent; Greeley, -10.72 percent; Pueblo, 2.35 percent.

Nationwide, U.S. house prices fell slightly in the fourth quarter of 2009 according to the index. The index, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.1 percent lower on a seasonally adjusted basis in the fourth quarter than in the third quarter of 2009. Over the year ending with the fourth quarter of 2009, seasonally adjusted prices fell 1.2 percent.

FHFA’s seasonally adjusted monthly index for December was down 1.6 percent from its November value, reversing price increases over the prior months. The monthly change from October to November was revised downward to +0.4 percent, from an initial estimate of +0.7 percent.

While the national, purchase-only house price index fell 1.2 percent from the fourth quarter of 2008 to the fourth quarter of 2009, prices of other goods and services rose 1.9 percent. Accordingly, the inflation-adjusted price of homes fell approximately 3.1 percent over the latest year.