Friday, September 30, 2011

Multifamily permits at ten-year high during August

During the first eight months of 2011 in Colorado, building permits issued for multifamily construction are up 169 percent, year over year, while permits issued for single-family construction are down 0.04 percent for the same period.

This year, through August, there have been 2,384 multifamily permits issued in Colorado, and 6,447 single-family permits issued. For the same period during 2010, there were 883 multi-family permits issued, and 6,450 single-family permits.

For the month of August alone, single-family permits are up, year-over-year, by 21.5 percent, but multi-family permits are up 2,520 percent, reflecting a tiny permit total of 25 during August 2010. There were 1017 single-family permits and 655 multi-family permits issued during August 2011. There were 820 single-family permits issued during August 2010.

The second graph shows that overall, both multi-family and single-family permits in August are at levels below what was typical over the past decade, but that both are increasing. In the case of single-family permits, seasonal factors are contributing to the uptick in permits issued.

During August, the number of new multi-family permits issued was at the highest total reported since October 2008. In other words, multi-family permit activity is at the highest level seen since the financial crisis of 2008.

Regionally, new construction of single-family homes showed year-over-year increases during June and July, but was unchanged during August. See here for more.

Multifamily activity has shown indications of renewed growth in the year-to-date totals in recent months. There has been much optimism within the multifamily industry about rent growth which in turn will lead to new construction.

Multifamily permit activity during August was at a ten-year high. The third graph shows that August's permit total was up from 2010 and is now at the highest August total since 2002.

Growth in single-family permit activity suggests there is some hope among single-family homebuilders, but that demand is restrained. August's permit total for single-family units was at a 3-year high, although it remains well below typical August totals reported over the past decade.

Conclusions: This data further reinforces the notion that interest in new multifamily construction continues to increase at a much faster rate than single-family construction.

Housing News Digest, September 30

For Rent: Rentals on the move.
“The vacancy rate is better than it was in 2009,” Hoppe said. “At the end of 2009, the vacancy rate in Grand Junction was around 13.2 percent. We’ve worked our way back to a better rate.”

According to a recent statewide rental survey by the Colorado Division of Housing, the local vacancy rate was running around 6 percent in the second quarter of 2011. Hoppe said that the vacancy rate for rental properties managed by Bray has fallen to about 5 percent.

Forecast says double-dip recession is imminent
NEW YORK (CNNMoney) -- The U.S. economy is staring down another recession, according to a forecast from the Economic Cycle Research Institute.

"It's either just begun, or it's right in front of us," said Lakshman Achuthan, the managing director of ECRI. "But at this point that's a detail. The critical news is there's no turning back. We are going to have a new recession."

Personal income falls as spending rises in August
NEW YORK (CNNMoney) -- Americans earned less money last month than they did the month before, according to government data released Friday, but spending still rose.

The report showed personal income fell 0.1% in August, after increasing 0.1% the month before. It's the first time income has dropped in two years and a move that could mean less spending power at a time when the economy is in desperate need of a boost.

The Group CEO leaves job on Friday
Chuck McNeal, chairman and CEO of The Group Inc. Real Estate, Northern Colorado’s largest real estate company, is leaving the company to join CitiBank.

McNeal will become senior vice president and brand relations executive for the Global Partnership Channel at CitiBank but will continue to live in Fort Collins. He begins his new job as of Oct. 1.

Housing Prices Unlikely to Recover Before 2020, FICO Survey Finds
MINNEAPOLIS, Sep 30, 2011 (BUSINESS WIRE) -- FICO's latest quarterly survey of bank risk professionals offered a decidedly pessimistic outlook, reversing the growing optimism seen in late 2010 and early 2011. The survey, conducted for FICO by the Professional Risk Managers' International Association (PRMIA), shows that bankers expect delinquencies on consumer loans to rise, underwriting standards to become stricter, and the housing sector to continue struggling far into the future.

Thursday, September 29, 2011

Quarterly Profile of Housing Economy in Grand Junction

Beginning this quarter, we'll be releasing quarterly profiles of various regions of Colorado. Here is the new quarterly profile of the housing economy in the Grand Junction area.

Grand Junction, Third Quarter, 2011

Denver County and Weld County rank high for growth in county employment report

The Bureau of Labor Statistics released today its County Employment and Wages Summary. According to the release:

From March 2010 to March 2011, employment increased in 256 of the 322
largest U.S. counties, the U.S. Bureau of Labor Statistics reported
today. Elkhart, Ind., posted the largest percentage increase, with a
gain of 6.2 percent over the year, compared with national job growth
of 1.3 percent. Within Elkhart, the largest employment increase
occurred in manufacturing, which gained 5,125 jobs over the year
(12.4 percent). Sacramento, Calif., experienced the largest over-the-
year percentage decrease in employment among the largest counties in
the U.S. with a loss of 1.6 percent.

The U.S. average weekly wage increased over the year by 5.2 percent
to $935 in the first quarter of 2011.

In March 2011, national employment, as measured by the QCEW program,
was 127.9 million, up by 1.3 percent

The average weekly wage exceeded the national change of 5.2 percent in Denver, Douglas, Larimer and Weld Counties. weld County showed the largest year over year growth with average wages increasing 7.6 percent. Growth in Douglas county was slightly less at 7.1 percent. El Paso County, on the other hand, was well below the national growth rate at 2.9 percent.

Weld County's increase placed it at 22nd in the nation for wage growth. Douglas County placed 34th in the nation.

Compared to the nation's employment growth rate of 1.3 percent, Denver, El Paso and Weld Counties placed higher with year over year employment growth rates of 2.0 percent, 1.4 percent and 3.6 percent, respectively.

Weld County's growth placed it 12th in the nation for employment growth. Denver placed 65th. On the other hand, total employment in Douglas County and Jefferson County grew by 06 percent and 0.5 percent, respectively. All counties surveyed showed growth in total employment.

Year-over-year change in average weekly wage, by county:
Denver 5.0
Douglas 7.1
El Paso 2.9
Jefferson 3.7
Larimer 5.3
Weld 7.6

Year-over-year change in total employment, by county:
Denver 2.0
Douglas 0.6
El Paso 1.4
Jefferson 0.5
Larimer 1.2
Weld 3.6

See here for the latest employment data from August.

Data discussed here is for the first quarter of 2011.

Factory activity in Fed Region 10, including Colorado, grows "modestly"

KANSAS CITY, Mo. - The Federal Reserve Bank of Kansas City released the September Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity edged higher in September, and although expectations moderated slightly, producers on net still anticipated increased activity over the next six months.

“Factory activity in our region continues to grow modestly, and firms generally expect this trend to continue,” said Wilkerson. “Price indexes also
edged higher this month after generally decelerating earlier in the summer.”

The Federal Reserve Bank of Kansas City serves the Tenth Federal Reserve District, encompassing the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. As part of the nation’s central bank, the Bank participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies, and providing financial services to depository institutions. More information is available online at

GDP up 1.3 percent in the second quarter of 2011

The U.S. Bureau of Economic Analysis (BEA) has issued the following news release today:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.3 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the "third" estimate released by the Bureau of Economic Analysis.

The full text of the release on BEA's Web site can be found at

Housing News Digest, September 29

Short Sale Delays Drive First-Time Buyers From Market: Survey
Processing delays have taken their toll on first-time homebuyer interest in short sales, according to the latest HousingPulse Tracking Survey released by Campbell Surveys and Inside Mortgage Finance Monday.

No double-dip recession for Colorado Springs, economist says
Colorado Springs likely won’t fall back into a recession and job growth should resume next year as major construction projects take hold, including Fort Carson expansion, the Southern Delivery System water pipeline and several apartment complexes, a local economist said Wednesday.

“I expect the local economy to expand next year with continued population growth, a resurgence of entrepreneurship and capital access, private-sector company growth to replace expected government job losses and a modest resurgence of home building,” said Tom Binnings, a senior partner in Summit Economics LLC, a Springs economic research and consulting firm.

Shale Oil Boom Takes Hold on the Plains
The rolling high plains east of Colorado Springs (map) saw plenty of change before the "landmen" came. Ranchland that once stretched three or four miles between homes filled in with residential developments on multi-acre lots, bringing more people and paved roads.

Then, about two years ago, came a rush of real estate negotiators, snapping up leases for potential shale oil drilling. "I've never seen anything like it," says Rick Davis, 54, whose grandfather started buying ranchland in the early 1900s in Colorado's eastern El Paso County. "Turns out that land was right in the center of all the activity."

New Town using beetle-kill in homes
Denver-based New Town Builders is the first of what politicians and environmentalists hope will be many to use large quantities of lumber that has been infested by pine beetles when constructing homes.

Much of Colorado’s lodgepole pine, stained blue with a fungus created by the beetles, in the past primarily has been used by artisans in decorative applications. But the lumber can also carry a structural-grade stamp of approval for use as a vertical stud in building frames. New Town Builders is the first production home builder in Colorado to order delivery of blue-stained pine ine in mass quantities for use in framing homes, thanks largely to the counsel and recommendation of Choose Outdoors In.

Google invests $28 million in affordable housing
The Boston Globe reported today that Google has invested $28 million to build 240 housing units at the Charlesview Residences in Allston, a section of Boston. According to the Globe, the Charlesview is one of the country's largest low-income housing developments. Charlesview currently has 213 "one to four bedroom homes," the property's owner, Peabody Properties, says on the complex's Web site.

OCC: Servicers to Spend One Year or More Reviewing Foreclosures

It will be a long road ahead for the 14 servicers who received consent orders from federal regulators earlier this year. Acting Comptroller of the Currency John Walsh says the servicers will spend the next year or more recompensing for past documentation errors related to foreclosure processing.

Wednesday, September 28, 2011

95 pct of new multifamily permits in only four counties in 2011

During the first eight months of 2011, 95 percent of new multifamily permits issued have been issued in Larimer, Jefferson, Denver and El Paso counties. Prior to June 2011, virtually all new permits had been issued in only Larimer, Denver and El Paso counties, but Jefferson county has recently issued permits for more than 400 new multifamily units.

According to new multifamily permit data for Colorado counties, released Monday by the Census Bureau, 2,318 multifamily permits have been issued from January through August of this year. 2,203 of them were issued in Larimer, Denver, Jefferson and El Paso counties.

The remaining 115 permits were issued in Mesa, Boulder and Douglas counties. No other county in the state reported any new multifamily permits issued so far this year.

For more historical info on multifamily permits, see here.

In the map below, we see that the geographic distribution of new multifamily permits.

Brown: More than 400 permmits issued in 2011
Yellow: fewer than 100 permits issued in 2011
White: no permits issued, or no data

Total multifamily permits issued, Jan-Aug 2011
Boulder 34
Denver 916
Douglas 17
El Paso 417
Jefferson 416
Larimer 454
Mesa 64

With so little demand for new condominiums right now, it is safe to assume that the majority of new multifamily permits being issued are for rental housing. We see most of this activity in areas where vacancy rates have been tight or look to be tight for the near term.

With apartment vacancy rates headed below five percent in the Denver, Larimer and El Paso counties, the markets appear to be responding to tight vacancies with plans for future construction.

August unemployment: Grand Junction, Pueblo, Colo Springs and Greeley remain above national rate

The BLS released its report today on unemployment in 372 metro areas in the US. The data for Colorado is not different from the statewide report already released by the Colorado Department of Labor and Employment. The chart with local unemployment rates is here.

Nevertheless, the report does provide some comparisons with other metro areas in the nation. The map on the last page shows that the Colorado Springs, Grand Junction, Pueblo and Greeley metro areas all have unemployment rates (not seasonally adjusted) above the national rate of 9.1 percent (not seasonally adjusted). The Fort Collins-Loveland area, the Denver area and the Boulder area all have unemployment rates below the national rate.

The map:

Statewide, Colorado's unemployment rate (seasonally adjusted) remains below the national rate for the second month in a row following a three month period(January-March 2011) during which Colorado's unemployment rate was higher than the nation's. Prior to January 2011, the unemployment rate in Colorado had been below the national rate for several years.

The Boulder and Fort Collins areas have posted better unemployment rates than the nation for quite some time. Denver has in the past several months dropped below the national rate. The unemployment rates in the other metro areas (Greeley, C. Springs, Pueblo, Grand Junct.) have generally been above the national rate since the recession began in Colorado in 2008.

National comparisons remain important insofar as perceptions of the local job market drive household creation in Colorado. As long as Colorado is perceived as being a better job market than many metro areas in the nation, such a perceptions will foster household creation and population growth in the state.

Housing News Digest, September 28

Experts: Northern Colorado commercial real estate market stagnates
The commercial real estate market likely won't improve significantly for another decade, but there are opportunities for the right projects, including multifamily housing, according to industry experts.

Optimism was in relatively short supply Tuesday at the Northern Colorado Real Estate Conference Rendezvous sponsored by the Everitt Real Estate Center at CSU as architects, builders and Realtors talked of increased competition for work, more government regulations, a national economy that faces a 50/50 chance of double-dip recession and difficulty financing projects.

Mortgage Survivors Get Bargains as Price-Drop Danger Eases
The Conference Board’s Consumer Confidence Index during the last two months has been the lowest since early 2009. The share of people in September who said jobs are hard to find rose to the highest level since 1983, and the gauge of current business conditions fell for the fifth straight month, according to the New York-based research firm’s report yesterday.

Little to Gain

“Even if there is another recession, people who can qualify for a mortgage won’t gain anything by playing the waiting game,” said Nariman Behravesh, chief economist at Englewood, Colorado-based IHS Inc., who predicts another 5 percent national decline before prices hit bottom next year. “They may get lucky with the price, but they probably won’t be getting these low mortgage rates.”

Denver No. 4 on Case-Shiller
“On a year-over-year basis, this is telling me Denver is very stable,” said Peter Niederman, CEO of the Kentwood Co. “We are hanging in the top 5. It is a nice place to be. We did not see the high-highs and we are not seeing the low-lows. We are maintaining a nice, stable environment.”

That is preferable than being like the stock market, with its huge, recent swings, he said.

“I’m glad that we are not all over the map,” Niederman said. “I would be concerned if one month we were 13th, and the next month we were 8th, and the following month we were No 3.”

Not much optimism found in survey of Colorado commercial real estate market

Commercial real estate brokers are not optimistic about the economic future, according to results of a first-ever statewide survey released today by the Everitt Real Estate Center at CSU.

The findings highlight pessimism among commercial real estate professionals, but “wishful optimism” among architects and construction sectors.

Existing Home Inventory continues to decline year-over-year in September

In June, Tom Lawler posted on how the NAR estimates existing home inventory. The NAR does NOT aggregate data from the local boards (see Tom's post for how the NAR estimates inventory).

In a few months the NAR will revise down their estimates fpr inventory and sales of existing homes for the last few years. Also the NAR methodology for estimating sales and inventory will be changed.

Tuesday, September 27, 2011

Case-Shiller: Denver home price index falls 2.1 percent, year over year

Case-Shiller’s home price index for the Denver area was unchanged from June to July, and fell 2.1 percent,year over year, from July 2010 to July 2011.

According to the July report from the S&P;/Case-Shiller Home Price Index, including data up through July, many cities measured by the index showed improvement from June to July. The increase largely reflects seasonal factors.

The month-to-month change was primarily due to seasonal factors, and the year-over-year change showed a continued slow decline in home prices.

According to the press release issued by S&P;:

“While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery. Eighteen of the 20 cities and both Composites are showing that home prices are still below where they were a year ago. The 10-City Composite is down 3.7% and the 20-City is down 4.1% compared to July 2010. Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery.

In the Denver area, the home price index is now at a level comparable to that seen in mid-to-late 2003. The index value for July 2011 was 125.9, and during December 2003, the index value was 126.9.

The first chart shows the the home price index for the Denver area back to 2001.

The index dropped, year-over-year, in all cities measured. Denver's market showed a less-small decrease than all but three of the 20 cities measured in the index. Detroit and Washington, DC increased, year over year, by 1.2 percent and 0.3 percent, respectively. Boston's index declined by 1.9 percent during the same period.

Minneapolis and Phoenix reported the largest declines with the home prices dropping year over year by 9.1 percent and 8.8 percent, respectively.

The second 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. Prices have been largely flat since mid-2009.

The 20-city composite is down 30.9 percent since it peaked in July 2006, but the Denver index is down only 10.2 percent from its August 2006 peak.

Nevertheless, the Denver index has returned to 2003 levels. In addition, the Denver Index remains near the lowest level experienced since July 2009, and is now 4.8 percent above where it was when it hit its initial recessionary trough in March 2009. The Denver Index was 125.9 during July 2011, and it was 128.7 during July 2010.

The third chart compares year-over-year changes in the Denver area index and in the 20-city composite. The Denver index did not achieve the rates of growth experienced by the national index, but the Denver index did not experience comparable rates of decline following the onset of the national recession either. Overall, the index has been less volatile in Denver than has been the case for the 20-city composite. However, year-over-year change in the 20-city composite during July was negative with a decrease of 4.1 percent, and the Denver area index’s fall of 2.1 percent is the thirteenth month in a row in which the growth rate has been negative. In the 20-city index, the year-over-year change has only been negative for the most recent ten months. July 2011 was the third month in a row in which the index's decline in Denver was smaller than the 20-city composite decline.

The last chart provides a closer look at year-over-year changes in the Denver index. Note that for July 2010 through July 2010, the change has fallen below zero, and reflects the end of the homebuyer tax credit’s end which has led to a fall in demand and a decline in the home price index. The upward trend in the index in response to the tax credit is clear during late 2009 and early 2010.

In recent months, the Denver index has been slightly above the indices for the same months of 2009. Comparisons with the same period of 2010 is problematic given the large effects of the end of the tax credit. Comparing to 2009, we see that prices have still moved little since the first half of 2009 when the index was in the 120-123 range. During the first half of 2011, the Denver index has been in the 122-124 range, signalling very limited growth over the past two years.

Housing News Digest, September 27

Poverty pervades the suburbs
Since 2000, the number of suburban poor has skyrocketed by 53%, battered by the two recessions that wiped out many manufacturing jobs early on, and low-wage construction and retail positions more recently.

America's cities, meanwhile, had 12.7 million people in poverty last year, up about 5% from the year before and 23% since 2000. The remaining 18 million poor folks in the U.S. are roughly split between smaller metro areas and rural communities.

"We think of poverty as a really urban or ultra-rural phenomenon, but it's not," said Elizabeth Kneebone, senior research associate at Brookings. "It's increasingly a suburban issue."

Colorado rental company building back after crash

Tommy Hoffman thought he had a great idea in 2008. Three years later, that idea looks like it's going to flower.

Hoffman, who's been in the vacation rental business for more than 15 years, starting by renting his own unit in the old Vail Crossroads building to friends and associates, then moving up to an office with a fax machine. Over the years, Hoffman built his company into one that specializes in renting condos, townhomes and private homes, working primarily with property management companies and lodges.

Colorado probate courts fail to protect those at risk, audit finds
Colorado's probate courts have not followed laws enacted to protect vulnerable adults and children from abuse by guardians and conservators, state auditors reported Monday.

They reported that in one case, a probate court failed to contact a guardian for 10 years about the ward he was appointed to protect. In another, the court learned that a protected person had died in 2003 only when auditors called to ask about the absence of financial reports.

In a random sample of 55 cases, state auditors also found a conservator who spent 423 percent of the amount estimated in the financial plan for the protected person and another who spent nearly $1,000 at retail stores, documenting the purchases only in a line on a bank statement.

Nantucket County ranks No. 1 in U.S. home prices
Eight countifes are above the $1 million mark in upper quartile value. Three are in California, two are in Colorado, and the others are in Massachusetts, New York and Wyoming.

Highlands Ranch transitions into future
At the height of the population boom, a park was being developed every year and a half, while neighboring cities built one every five years, said Jeff Case, public works director for the Highlands Ranch Metro District and longtime resident.

With the metro district building parks, the Highlands Ranch Community Association providing recreation services and Douglas County supplying all other necessary functions, including law enforcement, there was barely any talk among decision-makers about incorporating Highlands Ranch into a municipality. Incorporation can be a hot-button issue for some people; they argue that becoming a city would only result in a larger tax burden. Highlands Ranch has just about everything residents could need, they say.

Colorado State University Statewide Survey Suggests Wishful Optimism among Built Environment Leaders

FORT COLLINS - Wishful optimism persists among leaders of Colorado’s built environment according to results of a first-ever statewide survey released today by the Everitt Real Estate Center at Colorado State University.

The survey provides a first-of-its kind view from the three major sectors involved in the built environment in Colorado, including architectural, construction and commercial real estate professionals. The findings highlight the greatest pessimism among the commercial real estate sector related to challenging national issues, such as the impact of national debt ratings on financing, regulatory guidelines and employment growth. Leaders among architectural and construction sectors expressed more optimism, but retained serious concerns about the future as well.

Monday, September 26, 2011

August: Single-family building permits popular in Larimer, Weld, Douglas and El Paso counties

Of the 4,871 new single-family permits issued during the first eight months of 2011, 1,040 of them, or 21 percent, were issued in El Paso County alone. According to new single-family August permit data by county, released yesterday by the Census Bureau, the counties with the largest numbers of single-family permits issued during the first half of 2011 were El Paso, Douglas, Denver, Larimer and Arapahoe.

New single-family permits from Jan-Aug
El Paso 1040
Douglas 619
Larimer 508
Denver 459
Arapahoe 434

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

However, when permit totals are adjusted to the number of existing housing units in each county, the counties with the larges amounts of permit activity were Chaffee, Park, Douglas, El Paso and Weld.

The first map shows the relative amount of single-family permit activity adjusted for the existing size of the housing stock in each county, thus creating an index value. The counties are then broken out in quartiles reflecting the amount of single-family activity compared to other counties. The top quartile has the largest amount of new permitting compared to the number of existing units. The bottom quartile has the smallest amount.

Top Q: Brown
2nd Q: Green
3rd Q: Orange
Bottom Q: Yellow
No data: White

In absolute terms, and as expected, the counties with the largest populations have the most permit activity. But when adjusted to the number of existing housing units (as shown in the map), the hot spots for single-family permits right now are Douglas, Park and Chaffee and El Paso counties. Weld, Teller and Adams and Broomfield counties land in the second quartile.

During the first eight months of 2011, the areas with relatively few new single-family permits relative to the size of the existing stock are Pueblo, Jefferson, Denver, Arapahoe and Boulder counties.

In the larger context, single-family permits remain well below totals experienced prior to 2007. From 2006 to 2008, single-family permits in the state decreased 60 percent from 31,000 to 12,000. Permit activity appears to have bottomed out in 2009. When disussing permit activity from 2008 to the present time, we're looking at permit totals that are near 20-year lows. (See here for more.)

See here for a discussion on historical permit data by county.

It is also helpful to see which counties have shown the largest increases and decreases in permit activity. In the map below, we see that comparing the first eight months of this year to the same period last year, Larimer and Teller counties were among the counties with the largest increases in single-family permit activity. Boulder, Jefferson, Denver and Douglas counties also showed increases. On the other hand, permits decreased in Mesa, Weld, Adams, Arapahoe, El Paso and Pueblo counties.

Brown: Increase of 25 percent or more
Green: Increase of 1 to 24.9 percent
Orange: Decrease of 1 to 24.9 percent
Yellow: Decrease of 25 percent or more
White: No data or no change

Largest increases among metro counties:
Larimer 53 percent
Teller 43 percent
Boulder 6 percent
Jefferson 4 percent
Denver 2 percent

With relatively large numbers of new permit activity in 2011, and with a year-over-year increase in each county, both Larmier County and Douglas County show solid demand for new permitting at this time. In spite of year-over-year declines in totals, El Paso County continues to report a significant share of the state's overall permitting activity while Weld county reports a surprisingly large number of new single-family permits in the wake of very high foreclosure totals. Much of the new permit activity in Weld county is likely coming from expanding communities in southern Weld County.

Housing News Digest, September 26

Big housing blow: New home sales fall, again
WASHINGTON - Sales of new U.S. homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.

The Commerce Department said Monday that new-home sales fell 2.3% to a seasonally adjusted annual rate of 295,000. That's less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market.

Survey shows first-time homebuyers growing weary of short sales

First-time homebuyers are growing tired of short sales, which take nearly 17 weeks to complete, according to the latest Campbell/Inside Mortgage Finance housing survey.

While first-time homebuyers acquired 54.1% of all short-sales in November 2009, the segment's share of acquisition activity fell to 39.7% in August with many buyers losing interest due to several factors slowing down the process, the Campbell/Inside Mortgage Finance survey showed. The August figure represented a "three-month slide and was the lowest level for first-time homebuyers ever recorded in the survey" of 2,500real estate agents.

Middle class income falls ... but not everywhere
NEW YORK (CNNMoney) -- For the typical American household, income fell during the recession. But middle class residents in some states were more fortunate than others.

Nationwide, median household income fell to $50,046 in 2010, down 1.4% from 2007, according to Census statistics released last week.

But while the Great Recession wreaked havoc across the nation, wide disparity among the states shows that not all the pain was shared equally. Some Americans were still able to get ahead despite soaring unemployment and the housing collapse.

Amber Homes, co-owner file Chapter 7

Amber Homes Inc. of Aurora and its co-owner both filed Chapter 7 petitions Monday with the U.S. Bankruptcy Court in Denver.

The company listed assets of $568,100 and liabilities of $45.28 million. James William Harmon, who owns 50 percent of Amber Homes, listed assets of $310,976 and liabilities of $46.27 million. Harmon lists among his assets 15 firearms, including rifles, shotguns, pistols and revolvers worth a combined $3,450.

Colorado Springs unveils airport business park
Colorado Springs wants to get the word out about the new city-owned Cresterra business park just south of the Colorado Springs Airport, The Gazette reports.

With just a handful of companies the business park has attracted so far, the city threw a "takeoff event" to attract potential users who could fill the available 1,300 acres.

New home sales fall 16 percent in August

In August of this year, new single-family home sales rose slightly in the US, but fell in the West region, which includes Colorado. However, according to new data released by the Census Bureau today, new home sales in the West are now at the lowest August total recorded in at least ten years.

The report, which monitors sales activity for newly constructed houses, reported that in the West, new home sales were down year over year, decreasing 18 percent to 5,000 in August 2011 from 6,000 new homes sold in August 2010. Nationwide, sales rose 13 percent, increasing from 23,000 to 26,000 during the same period.

In August, new home sales were at the lowest August total in more than a decade, and were near the all-time low for any month over the past 10 years. No month has reported fewer than 4,000 new home sales for the region during that time.

For the West region:

The second graph shows that new home sales continue to fall and have generally followed a downward trend since the middle of the decade.

New home sales peaked during the spring and summer of 2005 and have trended downward since. The number of new houses sold in the United States is down 79 percent since the peak of March 2005, and new home sales in the West have fallen 86 percent since sales peaked in the region during March 2004.

The third graph shows the declines in both US and regional totals in new homes for sale.

The number of new homes for sale has also fallen off considerably. The number of new houses for sale in the West has fallen 74 percent since the total peaked during June 2007, and the same total has fallen 71 percent in the US since the number of new homes for sale peaked in the US during August 2006.

The number of new single-family homes for sale in the West is near the lowest level it's been in more than ten years. This reflects very low demand in the face of an ongoing and large number of new foreclosures and low-priced properties in many areas of the West, including Colorado. Although foreclosures have fallen in Colorado in recent years, foreclosure rates remain at historic highs.

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. In the final graph, we see that the inventory is now at a ten-year low of 29,000 homes. This is good news for owners of existing homes seeking to sell homes since it suggests that fewer new homes are sitting and waiting to be sold, thus diminishing some of the inventory-driven downward pressure on prices.

Thursday, September 22, 2011

Overview of July 2011 home sales closings and home prices (Realtor data)

The Colorado Association of Realtors has posted home sales closings and median home price data through July. The data reflects the Metrolist numbers from various markets across the state.

Home Sales Closings

Below, I've pulled out the two largest markets - metro Denver and the Pikes Peak region - and the statewide totals. The data is from 2003 through July of this year. As you can see, home sales activity has a regular cycle for each year, with sales peaking midyear, and bottoming out in January and February.

We can note that there is a general downward drift in total closings since 2006 as the demand for homes began to soften. We can also see that closings collapsed during the second half of the year in 2010 following the expiration of the homebuyer tax credit.

For 2011, we can see that closings probably peaked for the year during July, and that closings will probably continue to move downward for the rest of the calendar year. It is rare for closings to decline in July and then move back up again in August, although it does happen, as was the case in 2006 and 2007.

The second half of the year is almost certain to show more closings activity than the second half of last year. The second half of last year was artificially pushed down by the end of the tax credit in April. This shifted much of 2010's activity to the first half of the year. At year's end, 2011's totals are likely to look similar to 2010's totals, although the closings activity will be spread throughout the year in quite a different fashion. It is likely that the total number of closings that occurred during 2011 will be similar to the total number reported during 2010.

As expected, the year-over-year comparison from July 2010 to July 2011 shows an increase in closings in Denver metro, Pikes Peak and statewide, with increases of 17.6 percent, 11.9 percent and 18.3 percent, respectively.

Median Home Prices

According to the CAR data, from July 2010 to July 2011, the median home prices in metro Denver and Pikes Peak decreased by 1.6 percent and 3.8 percent, respectively. There's no surprise there given the sorts of home price data we're seeing out of Case-Shiller, FHFA, CoreLogic and others. Statewide, on the other hand, home prices declined during the same period by 13.8 percent. It looks like this larger drop is a result of sizable drops in the median home price in places like Glenwood Springs, Grand County and Pagosa Springs.

For the graph below, I've pulled out the two largest markets's median prices and the statewide median price.

The Denver metro price (which doesn't include Boulder) is back up near $240,000 while the statewide price and the Pikes Peak priceare both down below $200,000. Overall, it appears that Denver metro continues to be one of the more resilient markets. The Pikes Peak area has been largely flat since late 2009, and the statewide numbers have been heading downward compare to the large markets. This is likely due to continued foreclosure and home demand issues on the Western Slope and in some mountain communities. Grand Junction.

*This data is for single-family homes and does not include attached housing.

FHFA: House prices fall 6.7 percent in mountain region in July

House prices in July in the Mountain region, which includes Colorado, fell 6.7 percent, year-over-year. Nationally, the house price index fell 3.2 percent. The new house price index numbers, released today by the Federal Housing and Finance Agency, also showed that the national index is down 17.3 percent from the peak level reached in June 2007, while the Mountain region's index is down 30.5 percent over the same period.

The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.

The decline in house prices, both regionally and nationally, continues the trend that began in mid-2007 as prices have fallen almost constantly since the peak.

Notably, the FHFA index does not show a "double dip" as can be seen in the Case-Shiller data (shown here), in which prices begin to recover in 2009, but then fall again after mid-2010. The FHFA monthly data shows almost nothing but losses following mid-2007.

The second chart shows each month's house price index compared to the same month a year earlier:

We can note that the Mountain region has performed more poorly (from a seller's perspective) than the national index. This runs contrary to some local experience and some statistics. The Case-Shiller data for the Denver metro area, for example shows that local prices did not decline as much as the national composite index following the financial panic in 2008. Also, the FHFA "expanded-date" index shows Colorado performing better than the national index.

Since we're looking at regional, data, however, we have to keep in mind that this data reflects house prices in Arizona and Nevada, and this no doubt will continue to put downward pressure on regional prices for now.

Nevertheless, the overall trend among most home price indices is one of slow downward movement in home prices. This trend includes Colorado statewide as well as the metro Denver area.

Mass layoffs down 28 percent in 2011

Mass layoff events fell 28 percent to 68 events during the first eight months of 2011 in Colorado. There were 95 mass layoff events during the same period last year. According to a new report released today by the U.S. Bureau of Labor Statistics, there were 6 mass layoff events during August 2011, which is up 20 percent from the 5 events reported during August of last year.

Monthly mass layoff events grew rapidly after October 2008 in Colorado, and have gradually lessened since early 2010.

Nationally, mass layoff events decreased 1.5 percent from 976 during August 2010 to 961 during August of this year.

In the year-to-date total for August, mass layoffs have now fallen two years in a row after peaking at 117 mass layoffs during the eight months of 2009. The second graph shows year-to-date totals for August since 2001:

Mass layoffs were rare from 2004 through most of 2008.

Overall, the most recent mass layoffs data suggests that the employment situation continues to stabilize. New layoffs continue to lessen, and as we've seen in the most recent employment data, July and August 2011 showed the first year-over-year growth in employment in 34 months.

New jobless claims

New claims for unemployment insurance rose year over year in by 54 percent to 547 in August 2011. There were 355 new claims during August of last year. New claims for unemployment insurance have also gradually fallen since early 2010. Nationally, new claimants rose 7.3 percent during the same period.

As can be seen in the third graph, year-over-year changes in new unemployment claims points toward more and more stability in the labor markets as most year-over-year changes has been below zero since late 2009. Nevertheless, new claimants totals increased both nationally and in Colorado during August. August is typically a light month for initial claims, but Colorado's total was up considerably.

In year-to-date totals for new unemployment claims through August, totals are down 23 percent year over year. There were 6,946 new claims during the first eight months of 2011, compared to 9,070 new claims during the same period last year. In the year-to-date total for August, new claims for unemployment insurance have now fallen two years in a row after peaking at 10,829 claims during the first eight months of 2009. The last graph shows year-to-date totals for August since 2001:

The year-over-year comparisons clearly show that both new claims and mass layoffs are down from both 2009 and 2010 so far this year. However,total employment in Colorado is still 157,000 jobs below peak levels. New layoffs and new unemployment claims continue to fall, but there is little job creation going on at the same time to provide for re-entry into the workforce. The fact that recent first-time claimants are such a small portion of the total number of jobless persons suggests that many of those people who are unemployed have been unemployed for an extended period of time. (The most recent Colorado employment data states that there are 223,000 unemployed workers in Colorado.)

Personal income growth slows in Colorado

New personal income data for Colorado was released today by the BLS.

Colorado has now surpassed the personal income peak achieved before the 2008 financial crisis. At $224.3 billion, personal income in Colorado is above the peak levels reached during the third quarter of 2008, when personal income reached $218.1 billion. Personal income is now up by 2.7 percent from previous peak levels.

In year-over-year comparisons, personal income in Colorado is up 6.1 percent from the second quarter of 2010 to the same period this year. This is the lowest year-over-year rate of increase since the third quarter of 2010, when personal income grew 5.0 percent, year over year.

Personal income in Colorado still lags the US as a whole and the Rocky Mountain region. As of the 2nd quarter of 2011, The Rocky Mountain region is 3.1 percent above peak levels and the US is 3.2 percent above its own previous peak which occurred during the second quarter of 2008.

Over ten years from the 2nd quarter of 2002 to the 2nd quarter of 2011, US personal income increased 43 percent, and in Colorado it increased 41 percent. In the Rocky Mountain region, the increase for the same period was 49 percent.

(personal income is shown in 1,000,000s)

Personal income figures are not adjusted for inflation. Over the past decade, the consumer price index in the United States West region increased 23 percent. So, income growth has outpaced inflation, but real income growth is about half of nominal income growth.

Since the peak levels reached during the third quarter of 2008, personal income is up 2.7 percent, but the CPI in the U.S. West has increased 1.9 percent during the same period.

Much of the increase that has occurred may be attributed to a 34 percent increase in personal current transfer receipts since the 2008 peak.

The effect of personal current transfer receipts

An important component of personal income is "personal current transfer receipts." These are forms of income not died to wages and employment income and include payments such as social security payments, unemployment insurance, Medicare and Medicaid.

When personal current transfer receipts are removed from personal income, income growth is not as robust.

The second chart shows personal income minus personal current transfer receipts.

(personal income is shown in 1,000,000s)

Without the inclusion of transfer receipts, personal income in Colorado is down 0.7 percent from peak levels. In other words, by this measure, Colorado has seen no personal income growth since the peak unless these transfer receipts are included.

Naturally, when adjusted for inflation, personal income (minus transfer receipts) has also declined since 2008. Since the peak period, the CPI has increased 1.9 percent. Comparing the 0.7 percent decline in income since the peak with the 1.9 percent increase in the CPI, we see that income growth has not kept up with price inflation and that real incomes have not yet returned to peak levels.

By this measure we also find that Colorado lags both the nation and the Rocky Mountain Region. Since the peak period, income minus transfer receipts in the Rocky Mountain Region has dropped 0.6 percent. Nationally, personal income minus transfer receipts is 0.01 percent above peak levels.


Overall, Colorado's real estate markets and labor markets have not suffered as much as many markets, but in a variety of ways, including personal income, Colorado is recovering more slowly than the nation. Compared to all other states, Colorado is ranked below the middle, placing in the second-to-lowest quintile. See the map here.

Generally speaking, personal income has been largely flat in Colorado since 2008 reflecting a sluggish job market and wage growth. Income growth from wages and employment has been sluggish as is shown when transfer receipts are excluded from calculations. This makes sense given that May 2011 employment data showed Colorado's total employment totals falling by 6,100 jobs when compared year over year.

Note: Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts. Total personal income will rise as population rises, even if household incomes are declining. Property income is rental income of persons, personal dividend income, and personal interest income. Net earnings is earnings by place of work (the sum of wage and salary disbursements, supplements to wages and salaries, and proprietors' income) less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis. Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for inflation).

Housing News Digest, September 22

Comcast: $10/month Internet—and cheap netbooks—for the poor
Comcast rolled out its Internet Essentials program nationwide today, offering low-income families in its service territory $10/month Internet connections and access to $150 computers.

Any family with at least one child who qualifies for the free lunch program at public schools can subscribe to a low-speed (1.5Mbps) Comcast Internet connection for $9.95 a month. Comcast guarantees that it won't raise the price and offers the plan without equipment rental or activation fees. Subscribers also cannot have "an overdue Comcast bill or unreturned equipment," and they can't have had Comcast Internet in the last 90 days.

Moody’s downgrades three US banks

Moody’s downgraded the credit ratings of Bank of America, Citigroup and Wells Fargo, three of the biggest US banks, over concerns that the US government would be less likely to rescue the lenders if they faced failure.

Colorado personal income growth slows
Colorado's personal income growth slowed to 1.1 percent between the first and second quarters, the same as the national average, the federal Bureau of Economic Analysis reported Thursday.

The deceleration in personal growth was more severe for the nation, after a 2.1 percent increase from the fourth quarter of 2010 to the first quarter of this year.

The 1990 federal census counted 60,391 people in Douglas County, located midway between Colorado's two largest cities, Denver and Colorado Springs. But a subsequent wave of suburbanization inflated the county's population 373 percent to a 2010 total of 285,465.

Colorado county has America's youngest housing stock

The 1990 federal census counted 60,391 people in Douglas County, located midway between Colorado's two largest cities, Denver and Colorado Springs. But a subsequent wave of suburbanization inflated the county's population 373 percent to a 2010 total of 285,465.

This 20-year boom is the reason why Douglas County's housing stock is the youngest in America, based on the share of its single-family houses, townhouses and apartments that have built since 1990, 76.7 percent.

Motels housing dozens of sex offenders, not telling guests
Motels are not legally obligated to tell you who is staying in the room next door, even if that person is a registered sex offender. There are no laws in Colorado restricting where sex offenders can live, although guidelines may be established by the court in individual cases.

Wednesday, September 21, 2011

September 2011 Housing Snapshot now available

At four pages, the Housing Snapshot is a very concise summary of recent housing trends. It's published 6 times a year to provide a quick snapshot of housing trends in Colorado for the non-expert.

Click here for the latest report.

Multifamily permits up 101 percent in 2011

During the first seven months of 2011 in Colorado, building permits issued for multifamily construction are up 101 percent, year over year, while permits issued for single-family construction are down 3.2 percent for the same period.

This year, through July, there have been 1729 multifamily permits issued in Colorado, and 5430 single-family permits issued. For the same period during 2010, there were 858 multi-family permits issued, and 5430 single-family permits.

For the month of July alone, single-family permits are up, year-over-year, by 17.1 percent, but multi-family permits are up 2,094 percent, reflecting a tiny permit total of 25 during July 2010. There were 961 single-family permits and 546 multi-family permits issued during July 2011. There were 820 single-family permits issued during July 2010.

The second graph shows that overall, both multi-family and single-family permits in July are at levels below what was typical over the past decade, but that both are increasing. In the case of single-family permits, seasonal factors are contributing to the uptick in permits issued.

Regionally, new construction of single-family homes showed year-over-year increases during June and July, but was unchanged during August. See here for more.

Multifamily activity has shown indications of renewed growth in the year-to-date totals in recent months. There has been much optimism within the multifamily industry about rent growth which in turn will lead to new construction.

The third graph shows that July's permit total was up from 2010 and is now at the second-highest July total since 2002. Only July 2005 reported more multifamily permits during July over the past decade. July's multifamily permit total is also the second-highest permit total for any month since 2008. Only September 2010 reported more multifamily permits, with a total of 561.

Growth in single-family permit activity suggests there is some hope among single-family homebuilders, but that demand is restrained. July's permit total for single-family units was at a 3-year high, although it remains well below typical July totals reported over the past decade.

Conclusions: This data further reinforces the notion that interest in new multifamily construction continues to increase at a much faster rate than single-family construction.

FHFA: Home prices decline across Colorado's metro areas during second quarter

The House Price Index (HPI) fell from the first quarter of 2010 to the same period this year in every Colorado metro area, including Boulder, Colorado Springs, Denver-Aurora, Fort Collins-Loveland, Grand Junction, Greeley and Pueblo.

The first quarter HPI data, released last month by the Federal Housing Finance Agency for hundreds of metropolitan areas nationwide, shows continued declines in home prices across Colorado.

Nationally and statewide, the HPI has also declined, with Colorado showing smaller declines that the nation overall. (See the analysis here.)

Year over year, the 1-year changes in each metro area were:
Boulder -2.1%
Colo Springs -4.0%
Denver-Aurora -2.8%
Fort Coll-Loveland -0.4%
Grand Junction -10.2%
Greeley -0.7%
Pueblo -1.9%

The first graph shows the year-over-year change in each region for each quarter. For the sake of visual clarity, the graph only shows data back to 2009.

Since the third quarter of 2008, the year-over-year changes have been generally negative. The graph also shows us that:

-Greeley was the only area to show a year-over-year increase since the fourth quarter of 2010.

-Grand Junction has consistently shown the largest decreases in recent years.

-The Ft Collins-Loveland area has tended to show the smallest decreases in recent years.

The second graph shows the actual HPI values for each quarter going back to 2000. In general, the HPI began to plateau during 2007 and was declining in most areas by 2008. A big exception in the Grand Junction area which continued to increase rapidly well into 2008.

Since the peak period of the first quarter of 2007, the HPI has fallen in all regions. The following shows how far the house price index is below peak levels in each area.

Boulder -4.7
Colo Springs -11.0
Denver-Aurora -7.4
Fort Coll-Loveland -4.4
Grand Junction -17.5
Greeley -12.9
Pueblo -11.8

This report overall suggests that while there is a fair amount of price stability in many areas of Colorado, prices continue to fall. When compared with Case-Shiller and local Metrolist data, we can say with a fair degree of confidence that through the second quarter of 2011, and into the third quarter, weakness in demand for for-purchase housing persists.

The index values presented and analyzed in this article are not seasonally adjusted. The data in this article is taken from the FHFA "all-transactions" data. The index is based on home price data obtained through the GSEs such as Fannie Mae and Freddie Mac.

FHFA: Colorado home price index drops 4.7 percent during second quarter

Late last month, the Federal Housing and Finance Agency released, for the first time, its Expanded-Data House Price Index. The new index is "Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick[.]"

In other words, the data source is much more broad than the old index which relied only on GSE information. Calculated Risk has a more complete write-up here.

Below, I've run an analysis using the expanded index going back to 2000. This is compiled from the newly released index, which includes archival data as well. In the future, I'll rely on the expanded-data index for the statewide numbers. However, at the metro-are level, I'll still need to rely on the older GSE-data index until FHFA expands its new index into the metro areas.


Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), fell 4.7 percent from the second quarter of 2010 to the same period this year. According to the second quarter 2011 HPI, released last month by FHFA, the home price index for Colorado, in year-over-year comparisons, has fallen for the fourth quarter in a row while the national index has fallen for the 17th month in a row.

The Colorado HPI has now down 14 percent from the peak in the state's HPI which was reached during the third quarter of 2006. The national index is down 23 percent from its peak, which it also reached during the third quarter of 2006.

The HPI for the United States fell 6.0 percent from the second quarter of 2010 to the same period this year, and the national HPI has not shown a year-over-year increase since the first quarter of 2007.

The first graph shows the Colorado HPI compared to the US HPI since 2001. Since the peak period, the US HPI has fallen farther than the Colorado index.

In this index, the US price index can be described as slightly more "bubble-like" than the Colorado index which did not experience a run up in prices to the same degree as was the case in the national index. Although Colorado's index is higher, the index value increased much more from 2001 to the peak nationally than in Colorado. From 2001 to the third quarter of 2006, the national HPI increased 51 percent, while it only increased 23 percent in Colorado. In turn, the correction has been more severe nationally.

In the second graph is shown the year-over-year change in the HPI for both Colorado and the US. This more fully shows to what degree the HPI has fallen in recent year for both Colorado and the US. With the exception of the first quarter 2011, the national HPI has fallen farther than the Colorado HPI in every quarter since the third quarter of 2007.

Overall, this index suggests that, since 2007, overall home prices in Colorado have been more resilient than has been the case nationally. In Colorado, there was even a brief period of increasing prices, year over year, in late 2009 and early 2010.

The index values presented and analyzed in this article are not seasonally adjusted.

NAR: Median home price in U.S. West falls 13 percent

Home prices in the West region of the U.S., which includes Colorado, fell 13.0 percent from August 2010 to August 2011. According to new existing home sales data, released today by the National Association of Realtors, the median home price fell more in the West than in any other region. The median home price in the South, for example, fell 0.8 percent from August 2010 to August 2011.

The first graph shows median home prices for all regions plus the U.S. The median home price in the west has been declining for the past three months, ranging from $206,000 to $189,000.

Nationally, home prices fell 5.1 percent, year over year.

Home sales transactions (closings) rose 23.2 percent in the West region, which was the second-largest increase in home sales closings of any region, year-over-year. Home sales rose 30.1 percent in the Midwest from August 2010 to August 2011, and closings rose by 21.3 percent nationally during the same period.

The second graph shows closings by region. In general, closings increased each month from January 2011 to June 2011, following a typical cyclical pattern. July's total fell unexpectedly, however, and it looks like home sale peaked for the year in June. In many years, home sales might peak in July.

Overall, Augusts's sales activity was higher than was the case during August of last year. This was expected. During the summer of 2010, sales activity fell significantly following the end of the home buyer tax credits. Many homeowners rushed to close their home sales by June 2010 in order to take advantage of the tax credit. Consequently, the second half of 2010 showed diminished home sales activity.

Conclusions: As can be seen in the first graph, home prices during recent months are down from where they were a year earlier, and the median price in the West is still below the annualized median prices for 2008, 2009 and 2010. The region shows some stability in prices but is lacking significant upward pressure in prices right now.

NAR continued to points to lack of approvals for financing as a major factor:

“The biggest factors keeping home sales from a healthy recovery are mortgages being denied to creditworthy buyers, and appraised valuations below the negotiated price. Buyers may be able to find more favorable credit terms with community and small regional banks, and Realtors® can often give buyers advice to help them overcome some of the financing obstacles,” Phipps said.

Housing starts in West region unchanged in August at 13,000 starts

Housing starts in the West Census region of the US, which includes Colorado, were unchanged from August 2010 to August 2011, counting both single-family and multi-family units. According to new housing construction and housing starts data released yesterday by the US Census Bureau, there were approximately 13,000 housing units started in the West during August 2011. Of the new units started, 8,400 were single-family structures and 4,700 were structures containing more than one housing unit.

Nationally, housing starts fell 5.8 percent during the same period, with total housing starts falling to a total of 53,000.

Total housing starts remain well below peak levels both nationally and in the West. August 2011 housing starts in the West were 76 percent below the peak reached during May 2004. Nationally, August 2011 was 73 percent below peak levels. The national peak in housing starts was reached during May 2005.

Multifamily starts have rebounded more than single-family starts. In the West, single-family starts are 81 percent below peak levels while multifamily starts are only 30 percent below peak levels.

The West census region includes California, so given the size of the West census region, the fact that total housing starts are at 13,000 indicates that new home construction continues to be very light throughout the region. Housing starts totals ranging from 35,000 to 45,000 were common from 2004 to 2006.

The first graph shows the difference between single-family starts and starts for structures with more than one housing unit. Both remain near ten-year lows, but single-family starts rose 2.4 percent from August 2010 to August 2011. Starts for structures with more than one unit decreased by 4.0 percent during the same period, falling from 4,900 units during August 2010, to 4,700 units during August of this year. The drop in new multifamily starts is a change from a trend established in recent months during which multifamily starts showed year-over-year increases for several months in a row.

The second graph shows month-by-month comparisons in housing starts for each year in the West. August's housing-starts total increased from July to August. Over the past decade, starts have often fallen from July to August, so this year's month-over-month increase from July to August indicated a little bit of strength month to month. August 2011's total remains tied with last August for a three-year high for August, but remains well below totals reported from 2003 to 2008.

More sustained growth was visible in starts for structures with more than one housing unit. August's total was lower than August 2010, but is at a 12-month high. The August 2011 multifamily total for starts is the second-highest total for any month since August 2008. August is apparently a busy month for multifamily starts.

Starts for buildings with more than one unit were relatively numerous in August, compared to most months in recent years, but the fact that totals remain below August totals for every year except 2009 (in the graph) there is mildly growing -yet restrained- activity in housing starts for multifamily structures.

Housing News Digest, September 21

Lack of housing pushes UCCS to expand
COLORADO SPRINGS, COLO. -- This year's freshman class at the University of Colorado at Colorado Springs is the largest to date with 1,350 students.

The larger than usual freshman population is creating growing pains, the University has run out of dormitory space.

West Colfax HUD project likely to benefit area economy
The framed beginnings of what will be a five-story building off West Colfax Avenue and Zenobia Street is more than a start to 101 new homes, it is a fresh start for the local economy, HUD officials said Tuesday.

The Colorado Coalition for the Homeless is partnering with the U.S. Department of Housing and Urban Development​ and the Neighborhood Stabilization Program to bring increased home values and revitalization to the area.

The new building will house low-income working families and individuals and the chronically homeless, said John Parvensky, president of the Colorado Coalition for the Homeless.

Community banks seek moratorium on big bank mergers
The Independent Community Bankers of America asked federal regulators this week to launch a moratorium on bank mergers and acquisitions involving financial firms with $100 billion or more in assets.

If regulators heed the trade group's advice, the solution would effectively halt Capital One's (COF: 42.84 +0.99%) planned acquisition of ING Direct USA until Dodd-Frank rules designed to monitor too-big-to-fail banks are solidified.

A rough 10 years for the middle class
Last week, the government made gloomy headlines when it released the latest census report showing the poverty rate rose to a 17-year high. A whopping 46.2 million people (or 15.1% of the U.S. population) live in poverty and 49.9 million live without health insurance.

But the data also gave the first glimpse of what happened to middle-class incomes in the first decade of the millennium. While the earnings of middle-income Americans have barely budged since the mid 1970s, the new data showed that from 2000 to 2010, they actually regressed.

MBA: Mortgage Purchase Application Index declines, Record Low Mortgage Rates
The MBA reports: Mortgage Applications Increase in Latest MBA Weekly Survey

The Refinance Index increased 2.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 4.7 percent from one week earlier.

Tuesday, September 20, 2011

Housing News Digest, September 20

Housing Starts decline in August
Housing Starts:
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 571,000. This is 5.0 percent (±10 6%)* below the revised July estimate of 601,000 and is 5.8 percent (±12.0%)* below the August 2010 rate of 606,000.

Single-family housing starts in August were at a rate of 417,000; this is 1.4 percent (±10.3%)* below the revised July figure of 423,000. The August rate for units in buildings with five units or more was 148,000.

M.D.C. Holdings Announces Notice of Redemption of all Outstanding 7.0% Senior Notes
DENVER, Sept. 20, 2011 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) today announced that it will redeem all of its outstanding 7.0% Senior Notes due 2012 (the "2012 Notes"), which total $86.3 million, on October 19, 2011. The Notes will be redeemed at a redemption price that will include a premium based on the present values of the remaining scheduled payments on the Notes as described in the indenture, together with accrued and unpaid interest on the Notes to the redemption date of October 19, 2011.

Hines building at Interlocken
Hines, the international real estate company, has began construction of a 186,000-square-foot office facility at the Interlocken Business Park in Broomfield.

Continental Realty Advisors buys apartments
Continental Realty Advisors (CRA) of Denver bought a 355-unit apartment complex near Louisville, Ky., for $25 million, according to a news release Monday.

The company, which owns multifamily housing properties nationwide, plans $4 million in upgrades to the complex, called Jamestown at St. Matthews. The property will be added to its CRA-B1 Investment Fund.

On the bright side, building permits are up
Permits for news construction increased in August, government data showed on Tuesday, offering a glimmer of light in otherwise gloomy numbers for housing starts.

The Commerce Department reported that building permits hit a seasonally adjusted annual rate of 620,000 last month, up 3.2 percent from a revised rate of 601,000 in July.

But the report overall was a bummer for those seeking a rebound in real estate, which (along with more jobs) would be a necessary ingredient to help resuscitate the overall economy.