John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Tom Clark, executive vice president of the Metro Denver Economic Development Corp., focused on Denver-area housing in his December report that he released today.
The report says that regional business confidence levels are increasing and the correction in housing may end – or at least stabilize.
Clark noted that the “annual declines in a majority of the S&P/Case-Shiller Home Price Indices have reached bottom, and the indices for Denver are close to a positive annual return. (For my earlier blog on the most recent Case-Shiller report go to this link.)
“Additionally, according to the National Association of Realtors (NAR), the Denver-Aurora-Broomfield metropolitan statistical area was among 30 areas that reported an increase in median home price between the third quarters of 2008 and 2009. The increase was also the first reported for Metro Denver in two years and contrasted with an 11.2 percent over-the-year decline in the nationwide median,” the report notes.
Metro Denver home sales rose 2.9 percent between September and October. October home sales were 7.6 percent below sales from October 2008, but this over-the-year gap in sales was the smallest reported since December 2008, according to the report. (For more on the Denver-area housing market in October, go to my previous blog.)
“Put another way, the pace of Metro Denver home sales is slowly strengthening and should reach a point early next year where monthly sales exceed those reported in 2009,” Clark said.
Slow improvements in home sales have also helped stabilize home prices in the Denver area. Denver. The October average sales price for single-family homes increased 4.6 percent over-the-year, and the average price for the first 10 months of the year moved within five percent of the average for the same months of 2008. The year-to-date average condominium price was down 7.1 percent in October, but condominium prices are also showing signs of gradual improvement.
Challenges certainly remain for housing markets, the report notes.
“The Mortgage Bankers Association’s most recent National Delinquency Survey shows roughly one in seven U.S. mortgages were past due or in foreclosure at the end of the third quarter, and overall delinquency rates continue to break records nationwide. In Colorado, closer to one in 10 home loans were delinquent or in foreclosure at the end of the third quarter. The state’s overall delinquency rate of 6.7 percent was the highest reported since at least 1990, Colorado still had the 10th-lowest rate in the nation.”
The report also notes that “unemployment has largely replaced subprime loans as the key driver of mortgage delinquency, although additional resets of adjustable rate loans are looming in 2010. Stronger trends in home sales and prices can only help with these challenges, though, and government programs including the now extended and expanded homebuyers’ tax credit should also help housing markets stabilize in the months ahead.”
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
