John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... The Denver-area economy shows signs of improvement so-far this month, with much of the strength lying in the housing market, according to a Metro Denver Economic Development Corp. report released today.
Nine indicators – including the indicator for foreclosures – moved positively for the month, compared to seven indicators in the prior report. Six indicators moved in a positive annual direction, compared to one indicator in the prior month’s report.
Recent residential real estate data suggest housing markets are shifting due to a variety of influences. The extension of the homebuyers’ tax credits in late 2009 removed a sense of urgency for buyers, therefore, existing home sales nationwide and in Metro Denver have slowed.
Tax credits still key
“Many buyers still hoping to receive the credits are now returning to the market, though, and brokers say the pace of home sales should accelerate in the coming months,” said Patty Silverstein, chief economist for the Metro Denver EDC and president of Development Research Partners.
Increased sales volume should help home prices, which are stabilizing – and even rising – in some markets. The Denver-Aurora-Broomfield metropolitan statistical area, for example, was one of 24 metro areas to report an increase in median home price between 2008 and 2009.
Mortgage delinquency rate to fall
As home prices continue to stabilize, mortgage delinquency rates should gradually subside. Data from the Mortgage Bankers Association show the nationwide delinquency rate declined in the fourth quarter of 2009, and Colorado’s rate ranked ninth-lowest in the nation. Significant delinquency challenges remain, though, as roughly one in 17 Colorado home loans was at least 90 days past due or in foreclosure in the fourth quarter.
Foreclosures are an even greater concern in California, Nevada, Arizona, Illinois, Michigan, and Texas – all key economic development competitors with Colorado.
“These six states alone represented 60 percent of U.S. properties with foreclosure filings in January,” said Silverstein.
Housing prices stable
The nationwide median home cost for 2009 ($173,200) was down nearly 12 percent over-the-year, while the median in the Boulder MSA ($346,000) fell by just 3.8 percent. Price trends were stronger in the Denver-Aurora-Broomfield MSA, where the 2009 median price of $219,900 represented a slight, 0.3 percent increase from the 2008 median. The Denver-Aurora MSA was one of 24 metropolitan areas to report an increase in median home price between 2008 and 2009, and the region’s median price ranked 26th-highest in the nation. The Boulder MSA’s 2009 median home price ranked 11th-highest overall.
Data from the Mortgage Bankers Association’s National Delinquency Survey for the fourth quarter of 2009 show Colorado’s rate of mortgage delinquency – 6.91 percent – ranked ninth-lowest in the nation.
Unemployment a concern
Clearly, residential markets are facing a combination of early momentum and continued challenges, the report notes. High unemployment and policy changes in the months ahead – including an end of the Federal Reserve’s financial support for mortgage-backed securities and the expiration of the homebuyers’ tax credits – will bring additional hurdles. Ideally, residential markets will build momentum in the coming months that can sustain a recovery as the policy environment changes.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
[...] was one of 24 metro areas to report an increase in median home price between 2008 and 2009. http://insiderealestatenews.com/2010/03/denver-housing-data-focus-of-economic-report/ 39.558244 [...]
The more we can share positive news with the market place , the more we can help build consumer confidence which hopefully will lead to more jobs and consumer spending.
ONwards and UPwards!
S.Robert – Sharing positive news isn't going to change the fundamentals that aren't positive; we all remember the famous "lipstick on a pig" discussion of a year and a half ago — the same applies here. While there are certainly some good signs out there, when the overriding fundamentals of housing are still overwhelmingly weak, and potentially heading worse, no rational consumer is going to believe the hype.
I've read several articles written by Mr. Rebchook and I strongly feel that I can't trust a word from Mr. Rebchook writing. You don't have to be an expert to see what is going on around Colorado and our country, just some articles written by this gentleman don't make sense at all. I am tired of people who is pumping local economies and giving people false sense of positive news. Many of our citizens lost a big portion of their retirement, their homes, jobs, stocks and still loosing those. We need to diversify our economy, bring jobs, and don't gamble with real estate market period. We need some kind of health care reforms, we can't afford anymore health care industry to raise insurance premium whenever they want to. And we need more educated people who will help us and guide us to positive economy. Not pumpers and dumpers.