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RealtyTrac: Huge foreclosure drop in state, Denver

Highlights:

  • RealtyTrac releases mid-year foreclosure report.
  • Colorado foreclosure drop 48%.
  • Rising home prices big help.

Colorado showed a 47.8 percent drop in total foreclosure filings in the first half of the year, compared with the first six months of 2012, according to a RealtyTrac report released today.

Colorado’s drop in foreclosures was more than double the national average of a 23.4 percent drop, according to the report by the Irvine, Calif.-based company that tracks the foreclosure process from the first filing until the home is returned to the lender as a REO (Real Estate Owned).

Overall, Colorado ranked No. 17 for foreclosure activity, a far cry from previous years when it was in the top 10 and even at times showing the biggest percentage increases of any state in the nation, according to RealtyTrac.

Individual Denver-area counties did even better than the overall state, RealtyTrac reports.

For example, Douglas County showed a 89 percent year-over-year drop and Jefferson County showed a 67.3 percent decline. Broomfield was down 64.9 percent, year-over-year, while Adams and Boulder were each down 54.8 percent. Denver was down almost 56 percent.

Ryan McMaken, economist for the Colorado Division of Housing, who analyzes foreclosure data using a different methodology, said his research doesn’t find such big declines, but the trends are the same.

“The huge drops of 50 to 60 percent seem a bit big compared to my numbers, but the overall trend is the same between our numbers and Realtytrac’s right now,” McMaken said.

He said there “are still no signs of a change in the existing trend, which is a trend of ongoing declines in total foreclosure activity. Importantly, even the mountain areas are showing drop offs in foreclosure activity, which means that the downward trend is now statewide.”

He said there would need to be an increase in the delinquency numbers by the Mortgage Bankers Association “before we see any shift to a rising trend in foreclosures, and so far, there’s no evidence of that.”

At the end of June, the year-to-date average of a single-family home sold was a record $328,427,  10 percent higher than the $298,075 average price in mid-year 2012, according to an earlier report by independent broker Gary Bauer. Bauer based his report on Metrolist data.

The rising prices continue to help owners avoid foreclosure,” McMaken said.

That nation also is seeing a drop in foreclosures, although it is not as robust as in the Denver area or Colorado.

“Halfway through 2013 it is becoming increasingly evident that while foreclosures are no longer a problem nationally they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process,” said Daren Blomquist, vice president at RealtyTrac.

“The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion,” he continued.

As in Denver, the national housing recovery is helping.

Many metropolitan areas, for example, are seeing even bigger percentage gains than Denver, according to Case-Shiller.

“Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of these distressed properties, either at the foreclosure auction to a third-party buyer, or by repossessing the property at the auction and subsequently selling it as a bank-owned home,” Blomquist said.

Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal