Wednesday, May 17, 2006

Foreclosures 'Saturate' Low End Market: Denver

The Denver Post has this update on Colorado. "Colorado has reported the nation's highest foreclosure rate for the second month in a row. Even so, the number of Colorado homes at some stage of foreclosure fell to 3,706 in April from 5,392 in March, a 31 percent decline."

"Colorado has one foreclosure filing for every 494 households, the highest rate of any state. Nationally, the foreclosure rate is one of every 1,268 households."

"Adams County continued to lead the state with the highest foreclosure rate, followed by Arapahoe, Denver and Weld counties. Adams County counted 299 foreclosures initiated in April, down from 343 in March, Adams County Public Trustee Jeannie Reeser said."

"The bulk of the new foreclosures are coming from homeowners who used mortgages with adjustable interest rates to stretch and buy more home than they could otherwise afford, Reeser said. As interest rates have risen, so too have payments, often by several hundred dollars. 'A lot of elderly, a lot of young people borrowed way too much. It is just devastating,' she said."

"Distressed home sales are saturating the market for properties under the metro area's May median home price of $250,000, said Ed Jalowsky, a broker in Denver. A large number of homes at risk of foreclosure are being sold for less than the mortgages on them, adds Jalowsky, who was involved in one such 'short sale' in Thornton on Tuesday."

"Of Colorado foreclosures in April, 2 percent were in the notification or preforeclosure stage, 80 percent involved properties headed to auction and 18 percent were properties owned."

"The large number of distressed properties is boosting the inventory of homes for sale in the metro area, making it even harder for sellers looking to get out of mortgage payments they can't afford. The number of homes for sale in the metro area hit a record of 29,045 last month, surpassing the previous high of 28,043 reached in June 2004."

"'We will see more inventory and more pressure on the low end,' Jalowsky said. 'I don't see any immediate relief in the near future.'"


At 9:17 AM, Blogger Ben Jones said...

'the number of Colorado homes at some stage of foreclosure fell to 3,706 in April from 5,392 in March, a 31 percent decline.'

This is good news. IMO almost nobody wants regular folks to default just so they can find a deal on a house. Plus, if one is interested in buying into a particular market, it benefits no one if the economy is in a shambles. That said, these monthly numbers from foreclosure tracking firms are subject to wide swings. Colorado isn't out of the woods yet.


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