The Foreclosure Report

Former Homeowners Turn To Apartments: CO

The Coloradoan has this update on that state. "With Colorado topping the nation for foreclosure rates, some homeowners are returning to the rental market, one that has tightened in Northern Colorado during the first quarter of this year. Some first-time homeowners who signed adjustable rate mortgages have struggled to keep up with house payments that have increased by up to 50 percent."

"'Vacancy rates have gone down a bit, but owners are still behind the power curve,' economist Gordon Von Stroh said. 'To attract residents and bring vacancy rates down, apartment owners had to offer incentives or discounts, despite their costs increasing.'"

"Colorado had the highest foreclosure rates in the nation in March and one of the highest in the nation during the first quarter as national foreclosure rates also increased. Von Stroh's data, collected from nearly all apartment managers in the state, shows more homeowners returning to the rental market."

"With zero-percent down-payment loans, and adjustable rate mortgages popular in the past couple years, it has probably been too easy to qualify for loans, said Carrie Ann Gillis of the Colorado Apartment Association in Fort Collins. 'With zero down, people have been led to believe it was an affordable dream for them. But then their furnace breaks or they have a health issue,' Gillis said. 'It's a crime to offer the American dream to those who just aren't ready for it yet. They get into a situation they can't get out of.'"

"The ideal vacancy rate in a market is about 5 percent, Von Stroh said. Loveland had the lowest percentage of apartments available in the region, with a 6.3 percent vacancy rate. Before Loveland's retail boom, the city had reached a peak vacancy rate of 29 percent at one point in the past several years, Von Stroh said."

"Typically, Fort Collins and Greeley mirror each other in apartment vacancy rates. Greeley's vacancy rate was 8.1 percent during the first quarter. Vacancy rates are dropping across the Front Range for a number of reasons. Interest rates are rising, narrowing the pool of qualified candidates for homeownership."

posted by Ben Jones @ 5:25 PM