Friday, October 27, 2006

"Appears To Be No End" To Denver Defaults

The Rocky Mountain News reports from Colorado. "Prompted by local business leaders' concerns over the area's real estate market, economist Patty Silverstein has issued a report that says Denver's high foreclosure rate will continue, somewhat abated, into 2007. 'A lot of conditions are improving, but we're not out of the woods yet,' Silverstein said."

"Residential foreclosures in metro Denver are on pace to hit a record high in 2006 of about 19,200. Through the third quarter, 14,132 foreclosure cases were opened in the seven-county region, a 34.2 percent increase over the January-September period in 2005."

"What's happening, Silverstein said, is a longer lag between the negative job-loss news and the foreclosures, when compared with Denver's problems in the 1980s. During the last great foreclosure boom, it was roughly two years between Colorado's job losses and its high foreclosures, Silverstein said. Colorado's recent job- loss peak, in 2002 and 2003, is now three to four years in the past."

"'Given the severity of it and the slow growth since then, we've had a longer lag,' she said."

"New or recently popular mortgage products also have played a role, Silverstein notes, and ARMs represent a disproportionate share of Colorado foreclosures: In the second quarter of 2006, 52.5 percent of the loans in foreclosure in Colorado were ARMs, compared with 35.7 percent nationally."

The Denver Post. "Despite solid growth in jobs, incomes and population, metro Denver's foreclosure rate is on track to hit 1.7 percent of all homes this year, according to an analysis. That rate is a midpoint between last year's 1.3 percent and a record 2.1 percent set in 1988, when an oil bust drove up unemployment levels and more people were leaving the metro area than moving in."

"The high foreclosure rate in Colorado, which has led the nation for the past seven months, is part of a downward trend in the overall housing market."

"Builder incentives and price cuts are putting pressure on the median prices of existing single-family homes, which fell 2.2 percent in the metro area and 2.5 percent nationally year-over- year for September. There were 31,450 unsold properties in the metro Denver market in September, compared with 27,248 a year earlier."

"For the past five years, home prices haven't appreciated in a "foreclosure belt" stretching from Weld to Adams to Arapahoe County, said Lou Barnes, a mortgage banker in Boulder. Overbuilding has dampened price appreciation, which has contributed to high foreclosures in those areas because homeowners have less equity and aren't able to sell quickly, Barnes said."

"Economist Patricia Silverstein links the genesis of the current foreclosure cycle to the loss of 61,200 metro-area jobs in 2002 and 2003. Many workers had difficulty replacing the incomes they lost in the downturn and appear to have turned to higher-risk mortgage products such as no-money-down and adjustable-rate loans to stretch their finances."

"Broker Phil Heter, whose company only sells foreclosed homes on behalf of lenders and Fannie Mae, said that while there are huge differences between now and 1989, there appears to be no end to the number of foreclosed homes hitting the Denver-area market."

"'We were busy before, but it was like they just opened the faucet wide open 90 days ago,' Heter said."

3 Comments:

At 6:58 PM, Blogger screwnectady said...

Not Denver but perhaps a hint that foreclosure/Reo/auctions are becomming less popular and therefore more opportune-

I bought my foreclosure at 65 cents on the dollar ($35K upstate NY) in July 2006. As luck would have it, my bid fell between the city tax sales and county tax sales on alternating weeks.

What is truly interesting is on October 25, 2006, the first auction since I have been looking for over 1 year happened with almost 10 cents on the dollar slipping through the cracks because people have just stopped watching although many people used to watch for auctions like hawks.

$3500 bought a decent house on 10/25/2006
http://tinyurl/y2z8q9

Rated at zillow at $30,500
http://tinyurl/y7bufx

And as high as $45K+ in 2003
see USPDR http://tinyurl/y8fdyq

My theory is the mapquest link at www.williamsauction.com had a mispelled town Straford NY instead of Stratford NY and no zip code. This discouraged the lazy from searching. I missed it but could have picked up a house for under $5K if I had hadn't been to lazy to watch and the other bidder didn't counter my higher bid.

 
At 7:07 PM, Blogger screwnectady said...

Sorry about the URLs
$3500 bought a decent house on 10/25/2006
http://tinyurl.com/y2z8q9

Rated at zillow at $30,500
http://tinyurl.com/y7bufx

And as high as $45K+ in 2003
see USPDR http://tinyurl.com/y8fdyq

 
At 1:21 PM, Anonymous Anonymous said...

Hey, has anyone else heard of this new builder incentive called Pictured Home, my builder offers this service. Pictured Home is going to take digital 360 pictures of my new home during the entire construction process. I can log into my own personal account at picturedhome.com to view the photos.

Other cool things are you can store information about your home’s flooring, paint color, trim work on the website. I have two kids and I am constantly painting spots where they write on the walls with their crayons. Now I can store the manufacturer and color code of the paint, so I can find it easily at my hardware store.

Also, Pictured Home can capture an entire inventory of your home’s valuables for insurance purposes. A couple years ago, my home was flooded and I had to replace my big screen TV but I lost the receipt and didn’t have a photo of the TV. I fought with my insurance company for months to get them to cover the cost of the TV.

I’ll post an update when I receive my first set of photos.

 

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