Realtor Data: January median prices fall

Median home prices for single-family homes during January 2012 fell in Colorado and in the Pikes Peak region and in the metro Denver area. According to median home price data for January, released by the Colorado Association of Realtors, the median home price for single-family homes in the Denver area was $221,373 during January, which is an decrease of 1 percent from January of 2011. Statewide, the median home price was $201,058 during January, a drop of 7 percent from the same month last year. The median price in the Pikes Peak region fell 5 percent, year over year, falling to $176,364 during January.

The first graph shows the median single-family home price for the state and for the metro Denver and Pikes Peak regions. Median home prices fell dramatically in all three measures following the financial crisis of late 2008, but moved back up quickly by mid-2009. Since mid-2009, however, median home prices have been largely flat in metro Denver. In the Pikes Peak region, on the other hand, the median price remains well below peak levels and was lower during most months of 2011 when compared to 2010. Statewide, as is typical, the median price has been more volatile, but has not recovered as much as the metro Denver median. Statewide, sales prices are likely being pushed down by declining markets in western Colorado and in the central mountains.



The metro Denver area, where the median price is 16 percent below its June 2007 peak levels, has recovered the most. Metro Denver prices appear to have stabilized since 2009 and the median price generally moves between 220K and 240K. The statewide median price is now 18 percent below its June 2006 peak. The Pikes Peak median price fell in January to 23 percent below its July 07 peak, falling below 180K. The Pikes Peak area's median price ranged between 181K and 197K during 2011.

During recent months, with the exception of metro Denver in November and December, the median prices appear to have entered negative territory when compared to the same months of the previous year. As can be seen in the second graph, the year-over-year changes in all three areas have been generally negative each month for the past six months, and all three areas were down during January 2012 when compared to January 2011.



This downward trend is mirrored in other home prices indices for Colorado such as the Case-Shiller, CoreLogic and FHFA indices. See here for past analyses using other indices.

The home price data provided by the Colorado Association of Realtors is based on home sales transactions that are listed in the MLS systems for each area and do not include for-sale-by-owner transactions or new homes sold directly by home builders.

Year-end 2011 Pueblo Housing Snapshot now available

The New Pueblo Area Housing Snapshot is now available. It covers housing and economics trends in the Pueblo area through the end of 2011.

See the Housing Snapshot archives for all regions as they become available.

Denver County drives new multifamily activity during January

During January 2012, 80 percent of new multifamily permits issued were in Denver County alone. Only two other counties reported any new mutli-family permit activity during January 2012 at all: Arapahoe and Jefferson.

According to new multifamily permit data for Colorado counties, 282 multifamily permits were issued during January 2012, and 225 of them were issued in Denver County. 49 were issued in Arapahoe County and 8 were issued in Jefferson County.

No other county in the state reported any new multifamily permits during the month.

For more historical info on multifamily permits, see here.

During January 2011, 137 multifamily permits were issued in the reporting counties, and 126 of those, or 92 percent, were issued in Denver County.

With so little demand for new condominiums right now, it is safe to assume that the lopsided majority of new multifamily permits being issued are for rental housing. We see most of this activity in areas where vacancy rates have been tight or look to be tight for the near to mid-term.

The downtown Denver area has been one of the most in-demand areas for rental housing in recent quarters, and recent demand for new construction in the neighborhood has made Denver a large part of new multifamily construction.

The Census Bureau has not yet released its 2011 year-end report which include more data from most of the state's 64 counties. We will publish an analysis when that data becomes available.

Denver County Permits

Multifamily permits during January in Denver were at a ten-year high and they have increased year over year since 2009. There were 12 multifamily permits issued during January 2009, but by January 2012, the January total had grown by 1,700 percent to 225 permits. Notably, January 2002 produced more than 600 multifamily permits, but much of that was due to new development that had been planned in response to Amendment 24, an Amendment designed to control growth in Colorado. Since the defeat of Amendment 24, multifamily permitting during January has been relatively subdued with the exception of January 2005 and 2012.

El Paso dominates in new single-family permits in Janaury

Of the 624 new single-family permits issued during January 2012, 127 of them, or 20 percent, were issued in El Paso County alone. According to new single-family January permit data by county, released by the Census Bureau, the counties with the largest numbers of single-family permits issued during 2011 were El Paso, Douglas, Weld and Denver.

See here for recent posts about building permits.

New single-family permits during January 2012
El Paso 127
Douglas 108
Weld 74
Denver 60


Also:
Adams 40
Arapahoe 43
Boulder 23
Broomfield 14
Chaffee 7
Elbert 1
Jefferson 45
Larimer 44
Mesa 22
Park 4
Pueblo 9
Routt 2
Teller 1

(Note: All permits discussed in this article are single-family permits.)

However, when permit totals are adjusted to the number of existing housing units in each county, the counties with the larges amounts of permit activity were Douglas, Weld and Chaffee counties.

The first map shows the relative amount of single-family permit activity adjusted for the existing size of the housing stock in each county. The counties are then broken out in quartiles reflecting the amount of single-family activity compared to other counties. The top quartile has the largest amount of new permitting compared to the number of existing units. The bottom quartile has the smallest amount.

Top Q: Brown
2nd Q: Green
3rd Q: Orange
Bottom Q: Yellow
No data or no permits: White



During January 2012, the areas with relatively few new single-family permits relative to the size of the existing stock are Pueblo, Jefferson, Arapahoe and Boulder counties.

In a larger context, single-family permits remain well below totals experienced prior to 2007. From 2006 to 2008, single-family permits in the state decreased 60 percent from 31,000 to 12,000. Permit activity appears to have bottomed out in 2009. When discussing permit activity from 2008 to the present time, we're looking at permit totals that are near 20-year lows.

See here for a discussion on historical permit data by county.

It is also helpful to see which counties have shown the largest increases and decreases in permit activity. In the map below, we see that comparing January 2011 to Janaury 2012, Adams, Boulder and Douglas counties, with increases of 100 percent or more, were the counties with the largest increases in single-family permit activity. Chaffee, Denver, El Paso, Jefferson and Weld Counties all reported year over year increases of more than 40 percent.



Brown: Increase of 25 percent or more*
Green: Increase of 1 to 24.9 percent**
Orange: Decrease of 1 to 24.9 percent
Yellow: Decrease of 25 percent or more
White: No data or no change

*I have included Broomfield County in the "brown" category, due to its increasefrom 0 to 14 permits, year over year. Technically, a rate of increase cannot be calculated mathematicall from a starting point of zero.
**I also included Teller county in the "green" category for its increase from 0 to 1.
*** The number of permits in Routt County was unchanged at 2, year over year.

Largest increases among metro counties:
Adams 100 percent
Boulder 109 percent
Douglas 125 percent

Multifamily permits up 109 percent in Janaury compared to 2011

During Janaury 2012 in Colorado, building permits issued for multifamily construction were up 109 percent, year over year, while permits issued for single-family construction were up 41 percent for the same period.

During the month, 287 multifamily permits were issued in Colorado, and 696 single-family permits were issued. During January 2011, there were 137 multi-family permits issued, and 492 single-family permits issued. January 2012's single-family permits were down 74 percent from 2006's January peak of 2,719 permits. Multi-family permits during January were down 61 percent from 2008's January peak of 739 permits.



The second graph shows that overall, both multi-family and single-family permits in January were at levels well below what were typical over the past decade. During recent months, however, both multi-family and single-family permits have shown a slow upward trend.



During January 2012, the number of new multi-family permits issued was up from January 2011, and was the highest January total reported in four years. January continued a general trend in which monthly multi-family permits have been at multi-year highs during recent months.



December was another flat month for single-family permits for the most part, although January's single-family total was at a four-year high. Overall January totals were well below January totals seen before 2009, but has nevertheless shown a mild growth trend since.



Once again, multi-family growth trends outpaced single-family growth.

Case-Shiller: Metro Denver home prices at 2001 levels

Case-Shiller released its home price index for December today. The home price index for the Denver area fell 0.9 percent from November to December, and fell 0.4 percent,year over year, from December 2010 to December 2011. Prices fell in December due at least partially to seasonal factors, although the overall index for the year remains below the index values seen during 2010. The first graph shows the index values since 2001:



According to S&P;'s press release, home prices are still facing headwinds and have "not yet stabilized":

“After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today’s report we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011. The National Composite fell by 3.8% in the fourth quarter alone, and is down 33.8% from its 2nd quarter 2006 peak. It also recorded a new record low.

In year-over-year comparisons for December, Atlanta showed the largest drop, with a decline of 12.8 percent, while the index in Las Vegas fell 8.8 percent. Year over year, home price indices fell in 19 of the 20 cities included in the study. Only Detroit showed increases.

The second chart shows trends in the Case-Shiller index for the Denver area and for the 20-city composite index. It is clear that Denver did not experience the kind of price bubble that occurred in many other metropolitan areas, and consequently, the index has not fallen nearly as far in Denver compared to the larger composite. Prices have been largely flat since mid-2009.



The 20-city composite is down 34 percent since it peaked in July 2006, but the Denver index is down only 12 percent from its August 2006 peak.

Nevertheless, the Denver index during December was at the lowest December value seen since 2001.

The third chart compares year-over-year changes in the Denver area index and in the 20-city composite. The Denver index did not achieve the rates of growth experienced by the national index, but the Denver index did not experience comparable rates of decline following the onset of the national recession either. Overall, the index has been less volatile in Denver than has been the case for the 20-city composite, and the rates of decline in Denver have been smaller in recent months. However, year-over-year growth in the 20-city composite during December was negative with a decrease of 4 percent, and the Denver area index’s fall of 0.9 percent is the 18th month in a row in which the growth rate has been negative. In the 20-city index, the year-over-year change has been negative for the most recent 15 months.



The last chart provides a closer look at year-over-year changes in the Denver index. Note the the change has been below zero since June 2010, and likely reflects the end of the homebuyer tax credit’s end which has led to a fall in demand and a decline in the home price index. The upward trend in the index in response to the tax credit is clear during late 2009 and early 2010. Since the end of the credit, however, home prices have consistently drifted downward.

Housing News Digest, February 28

U.S. housing secretary says FHA faces big risks

Feb 28 (Reuters) - The U.S. Federal Housing Administration faces "considerable risks" to its finances and the Obama administration will continue to scale back the agency's presence in the mortgage market, the top U.S. housing official said on Tuesday.

Housing and Urban Development Secretary Shaun Donovan told Congress that efforts to protect the FHA's dwindling capital reserves were not only important in their own right, but that they could open the door to more private mortgage funding.

Housing Prices Dip For the Fourth Time in Three Years

After the Great Recession, there were some pundits who theorized that real estate would make a “W-shaped” recovery. With the S&P;/Case-Shiller housing prices out this morning, it’s now clear that there are not one, but two “Ws” in the chart — and that’snot a good thing. Index prices fell 1.1% from November to December. In other words, we’ve now experienced a quadruple dip.

Manhattan Lures REITs Capitalizing on Soaring Rents
Tom Toomey, chief executive officer of real estate investment firm UDR Inc. (UDR), is betting the best rental deal in Manhattan is owning the whole building.

“Financing and underwriting are much tighter,” Toomey said in a telephone interview. With purchases requiring larger down payments, “people are going to stay renters for a long time,” said Toomey, who’s based in Highlands Ranch, Colorado.

Denver’s Latest New Home Community, the Lakes at Westwoods
Denver, CO, February 28, 2012 --(PR.com)-- Denver’s latest Taylor Morrison community, the Lakes at Westwoods, opens in grand fashion on March 17 with brand new Denver homes for sale, giveaways and the popular Denver Cupcake Truck on hand with free gourmet cupcakes.

The Lakes at Westwoods will offer new Denver homes for sale that include 3 to 5 bedrooms with 2 to 3.5 baths and will range from 2,638 to 3,534 square feet. The Lakes at Westwoods offers great views of the Rocky Mountains and is bounded by Broad Lake to the north and Hyatt Lake to the south with plenty of open space surrounding the community. Retail shopping, restaurants, and a newly remodeled supermarket are also located nearby.

NJ Supreme Court rules firms must list lender on foreclosure notice
The New Jersey Supreme Court says foreclosing parties must list the lender's name and contact information in addition to a loan servicer's information to comply with New Jersey Law when giving a party notice to foreclosure.

The court issued that opinion in the US Bank v. Guillaumes case, which drew friends of the court briefs from the state's banking association and numerous financial firms that considered the processing burdens that could stem from a decision in the case.

Housing News Digest, February 27

U.S. housing market still dragging but landlords are sitting pretty (New York Times)
Rent increases are greatest in places like San Francisco; Austin, Texas; and Boston, where technology companies in particular are hiring, as well as in New York and Washington, D.C. But cities like Chicago and Seattle, where house prices are still declining quite sharply, have had rental increases too.

Metro Denver's vacancy rate was 5.4 percent in the fourth quarter of last year, according to the Colorado Division of Housing.

"We are more of a renter nation than we have been for a while," said Christopher J. Mayer, a professor of real estate at the Columbia University Business School.

New-home sales dip after four straight monthly gains
WASHINGTON — Sales of new homes dipped in January but the final quarter of 2011 was stronger than first estimated.

The Commerce Department said Friday that new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.

Home sweet home? Not so fast
How tough? A $26 billion civil settlement with five banks over foreclosure abuses, announced a few short weeks ago, is one of the largest agreements of its kind in U.S. history. And, judging by the headlines, it looks like a big deal. But in actuality, it pales in comparison with the $7 trillion in wealth lost by American households in the housing collapse.

Short Sales Bring 24% Greater Returns than Foreclosures
The real estate professionals at Massachusetts-based McGeough Lamacchia Realty have been proponents of short sales for quite some time, insisting that everyone comes out ahead when a short sale is achieved as opposed to a foreclosure. Now they’re sharing the facts that back up their claim.

Joint federal-state lawsuit accuses company of foreclosure rescue scam
Bella Homes LLC, a real estate investment company, and its principals are being sued by the federal government and the state of Colorado for allegedly preying on homeowners in foreclosure.

Bella Homes LLC, is a limited liability company organized in Delaware. According to the lawsuit, the company operates from the principals' private residences in Arizona and Georgia, and maintains "virtual offices" in Atlanta and Scottsdale, Arizona.

New homes for sale in U.S. West at historic lows

In January of this year, new single-family home sales rose in the US, and were flat in the West region, which includes Colorado. According to new data released by the Census Bureau today, new home sales in January have been flat in the West region for the past three years.

The report, which monitors sales activity for newly constructed houses, reported that in the West, new home sales were flat year over year with 5,000 sales in January 2012, which was the lowest January total recorded in more than ten years. There were 5,000 sales during January 2011. Nationwide, sales rose 4.7 percent, rising from 21,000 to 23,000 during the same period.

In the West, no January has shown fewer than 5,000 new home sales for the region for any year during the past decade.

For the West region:



The second graph shows that new home sales continue to fall and have generally followed a downward trend since the middle of the decade.

New home sales peaked during the spring and summer of 2005 and have trended downward since. The number of new houses sold in the United States is down 82 percent since the peak of March 2005, and new home sales in the West have fallen 86 percent since sales peaked in the region during March 2004.




The third graph shows the declines in both US and regional totals in new homes for sale.

The number of new homes for sale has also fallen off considerably. The number of new houses for sale in the West has fallen 76 percent since the total peaked during June 2007, and the same total has fallen 73 percent in the US since the number of new homes for sale peaked in the US during August 2006.



At 32,000, the number of new single-family homes for sale in the West is at the lowest level it's been in more than ten years. No month has shown fewer than 32,000 new homes for sale during the past decade. This reflects very low demand in the face of an ongoing and large number of new foreclosures and low-priced properties in many areas of the West, including Colorado. Although foreclosures have fallen in Colorado in recent years, foreclosure rates remain near historic highs. The national total of new homes for sale during January set a new ten-year low of 151,000.

As a final note, we can also look to the new home inventory. In this case, we calculate inventory by subtracting the number of new home sales in a given month from the number of new homes for sale at the end of the previous month. In the final graph, we see that the inventory has essentially been flat since March 2011, hovering near 30,000 homes. There was an inventory of 29,000 homes during January 2012. This is good news for owners of existing homes seeking to sell homes since it suggests that fewer new homes are sitting and waiting to be sold, thus diminishing some of the inventory-driven downward pressure on prices.

FHFA: Home prices in all metros except Ft. Collins fall during 4th quarter of 2011

The House Price Index (HPI) fell from the fourth quarter of 2010 to the same period this year in every Colorado metro area except the Ft. Collins-Loveland area. The areas showing declines in the HPI included Boulder, Denver-Aurora, Colorado Springs, Greeley, Grand Junction and Pueblo.

The first quarter HPI data, released yesterday by the Federal Housing Finance Agency for hundreds of metropolitan areas nationwide, shows continued declines in home prices across Colorado.

Nationally and statewide, the HPI has also declined, with Colorado showing smaller declines that the nation overall. (See the analysis here.)

Year over year, the 1-year changes in each metro area were:
Boulder -0.7%
Colo Springs -2.7%
Denver-Aurora -1.9%
Fort Coll-Loveland +1.4%
Grand Junction -9.1%
Greeley -1.6%
Pueblo -2.6%

The first graph shows the year-over-year change in each region for each quarter. For the sake of visual clarity, the graph only shows data back to 2008.



Since the fourth quarter of 2008, the year-over-year changes have been generally negative. The graph also shows us that:

-Grand Junction has consistently shown the largest decreases in recent years.

-The Ft Collins-Loveland area has tended to show the smallest decreases in recent years, and shows the largest year over year increase of any region in any quarter since 2008.

The second graph shows the actual HPI values for each quarter going back to 2000. In general, the HPI began to plateau during 2007 and was declining in most areas by 2008. A big exception in the Grand Junction area which continued to increase rapidly well into 2008.



Since the peak period of the first quarter of 2007, the HPI has fallen in all regions. The following shows the change in the HPI compared to the peak period, as of the fourth quarter of 2011.

Boulder -0.8
Colo Springs -9.7
Denver-Aurora -5.5
Fort Coll-Loveland -2.5
Grand Junction -24
Greeley -14.3
Pueblo -8.4

This report overall suggests that while there is a fair amount of price stability in many areas of Colorado, prices continue to fall. When compared with Case-Shiller and local Metrolist data, we can say that through the fourth quarter of 2011, weakness in demand for for-purchase housing persists, but that losses in value are diminishing in each new time period. The CoreLogic index showed some small year over year increases in single-family homes. See here for more.

The index values presented and analyzed in this article are not seasonally adjusted. The data in this article is taken from the FHFA "all-transactions" data. The index is based on home price data obtained through the GSEs such as Fannie Mae and Freddie Mac.

FHFA: home prices down 1 percent in Colorado at end of 2011

Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), fell 1.1 percent from the fourth quarter of 2010 to the fourth quarter of 2011. According to the fourth quarter 2011 HPI, released yesterday by FHFA, the home price index for Colorado, in year-over-year comparisons, has fallen for the sixth quarter in a row while the national index has fallen for the 19th quarter in a row.

The Colorado HPI has now down 15.1 percent from the peak in the state's HPI which was reached during the third quarter of 2006. The national index is down 24.7 percent from its peak, which it also reached during the third quarter of 2006.

The HPI for the United States fell 2.8 percent from the fourth quarter of 2010 to the fourth quarter of 2011, and the national HPI has not shown a year-over-year increase since the first quarter of 2007.

The first graph shows the Colorado HPI compared to the US HPI since 2001. Since the peak period, the US HPI has fallen farther than the Colorado index.



In this index, the US price index can be described as slightly more "bubble-like" than the Colorado index which did not experience a run up in prices to the same degree as was the case in the national index. Although Colorado's index is higher, the index value increased much more from 2001 to the peak nationally than in Colorado. From 2001 to the third quarter of 2006, the national HPI increased 51 percent, while it only increased 23 percent in Colorado. In turn, the correction has been more severe nationally.

In the second graph is shown the year-over-year change in the HPI for both Colorado and the US. This more fully shows to what degree the HPI has fallen in recent year for both Colorado and the US. With the exception of the first quarter of 2011, the national HPI has fallen farther than the Colorado HPI in every quarter since the third quarter of 2007.



Overall, this index suggests that, since 2007, overall home prices in Colorado have been more resilient than has been the case nationally. In Colorado, there was even a brief period of increasing prices, year over year, in late 2009 and early 2010.

The index values presented and analyzed in this article are not seasonally adjusted.

Note: During the second quarter of 2011, the Federal Housing and Finance Agency released, for the first time, its Expanded-Data House Price Index. The new index is "Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick[.]"

In other words, the data source is much more broad than the old index which relied only on GSE information.

However, at the metro-are level, we'll still need to rely on the older GSE-data index until FHFA expands its new index into the metro areas.

January mass layoffs and first-time unemployment claims fall to 11-year low

Mass layoff events fell 54 percent to 5 events during January 2012 in Colorado. There were 11 mass layoff events during the same period last year. According to a new report released yesterday by the U.S. Bureau of Labor Statistics, mass layoffs in Janaury were at the lowest January total reported in more than ten years.

Monthly mass layoff events grew rapidly after October 2008 in Colorado, and have gradually lessened since early 2010.



Nationally, mass layoff events decreased 33 percent from 2,558 during January 2011 to 1,705 during January of this year.

January mass layoffs have now fallen three years in a row after peaking at 24 mass layoffs during January 2009. The second graph shows January totals since 2001:



Mass layoffs were rare from 2004 through most of 2008.

Overall, the most recent mass layoffs data suggests that the employment situation continues to stabilize. New layoffs continue to lessen, and as we've seen in the most recent employment data, January job growth was at a five year high in Colorado.

New claims for unemployment insurance

New claims for unemployment insurance in Colorado fell year over year by 50 percent to 556 in January 2012. There were 1,126 new claims during Janaury 2011. New claims for unemployment insurance have also gradually fallen since early 2010. Nationally, new claims fell 42 percent from January 2011 to January 2012.

In January new unemployment claims, totals are down three years in a row and are at a ten-year low. January unemployment claims peaked at 1,814 during January 2009 and have fallen each January since.



See the employment data archive for more on December's job creation.

The Mass Layoff Statistics (MLS) program collects reports on mass layoff actions that result in workers being separated from their jobs. Monthly mass layoff numbers are from establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a 5-week period. Extended mass layoff numbers (issued quarterly) are from a subset of such establishments—where private sector nonfarm employers indicate that 50 or more workers were separated from their jobs for at least 31 days.

Home prices in mountain region fall slightly, drop 51 months in a row

House prices in December in the Mountain region, which includes Colorado, were nearly flat, falling 0.2 percent, year-over-year. Nationally, the house price index fell slightly, dropping 0.7 percent. The new house price index numbers, released today by the Federal Housing and Finance Agency, also showed that the national index is down 19.2 percent from the peak level reached in June 2007, while the Mountain region's index is down 30 percent over the same period.

The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.

Although it has shown more negative growth than other indices in recent years, the decline in FHFA monthly house prices generally reflects overall trends also found in other home price indices such as the CoreLogic index and the Case-Shiller index. According to FHFA, prices have largely stabilized over the past several months, but remain slightly down from 2009 and 2010 levels.



The second chart shows each month's house price index compared to the same month a year earlier:



December 2011 was the 51st month in a row during which the house price index fell year over year. We can note that until December, the Mountain region has tended to perform more poorly (from a seller's perspective) than the national index. This runs contrary to some local experience and some statistics. The Case-Shiller data for the Denver metro area, for example, shows that local prices did not decline as much as the national composite index following the financial crisis in 2008. Also, the FHFA "expanded-data" index shows Colorado performing better than the national index.

Since we're looking at regional data, however, we have to keep in mind that this data reflects house prices in Arizona and Nevada, and this no doubt will continue to put downward pressure on regional prices for now.

Nevertheless, the overall trend among most home price indices is one of slow downward movement in home prices. This trend includes Colorado statewide as well as the metro Denver area. This downward trend continues to diminish, however, with the rate of decline getting smaller in each month in most indices. In December's FHFA report, the rate of decline, 0.2 percent, is the lowest year over year decline reported since September 2007, suggesting an ongoing trend toward stability, if not outright growth.

Housing News Digest, February 23

Kaiser Permanente selects locations in Fort Collins, Loveland
Kaiser Permanente, which announced its entrance into the Northern Colorado market late last year, has selected two locations for its Fort Collins and Loveland offices, and has set the anticipated open date for both offices as Oct. 1.

In Fort Collins, the health care giant will lease a 21,000-square-foot space at 2950 Harmony Road. In Loveland, Kaiser has purchased the 30,000-square-foot space currently inhabited by Eheart Interior Solutions at 4901 Thompson Parkway. Eheart is expected to close at that location by the end of March before relocating to Fort Collins.

Fort Collins/Loveland vacancy rates down; rents up (Coloradoan)
The problem is simple: There's a shortage of new apartments, said Ken Kiken of Milestone Development of Denver, which has teamed with Fort Collins developer Les Kaplan to build the 240-unit Terra Vida apartments off Harmony Road. "Financing the pipeline of new apartments is not keeping up with the natural pace of graduates and the increase in migration into the state," said Kiken, whose first units should be available in June.

Colorado apartment vacancies drop in Q4, rent up(DBJ)
Here’s a breakdown of Q4 2011 vacancy rates for the five metro areas. Given are vacancy rates, average rent and the percentage of rent increase or decrease from 2010.

Latest survey shows apartment vacancy rates tightening further in Loveland-Fort Collins and statewide (Loveland Reporter-Herald)
Loveland-Fort Collins' rate averaged 3.4 percent for the period, significantly lower than the other cities' vacancy rates and a drop from 4.1 percent the previous year. Separated out from the two-city average, Loveland's rate was 5.3 percent.

Average rents in Loveland in the fourth quarter registered higher than in any other area, at $1,006.51 per month. The Loveland-Fort Collins average was $973.93, a 9.1 percent increase over 2010 and higher even than Denver's $932 average.

Greeley apartments show high rise to vacancy rate (Greeley Tribune)
A sharp spike in Greeley’s apartment vacancy rate, from 1.8 percent in the third quarter of 2011 to 6.4 percent in the fourth quarter, has left some r...

Rents creep up; vacancies tighten (Grand Junction Daily Sentinel)
Apartments were more expensive to rent and slightly less available in Grand Junction during the fourth quarter of 2011 compared to the final quarter of 2010. Grand Junction’s apartment…

Regional Analyses: Vacancies and Rents in Colorado

The Division of Housing today released 2011's fourth quarter report on vacancies and rents. The report includes data for 6 metropolitan areas of the state.

For analysis of the Denver metro area, see here. For Colorado Springs, see here.

Northern Colorado

The vacancy rates in both the Greeley and the Ft. Collins/Loveland areas have been below the metro Denver rate for 4 of the past 6 quarters, and have tended to be below the metro Denver rate since the third quarter of 2009. Between 2002 and 2009, the Greeley and Ft. Coll/Loveland areas tended to have vacancies above the metro Denver rate.

The tightening of the northern Colorado multifamily markets is due at least in part to the well-performing labor market in the Fort Collins-Loveland metro area. During December 2011, when the 4th quarter vacancy rate was conducted, The Ft. Collins-Loveland area had an unemployment rate of 6.3 percent, and with the exception of the Boulder area, it has the most robust labor market in Colorado. Total employment in the Ft. Collins-Loveland area is now only 3.2 percent below peak employment levels experienced during the last economic expansion.

Strong employment has driven a strong demand for multi-family housing in the region.

The Greeley area also has reported improvements in employment, but not to the extent seen in the Ft. Collins-Loveland area. Nevertheless, the market has generally tightened in the Greeley area as well due to the close proximity of Greeley to the Ft. Collins area. Renters looking for more affordable alternatives to rental housing in the Ft. Collins area then look to housing in the Greeley area. Greeley however, was particularly hard hit by foreclosures, and the existence of a large number of single-family rental houses in the wake of foreclosures can act to cause volatility in multi-family vacancies.



During the fourth quarter of 2011, Greeley was the only metro area in Colorado that showed a year-over-year increase in the vacancy rate. Although several factors likely contributed to this, it is likely that a surge in rent levels increased turnover in the region. This is a common effect seen when apartment owners, following several quarters of flat or declining rents, attempt to push rents following a decline in vacancy rates. The resulting rent increases then temporarily increase turnover, and increase the vacancy rate for a time. In Greeley, the rise in the vacancy rate during the fourth quarter followed a substantial drop in the vacancy rate during the third quarter of 2011 to 1.8 percent. It is likely that owners attempted to push rents following such a tight market as seen during the third quarter. The higher rent levels increased turnover which is reflected in the fourth quarter's vacancy rate of 6.4 percent.

In Greeley, year-over-year rent growth during the fourth quarter of 2011, at 7 percent, was the largest rate of growth experienced since the third quarter of 2004. Among other metro areas during the fourth quarter of 2011, only the Fort Collins area reported a larger rate of year-over-year growth with an increase of 9.1 percent in rent. However, Ft. Collins, with a stronger job market than Greeley, did not experience an increase in vacancies due to increasing rent levels.

The Grand Junction Area

Housing markets in the Grand Junction area have behaved very differently from other metro areas in recent years. From 2005 through 2008, vacancy rates were driven down to very low rates of 1.5 to 3 percent during many quarters as a result of a boom in rental housing demand. The demand was driven by new oil and gas jobs that were being created in the region during that time. However, following the financial crisis of 2008 and the departure of many oil and gas jobs, the vacancy rate surged to over 13 percent during the fourth quarter of 2009. It has since come down and has been mirroring over state trends since late 2010.

The second graph shows that the Grand Junction rate has been above the metro Denver vacancy rate since the third quarter of 2009. Local property managers report that conditions are stabilizing in the region, and that some small rent increases are being reported in the area.

During the fourth quarter of 2011, the vacancy report shows that year over year rent growth, at 3.8 percent, was at the highest rate reported since the first quarter of 2009.



Southern Colorado

The vacancy rates in both Pueblo and Colorado Springs have been above the metro Denver vacancy rate since the third quarter of 2010. Over the past decade, the Colorado Springs vacancy rate has tended to be well above the metro Denver vacancy rate during most quarters. In recent quarters, the Colorado Springs area has declines to ten-year lows. The Pueblo vacancy rate surged above 12 percent during late 2009 and early 2010, and has only slowly fallen to rates seen during the middle of the past decade.

The Pueblo vacancy rate was 7.3 percent during the fourth quarter of 2011, making it the metro area with the highest vacancy rate.

At the same time, the fourth quarter vacancy rate in Colorado Springs has fallen to the lowest fourth-quarter rate reported in 12 years.

The Pueblo area's multifamily markets continue to struggle in the face of a weak job market. With a December unemployment rate of 9.8 percent, Pueblo had the highest unemployment of any metro area in Colorado, suppressing demand for multifamily housing.

The Colorado Springs area's multifamily owners have benefited from increase troop movements into the area coupled with very little new production in new multifamily housing. El Paso County reported some of the highest multifamily permitting numbers during 2011, but few of those units have yet been completed.



Rent Growth

Year-over-year rent growth was positive in all metro areas except the Pueblo area. Growth in the Ft. Collins-Loveland area and the Greeley area were particularly strong while Grand Junction rent growth turned positive for the first time in six quarters. The fourth graph shows year-over-year rent growth for each region.



The last graph shows the relative rent levels in each metro area. Notably, the average rent in the Ft. Collins-Loveland area has moved above the metro Denver area's average rent during the past two quarters. This ends a well-established historical trend in which Metro Denver had the highest average rent among all metro areas. Pueblo has had the lowest average rent among the metro areas since 2006 when Grand Junction's average rent moved above Pueblo's rent level.

NAR: Existing home sales rise as median prices fall

The median home price in the West region of the U.S., which includes Colorado, fell 1.8 percent from January 2011 to January 2012. According to new existing home sales data, released today by the National Association of Realtors, the median home price fell nationally and in all regions. The median price fell the most in the Northeast where it declined 4.2 percent from January 2011 to January 2012.

The first graph shows median home prices for all regions plus the U.S. The median home price in the West fell to the lowest price recorded in more than two years, falling to 187,100. Nationally, the median home price was also at a two-year low.



Nationally, home prices fell 2.0 percent, year over year.


Note: The median home price numbers were not affected by the major revision in home sales data. As explained here, home sales numbers were recently revised downward by 14 percent by the National Association of Realtors. Past estimates of home sales had proven to overstate home sales in recent years. The revision attempts to re-benchmark the data to make it more accurate.

According to the revised data, home sales transactions (closings) rose 1.4 percent, from January 2011 to January 2012, in the West region while nationally, sales rose 4.0 percent during the same period. All regions reported increases in sales activity. The largest increase was reported in the Northeast where sales rose 7.1 percent. the West reported the smallest increase.

The second graph shows closings by region. All regions showed a month-over-month decrease from December to January, which is common due to seasonality. Sales fell nationally 26.4 percent from December to January, while sales in the West fell 19.4 percent.

Overall, January's sales activity was higher than was the case during January of last year.




In short, home sales have increased, although without spurring increases in median home prices. Colorado data also shows some recent increases in home sales activity while median home prices have remained largely flat. This indicates that there is a significant amount of bargain hunting among new buyers. More transactions are taking place, but the buyers are not bidding up prices enough to produce year-over-year increases in median prices. We know that Colorado is slowly clearing its foreclosure inventory, and new post-foreclosure sales may be providing new sales activity, although such sales are not likely to drive up prices.

Housing News Digest, February 22

Apartment vacancy rates decline in Colorado metro areas; rents rise (Den Post)

The vacancy rate in Colorado apartments was down during the fourth quarter of 2011, falling in five of the six metro areas measured from the fourth quarter of 2010 to the fourth quarter of 2011, the Colorado Division of Housing said today.

The combined vacancy rate for apartments in six metro areas across Colorado during 2011's fourth quarter was 5.6 percent.

Colorado's vacancy rates decline; rents climb
Vacancy rates in Fort Collins/Loveland have dropped to the lowest in the state, according to a report released today by the Colorado Division of Housing.

Vacancy rates fell in the fourth quarter of last year to 3.4 percent in Larimer County. Fort Collins vacancy rates dropped to 3 percent meaning there’s nary an apartment to be had.

Home sales jump to highest level in nearly two years

WASHINGTON — Sales of previously occupied homes rose in January to the highest pace in nearly two years, flashing modest signs of health ahead of the spring-buying season.

The National Association of Realtors said Wednesday that home sales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million. That’s the highest level since May 2010.

US housing market shows slight improvement
While sales of existing homes picked up steam it was at the expense of home prices. The median price fell 4.6 per cent in the month to $154,700, down 2 per cent from the same month last year

Shilling: Why Renters Rule U.S. Housing Market (Part 1)
Policy makers in Washington continue to have a soft spot for homeownership. Many recent government actions can be viewed as attempts to keep people in their homes, even owners who clearly can’t afford them. In addition to specific plans such as the Home Affordable Modification Program, or HAMP, and the Home Affordable Refinance Program, or HARP, the Obama administration is trying to revive the moribund housing sector by encouraging mortgage lenders and servicers to refinance loans at lower rates.

Colorado apartment vacancy rate falls to 5.6 percent, rents rise

The vacancy rate in Colorado apartments was down during the fourth quarter of 2011, falling in five of the six metro areas measured from the fourth quarter of 2010 to the fourth quarter of 2011. According to a report released Wednesday by the Colorado Division of Housing, the combined vacancy rate for apartments in six metro areas across Colorado during 2011’s the fourth quarter was 5.0 percent. The rate was down from 2010’s fourth quarter rate of 5.6 percent. The combined vacancy rate fell to the lowest fourth-quarter vacancy rate recorded since the survey began measuring the fourth quarter during 2007.

Among the state’s metro areas, only Greeley reported year-over-year increases. In Greeley, the vacancy rate rose from 5.1 percent during the fourth quarter of 2010 to 6.4 percent during the fourth quarter of 2011. The vacancy rate declined in all other areas. The largest drop was found in Pueblo where the vacancy rate fell from 10.2 percent during the fourth quarter of 2010 to 7.3 percent during the same period of 2011.

The metro Denver vacancy rate during 2011’s fourth quarter, released last month in a separate survey, fell year over year from 5.5 percent to 5.4 percent.

“We’ve seen year-over-year drops in vacancies in all metros except Greeley for at least the past four quarters,” said Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, and the report’s author. “Markets have begun to respond with new construction, but little of that has come online so far.”

Vacancy rates in all metropolitan areas were: Colorado Springs, 6.7 percent; Ft. Collins/Loveland, 3.4 percent; Grand Junction, 7.0 percent; Greeley, 6.4 percent; Pueblo, 7.3 percent.

Average rents across the state have increased as vacancies have fallen.

The statewide average rent in Colorado increased 3.2 percent from 2010’s fourth quarter to 2011’s fourth quarter, rising from $871 to $900. Across metro areas in the state, however, growth in average rents varied considerably. The average rent in the Greeley area, for example, increased 7.0 percent, year over year, while the average rent in Pueblo fell 3.2 percent. During the same period, the average rent in Colorado Springs increased 5.0 percent while the average rent in Grand Junction rose 3.8 percent.

The largest increase in the average rent was found in the Fort Collins/Loveland area where it rose 9.1 percent from the fourth quarter of 2010 to 2011’s fourth quarter.

“The overall trend in rents continues upward and rent increases in Fort Collins, Greeley and Colorado Springs were quite substantial during the fourth quarter,” said Ryan McMaken, a spokesman with the Colorado Division of Housing. “This is likely to continue in the near term as more households look to rental housing and as in-migration from other states remains strong.”

Average rents in all metropolitan areas measured were Colorado Springs; $775, Ft. Collins/Loveland, $973; Grand Junction, $640; Greeley, $677; Pueblo, $535.

The metro Denver average rent, measured in a separate survey, was $932 during the fourth quarter.

2011 Year-end Housing Snapshot for Colorado Springs

Looking for a quick summary of the Colorado Springs housing markets? Here you go.

The latest regional Housing Snapshot is for the Colorado Springs area and covers 2011's Year-end.

Housing Snapshot archive.

Housing News Digest, February 21

Distressed retail property opportunites coming in 2012
More than $350 billion in commercial real estate loans could move this year and next, creating an opportunity for the distressed retail property asset pipeline to begin to move, Colliers International said in its U.S. Retail Highlights: 2012 Outlook report.

The Seattle-based CRE firm said there will be opportunities for retail investment of trophy assets trading at low cap rates in addition to a large pool of marginal or low- to no-cash flow assets that cannot be refinanced. The report says these assets will either default or end up in fire sale, creating opportunities for investors.

Proposed Bill to Speed Up Short Sale Process and Prevent Foreclosure
To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process.

Senators Lisa Murkowski (R-Arkansas), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.

Grubb & Ellis sells assets, files for bankruptcy
Grubb & Ellis Co., a U.S. real estate services company, agreed to sell almost all its assets to BGC Partners Inc. and filed for bankruptcy protection.

Grubb & Ellis listed assets of as much as $500 million and liabilities of up to the same amount in the Chapter 11 filing in U.S. Bankruptcy Court in New York Monday. The company said it completed about 12,000 sale and lease transactions last year and manages more than 250 million square feet of property.

Some Doubt a Settlement Will End Mortgage Ills
Even as government officials prepare to unveil new standards this week for how banks treat millions of Americans facing foreclosure, housing advocates and homeowners are skeptical the rules will be able to do something past efforts have not: provide a beleaguered borrower with one individual to help them navigate the mortgage maze.

While the entire process of seeking a mortgage modification is complicated and time-consuming, few elements are as maddening as the inability to get through to a representative at the bank, or being asked for the same documents again and again.

Housing News Digest, February 20

Wave of Deferred Bank Repossessions Expected in 2012\
NEW YORK, Feb. 20, 2012 -- /PRNewswire/ -- According to Bankownedproperties.org, some 600,000 properties in the U.S. are reported to begin the foreclosure process as the foreclosure industry begins to function more normally.

Many of the properties that began the foreclosure process in the third and fourth quarters of 2011 will become bank-owned properties in 2012, and many will also end up as short sales. Lenders continue processing more of the 2011 delayed delinquencies, plus new foreclosures caused by high and extended unemployment. Homeowners with severely underwater mortgages push smaller but continuous surges of foreclosures also depressing home prices.

Local banks starting to make comeback
Banks in the Colorado Springs area took another big step toward recovery during 2011 as they reduced delinquent loans and boosted profits from operations, according to recently released 2011 data from the Federal Deposit Insurance Corp.

Some Longmont-area homes cost more than Twin Peaks Mall
Sounds like a lot of money -- until you consider that NewMark Merrill Mountain States came up with $8.5 million and got itself a whole shopping mall.

When it was announced last week that the company bought the troubled Twin Peaks Mall, some observers viewed the purchase price as shockingly low.

"It's incomprehensible," said Scott Franklund of Legendary Properties, a Boulder company that deals in luxury Colorado real estate. "It was the buy of the century."

Crescent Real Estate Holdings: LEED Status Sells Office Buildings
Dallas-based Crescent Real Estate Holdings LLC has announced that its three Class A office properties in Denver received Leadership in Energy and Environmental Design (LEED) certifications from the U.S. Green Building Council (USGBC) under the Existing Buildings (EB) rating system.

Johns Manville Plaza (pictured left), a 29-story, 675,400 square-foot Class A office property, received LEED EB Gold status, while the 42-story 707 17th Street property and the 10-story Peakview Tower received LEED EB Silver status. John Zogg, managing director of leasing for Crescent's Denver portfolio, says that LEED certification is a major selling point for commercial office property.

U.S. Housing Affordability Index Reaches New Record High
Nationwide housing affordability, as measured by the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), rose to a record level during the fourth quarter of 2011, while prospective home buyers continued to feel the constraints of tighter credit standards and a soft economy.

Median home prices up in metro Denver, down statewide and in Colorado Springs

Median home prices for single-family homes fell in Colorado and in the Pikes Peak region, but rose in the state's two largest market areas. According to median home price data for December, released by the Colorado Association of Realtors, the median home price for single-family homes in the Denver area was $233,004 during December, which is an increase of 4.2 percent from December of 2010. Statewide, the median home price was $207,769 during December, a drop of 1.3 percent from the same month last year. The median price in the Pikes Peak region fell 5.2 percent, year over year, falling to $187,455 during December.

The first graph shows the median single-family home price for the state and for the metro Denver and Pikes Peak regions. Median home prices fell dramatically in all three measures following the financial crisis of late 2008, but moved back up quickly by mid-2009. Since mid-2009, however, median home prices have been largely flat in metro Denver, but have shown a slight drift upward. In the pikes peak region, on the other hand, the median price remains well below peak levels, ranging from 15 percent to 20 percent in recent months. Statewide, as is typical, the median price has been more volatile, but has not recovered as much as the metro Denver median. Statewide, sales prices are likely being pushed down by declining markets in western Colorado and in the central mountains.



The metro Denver area, where the median price is 11.7 percent below its June 2007 peak levels, has recovered the most. Metro Denver prices appear to have stabilized since 2009 and the median price generally moves between 220K and 240K. The statewide median price is now 15.4 percent below its June 2006 peak, and fell below 200K during most months of the past year. The Pikes peak median price is 18.6 percent below its July 07 peak and has been generally flat since late 2009, moving between 180K and 200K.

During recent months, with the exception of metro Denver in November and December, the median prices appear to have entered negative territory when compared to the same months of the previous year. As can be seen in the second graph, the year-over-year changes in all three areas have been generally negative each month for the past six months, although the Denver area has now reported increases for two months in a row.



This downward trend is mirrored in other home prices indices for Colorado such as the Case-Shiller, CoreLogic and FHFA indices. Compare to the Zillow median home values for each area. See here for past analyses using other indices.

The home price data provided by the Colorado Association of Realtors is based on home sales transactions that are listed in the MLS systems for each area and do not include for-sale-by-owner transactions or new homes sold directly by home builders.

Single-family home sales activity inches up

The number of single-family home sales closings increased again in December in metro Denver, the Pikes Peak Region, and statewide. According to home sales information released by the Colorado Association of Realtors, the number of single-family closings rose 1.9 percent in metro Denver during December 2011 compared to December 2010. Over the same period, closings rose 2.3 percent statewide, and 3.5 percent in the Pikes Peak region. Statewide in December, there were 4,549 closings. 2,544 of them were in the metro Denver region and 651 occurred in the Pikes Peak region.

The number of closings in all three measures has increased, year over year, each month for the past six months.

This recent growth trend has also begun to show up in the 12-month moving averages used to track trends in home sales. The highly-cyclical nature of home sales trends makes it difficult to track multi-year trends in home sales. The addition of the homebuyer tax credits from 2008 to 2010 further complicated the picture. So, I have smoothed out the sales totals using a 12-month moving average for each month.

In the first graph, we see the moving average in home sales compared to year-over-year changes in the average for the metro Denver area. The trend in home sales closing has been downward since mid-2005 and accelerated in early 2009. From March 2008 until September 2011, every month showed a negative year-over-year change in home sales. In December, the year-over-year change was positive for the third time in 47 months, with an increase of 1.5 percent. As indicated by the moving averages themselves, overall home sales numbers have been generally flat since early 2009, although they dipped during mid-2011.



The second graph shows the same measurements for Colorado statewide. The year-over-year change in the statewide average for home sales turned positive in December for the third time in 15 months. Statewide, transactions moved into positive territory in response to the homebuyer tax credits that were were offered in 2009 and 2010, but moved into negative territory again after the expiration of the credits. The statewide moving average increased 3.4 percent in December, year over year.



The third graph shows the same measures for the Pikes Peak region. The homebuyer tax credit produced much larger changes in the regional trends in the Pikes Peak region than in metro Denver or statewide. The year over year change in December was positive, making it the second time in fourteen months that the year-over-year change in average sales has been positive. Excluding the run-up in home sales produced by the tax credit in 2009 and 2010, the average in home sales has been largely flat since mid-2009 in the Pikes Peak region, but has turned slightly upward since the fall of 2011.



The analysis of moving averages in home sales activity indicates that the markets continue to stabilize in metro Denver, the Pikes Peak region, and statewide. Recent upward trends suggest that sales activity will continue to build at least in the near term. Sales totals, however, are likely to continue to be well below peak levels for at least the next year.

Median condo prices fall in Colorado, Metro Denver, Colorado Springs

The median price for condos and townhomes in the metro Denver area decreased 9.8 percent, year over year, in December 2011. According to home price information for condos and townhomes, released by the Colorado Association of Realtors, the median price in the region fell to $121,509 from December 2010's median price of $134,808. Statewide, the median price fell 30 percent, falling from December 2010's price of $132,404 to December 2011's price of $92,500. In the Pikes Peak region, the median price fell 0.3 percent to $120,769 during December, rising from December 2010's price of $121,250.

Condo and townhome prices remain well below peak median prices in each region. The statewide median price for condos and townhomes in December was down 60 percent from the March 2006 peak of $236,200. In metro Denver, the median price in November was down 25 percent from the July 06 peak of $163,300, and the Pikes Peak-area median price for condos and townhomes in November was down 25 percent from the September 2007 peak of $162,300.

The first graph shows the median home price in each area for each month since 2006.



Condo and townhome prices do not appear to have stabilized as single-family homes have, and median prices appear to be continuing a slow downward trend. The substantial declines in statewide median prices for condos and townhomes are likely being pushed downward by significant drops in median prices for condos and townhomes in many mountain regions following the 2008 financial crisis.

The second graph shows year over year changes in median home prices for condos and townhomes. October and November 2010 showed some small increases in all three areas, although all three areas declined again during December. Until October 2011, all three areas had reported declines in the median home price every month since February 2011. The overall trend in home prices among condos and townhomes over the past year has been down.

Condo sales up very slightly in December in Denver, statewide

Condo and townhome sales in metro Denver and statewide increased, year over year, for the sixth month in a row in December 2011. According to condo and townhome sales data released by the Colorado Association of Realtors, sales increased statewide 0.9 percent in December 2011 from the same month a year earlier. They increased 0.16 percent in metro Denver over the same period. In the Pikes Peak region, December sales increased 12 percent. In December, there were 956 sales statewide. 626 of them were in metro Denver and 93 were in the Pikes Peak region.

This recent growth trend in statewide and metro Denver sales is now seen in the 12-month moving averages used to track trends in home sales. The highly-cyclical nature of home sales trends makes it difficult to track multi-year trends in home sales. The addition of the homebuyer tax credits from 2008 to 2010 further complicated the picture. So, I have smoothed out the sales totals using a 12-month moving average for each month.

The first graph shows the 12-month moving averages in total condo and townhome sales in metro Denver and statewide. The overall trends since 2007 is clearly downward, although average statewide sales have largely stabilized since late 2009. Until recently, the moving average for condo and townhome sales had continued to move downward through late 2010 and most of 2011, although there have been some gains in recent months. The moving average in statewide sales increased 2.4 percent while the metro Denver average fell 1.7 percent. Nevertheless, the metro Denver decrease was the smallest year-over-year drop since October 2010.



The second graph shows year-over-year changes in the 12-month condo and townhome sales average. We see increases during 2010 following the end of the homebuyer tax credit period. The year-over-year changes moved back into negative territory by early 2011, and the year-over-year change in the moving average in metro Denver has remained negative for the past fifteen months. Statewide, the year-over-yeear change turned positive during November 2011 and December 2011. The magnitude of the the decline for each month has lessened in metro Denver over the past seven months.



In the Pikes peak region, similar trends hold, although the homebuyer tax credits seem to have had a broader impact with the year over year change in sales remaining in positive territory for 15 months in a row. As can be seen in the third graph, sales activity has since declined. With a drop of 16 percent, December's year over year change was the second-largest decline reported since June 2009. This suggests that sales activity for condos and townhomes in the region continues to face headwinds.

CPI growth in January moderates in the U.S. West region

The Bureau of Labor Statistics released today the January CPI for US urban areas and regions. In the West region, from January 2011 to January 2012, the CPI increased 2.6 percent. This is an increase over the year-over-year increases for January during 2009, 2010 or 2011, during which the change in CPI never exceeded 2 percent.

In the first graph, we can see that the CPI growth in January 2012 was the largest annual change for January since 2008, prior to the financial crisis of October 2008. 2005 through 2007 also showed higher annual changes.



The index increases are being driven by increases in prices in apparel, food and transportation. Transportation prices increased by 3.9 percent, year over year. Food costs and apparel also increased, rising 3.6 percent and 4.5 percent, respectively.

Housing prices were restrained with a year-over-year increase of 1.8 percent. Although annual increases in rent (according to State of Colorado data) have exceeded 5 percent in many areas of the state, the housing component of CPI also reflects declining and stagnant home prices, which indirectly mitigate the increases in rent levels within the index.

Recent price increases will impact household calculations and attitudes on spending as many households conclude that discretionary spending will need to be scaled back in the face of increasing food and transportation costs. According to the most recent personal income data, personal income growth has not been keeping up with CPI growth.

The second graph shows year-over-year changes in CPI for all months since 2002. If current trends continue, CPI growth stalled around 3 percent for much of 2011, but has been declining during the past four months.



Nationally, the CPI increased slightly more than in the West region:

The Consumer Price Index for All Urban Consumers (CPI-U) increased
0.2 percent in January on a seasonally adjusted basis, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months,
the all items index increased 2.9 percent before seasonal adjustment.

The indexes for food, energy, and all items less food and energy all
rose in January, each increasing 0.2 percent. Within the food group,
the index for food away from home increased while the index for food
at home was unchanged; within the energy group the gasoline index
increased while the index for household energy declined.

Over the past ten years (comparing January 2003 to January 2012), the CPI has risen 22 percent. In other words, a dollar today buys less than 4/5ths of what it did in 2003.

Housing News Digest, February 17

Co. Foreclosures Slide to Five-year Low (KUNC)
“I’m now hearing that a lot of these servicers had been holding back a little bit in terms of foreclosure processing as they waited for the outcome of the Attorney General’s agreement, the settlement that came down last week. And so now some people are expecting those numbers to come up a little bit.”

Colo. foreclosure filings, sales drop in January (Summit Daily News and Aspen Times)
All counties except for Broomfield County had fewer foreclosure sales last month compared with January 2011. Mesa County had the highest rate of foreclosure sales, with one sale for every 752 households. Boulder County had the lowest with one sale for every 3,621 households.

Foreclosure filings declined for 14 straight months, according to the report. Nationally, however, the number of homes repossessed by banks rose 8 percent between December and January, although the figure was still down compared to January 2011.

Amended RTA bill passes Colorado Senate committee
The applicants for the incentives include Aurora, for a proposed 1,500-room Gaylord hotel and conference center; Douglas County, for a prehistoric-archaeology museum and sports complex; Glendale, for an outdoor riverwalk entertainment complex; Pueblo, for a downtown riverwalk area that would include a bull-riding training center and an expanded convention center; Estes Park, to redevelop and renovate Elkhorn Lodge and build a 50-acre, year-round adventure park; and Montrose County, which is proposing 141 tourism and commercial projects.

Spain Ghost Towns Develop From Real Estate Crash
SESENA, Spain (AP) — Towering apartment blocks, complete with swimming pools and playgrounds, loom over empty streets, weed-filled lots and gaping excavation pits. The lone bank in this mega-development nicknamed "Manhattan" closed two years ago and most storefronts are bricked up.

Apartments galore are for sale here and prices are plunging.

Housing faces problems, despite gains
First, economists expected a bigger advance. After all, the mild weather should have allowed builders to break ground on many more projects than in a typical January. Economists at IHS Global Insight warn the building activity pulled forward into the tepid winter months could mean a payback in starts come the spring. Read more about housing starts.

Housing News Digest, February 16

Colorado metro foreclosure filings have fallen 14 months in a row (Den Post)
Foreclosure activity in Colorado's metro counties dropped to a five-year low in January, according to a report released today by the Colorado Division of Housing.

New foreclosure filings fell year-over-year during January with total filings dropping 28.2 percent from 2,699 filings in January 2011 to 1,939 filings during January of this year.

Colorado foreclosure decline continues (DBJ)
All 12 metro counties surveyed reported year-over-year decreases in foreclosure filings in January, with Douglas County and Broomfield County reporting the largest year-over-year declines at 44.5 percent and 40 percent, respectively. Larimer County reported the smallest year-over-year decline at 16.7 percent

Citi fined $158 million for gaming federal housing program
NEW YORK (CNNMoney) -- Citigroup will pay $158 million to settle charges that its mortgage unit defrauded the Federal Housing Administration by inaccurately claiming that certain mortgages were eligible for government insurance, government officials announced Wednesday.

Under the FHA's Direct Endorsement Lender program, lenders like Citi's CitiMortgage division can submit certain loans for government insurance in case a borrower defaults. Lenders are required to maintain their own quality-control programs to ensure that loans submitted for such insurance have been prepared properly and without any evidence of fraud.

Larimer among highest-ranking counties for multi-family permits
New data released by the Colorado Division of Housing shows that 470 multi-family permits were issued in Larimer County last year, outranked only by El Paso, Jefferson and Denver counties.

The top four counties accounted for 84 percent of multi-family permits statewide.

The permits are likely for rental housing, according to the Department of Housing, to help alleviate the tight rental market in most of Colorado. In Fort Collins-Loveland, the vacancy rate was 2.3 percent as of the third quarter 2011, the most recent data available.

Foreclosures dive 28%
During January, the counties with the largest decreases in foreclosure filings, year-over-year, were Douglas and Broomfield counties, where filings decreased by 44.5 percent and 40 percent, respectively. Larimer County reported the smallest decline in filings with a decrease of 16.7 percent from January 2011 to January 2012. All counties surveyed reported year-over-year decreases in foreclosure filings.