My phone rang at 8:10 this morning. It was a past investor client, who had some exciting news to share.
"Did you see this morning that AOL says Denver is one of the top ten seller's markets in the country?" he said. "Can you believe it?"
I said I wasn't sure if I could believe it... at least, not yet. The article my client cited actually appeared in Forbes about two weeks ago, and I wrote about it in this space.
For many months, I have started almost every buyer or seller presentation with a discussion about how the Denver Metro housing market is actually two markets: the traditional resale market and the foreclosure market. Different rules for each, different expectations for each.
Last week, I attended a CRS seminar on the "true" state of the Denver market, which was compelling on many levels, because it validated many of the premises in the Forbes article.
Did you know that 80% of foreclosures in Colorado affect homes priced at $240,000 or below?
Foreclosures dominate the headlines (more on that in a moment), but the reality is the vast majority of foreclosures are found at the bottom of the market.
It’s important to realize that the foreclosure “problem” in Colorado is not a “market-wide” problem. Our metro area is full of sub-markets, many of which are performing quite well.
While overall metro area prices have declined slightly over the past two years, when you eliminate foreclosures and short sales from the calculation, the numbers change rather dramatically:
2006 Denver Metro “non-foreclosure and short sale” home prices appreciated at 6%.
2007 Denver Metro “non-foreclosure and short sale” home prices appreciated by more than 5%.
The overall downward pressure in prices has been a result of foreclosures, which weigh heavily on the bottom of the market.
As you move up in price point, not only does the market stabilize, but prices in most areas have actually increased.
Realty Trac reported this week the number of new foreclosures nationally increased 57% in March of 2008 versus March in 2007. In Colorado, the number of new foreclosures during the same period FELL by 1.39%, making us one of only nine states in the country to see a decrease in foreclosures.
In 2005, we led the nation in foreclosures.
In 2006, we led the nation in foreclosures
In 2007, we fell to number 12.
So far in 2008, we’re one of only nine states to see a decrease in the number of foreclosures.
To be realistic, there is still a “foreclosure problem” in Colorado. We’ve been hit hard.
But don’t these numbers tell a different story?
Did you know that 80% of foreclosures in Colorado affect homes priced at $240,000 or below?
Foreclosures dominate the headlines (more on that in a moment), but the reality is the vast majority of foreclosures are found at the bottom of the market.
It’s important to realize that the foreclosure “problem” in Colorado is not a “market-wide” problem. Our metro area is full of sub-markets, many of which are performing quite well.
While overall metro area prices have declined slightly over the past two years, when you eliminate foreclosures and short sales from the calculation, the numbers change rather dramatically:
2006 Denver Metro “non-foreclosure and short sale” home prices appreciated at 6%.
2007 Denver Metro “non-foreclosure and short sale” home prices appreciated by more than 5%.
The overall downward pressure in prices has been a result of foreclosures, which weigh heavily on the bottom of the market.
As you move up in price point, not only does the market stabilize, but prices in most areas have actually increased.
Realty Trac reported this week the number of new foreclosures nationally increased 57% in March of 2008 versus March in 2007. In Colorado, the number of new foreclosures during the same period FELL by 1.39%, making us one of only nine states in the country to see a decrease in foreclosures.
In 2005, we led the nation in foreclosures.
In 2006, we led the nation in foreclosures
In 2007, we fell to number 12.
So far in 2008, we’re one of only nine states to see a decrease in the number of foreclosures.
To be realistic, there is still a “foreclosure problem” in Colorado. We’ve been hit hard.
But don’t these numbers tell a different story?
