Colorado currently ranks 43rd among the 50 states in mortgage delinquencies, according to new data from Lender Processing Services, Inc. As of the end of April, 5.8% of all mortgage loans in Colorado were delinquent (60 days or more behind), compared to the national average of 8.99%.
This continues to be a striking reveral from 2005 and 2006, when Colorado led the nation in foreclosure filings per capita, and it's one of the reasons report after report identifies Colorado as one of the nation's top spots to buy a home.
Of course, there are complexities to every market, and Colorado is no different. While the overall number of foreclosures is down, the mix of properties being foreclosed upon is certainly different than it was a few years ago.
While the first (and larger) wave of foreclosures hit the lower end of the market, where "easy lending" was most prevalent, today there are more and more higher end homes falling into foreclosure. This trend seems to be driven more by job loss and economic conditions than by bad lending practices (although that is still a contributing factor), and I expect to see more distress at the higher reaches of the market until such time as jobs come back and the unemployment rate starts to fall.
Having said that, the overall outlook for the state remains positive, and the Denver area in particular continues to benefit from excellent press coverage about our housing market. The state's population grew at the fourth fastest rate of any state last year, adding nearly 100,000 new residents, and with a growing, well-educated population, the fundamentals for housing (especially at the median price or below) should continue to strengthen as the nation pulls out of recession.
