Breckenridge Real Estate Blog

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 Thursday from the Metro Denver Economic Development Corp.

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.

A report Thursday from the U.S. Department of Commerce showed that the median new-home price fell 9.7 percent to $217,100 in September compared with the same month a year ago. That’s the biggest drop in 35 years. Lower new-home prices helped builders boost sales 5.3 percent, seasonally adjusted.
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.

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, Home development, has outpaced population growth. Weld County alone has laid the groundwork for 250,000 new home sites, Barnes said, though Colorado’s population grew by only 350,000 people between 2000 and 2005.
Development Research Partners, conducted the analysis for the Metro Denver Economic Development Corp. continued job and income growth, lower energy prices and steady interest rates should shore up homeowner finances, keeping the foreclosure rate from moving even higher next year a a result expect 2007 to be a year of high foreclosures, perhaps not as high as 2006. Builders, are adjusting to changing market conditions and avoiding speculative projects. Permits for single-family detached homes are down 22 percent in the metro area through August of this year.