Denver area Foreclosures skyrocketing

[EasyAl]

Yobob, Pee Brain, Scottcardiff and others had some very insightful discussions on residential real estate at M2M. Here is an article that describes the situation in Denver area.

 

To no one's surprise, real estate foreclosures in the metro area continue to soar.

 

In the first six months of the year, there were 4,340 foreclosures in the seven-county area compared with 3,134 in the first half of last year, a 38.5 percent increase.

 

And counties with relatively few foreclosures showed the largest percentage increases.

 

Broomfield County foreclosures jumped by 80 percent, but only 54 were filed.

 

And Boulder County's foreclosures rose by 61.6 percent, but it had only 223, less than one-fifth of those in Arapahoe and Denver counties.

 

Jim Wills, chief deputy public trustee at Boulder, noted there was a 73 percent increase in foreclosures in the second quarter.

 

The latest trend is that more people are unable to hold on to expensive homes, he said.

 

"Last year, we saw almost no homes above $250,000 go into foreclosure," Wills said. "Now, 20 percent or 30 percent of our properties are above $300,000. We had one $970,000 home, but that was a bit of an anomaly. But we're starting to see a number of $400,000 and $600,000 homes go into foreclosure."

 

He said a few years ago, it wasn't unusual to find couples in their late 20s and 30s pulling down combined incomes of $200,000 or more.

 

"A lot of us live up to our means," he said. "Now, one or both of them may have lost their job, and they can't sustain their lifestyle."

 

The loss of jobs is slowing the home sales market, he said, making it more difficult for people who are underwater to sell their houses.

 

Byron Koste, head of the University of Colorado Real Estate Center at Leeds School of Business in Boulder, said that many people believe Boulder is immune to economic laws.

 

"There's this wonderful myth that you can't lose in Boulder," Koste said. "I hear it every day. Literally, they come up with a 'special paradigm' to describe the Boulder economy. Well, there ain't no special paradigm in Boulder."

 

He said not only did people overpay for the base price of their home, but many owners refinanced to "add all of the bells and whistles" to their houses, which now are worth less than the loan amounts.

 

Mike Rinner, of the Genesis Group, which tracks Front Range housing, said the average price of a home sold in the first quarter in Boulder County was $342,635, the highest in the seven-county metro area. The monthly data from MetroList doesn't include most of Boulder County.

 

Rinner said he suspects most people losing expensive homes in Boulder County did not just lose their jobs.

 

"They probably lost their job one or two years ago and just now are having to admit defeat, and their houses are going into foreclosure," he said.

 

The foreclosure crisis isn't limited to Boulder.

 

"Probably in 25 percent to 30 percent of my listings, people are upside down," said Sunny Banka, owner of Sunny Homes & Associates, a Metro Brokers office in Aurora.

 

Banka, who primarily works the southeast Aurora market, said she's seeing houses facing foreclosure that range from $80,000, one- bedroom condos to houses priced as much as $400,000.

 

"Most of them are dealing with a loss of jobs and not being able to get a job paying the same salary," she said. "Another problem is these 125 percent loans. People refinanced and were listening to lenders who were able to get appraisals for unrealistic amounts."

 

more info here

[Hypertiger]

They will all be upside down... Also 2 years ago when I started my countdown I factored in the... "Old college try"

 

"They probably lost their job one or two years ago and just now are having to admit defeat, and their houses are going into foreclosure," he said"

 

6-10 months left in my countdown starting Aug 1

[threadbare]

Sigmoid, You know when I was trying to sell my house, the agent suggested putting fresh cut flowers on the coffee table and bowls of fresh fruit in the kitchen. Now maybe it's just a regional peculiarity, but sellers in the Colorado area should probably not even be around for an open house, let alone standing on their heads when potential buyers tour their homes. Someone should pass this on to realtor, Sunny Banka. If she's bothered by people "being upside down", she should act proactively to stop it.

:grin:

 

Couldn't resist.

[EasyAl]

It's beyond my understanding that the average price of a home sold in the first quarter in Boulder County could still reach to $342,635 when there are so many $300K homes in forclosure.

[Pee Brain]

if credit quality becomes the paramount issue, which it probably should be anyway on recourse loans, the mortgage rates may disconnect to some extent from the 10-yr UST. economy gets worse, bond yields drop, but mortgage rates creep higher. ouch! as posted over on M2M a couple weeks back, socal market feels like 1989, which i believe was the top. i think this is the top, but its no easier to make that call in regional real estate than it is on nazcrack. just a gut feel even though home affordability is still pretty high.

 

we may be in the beginning round of the real estate downturn - 'bout friggin time. i think socal will be the last in and the last out, same as last time, so there could be some extended pain ahead given the extent of the rise here over the past few years. im watching unemployment, im watching for news of businesses relocating outta state and im watching for state taxes aimed at businesses, which are an easy target, but will erode the economic base. our economy has has buoyed by the real estate market and when it goes its gonna be ugly.

 

ill get my dream house at my price - some else is just currently occupying it on a temporary basis. people who sucked money outta their homes to throw at depreciating assets and took on tons of consumer debt are fools. i feel for them, but im not losing any sleep - there stupidity has caused me to have to wait. all those luxury auto leases, new cars with "0" down, boats, quads, high-end furniture, etc, could really snowball with price deflation and further squeezing of margins. this will lead to higher unemployment.

 

lets be honest, its hard to pay stuff off and the path of least reisistance is debt, and as unemployment rises and asset prices drop, its gonna get clearer that the great "prinitng expirement" has failed. a result of the eventual flushing will be that people reacquaint themselves, with savings, thrift and prudence.

 

as i was babling here, just got another of the never-ending phone solicitations for a mortgage. those "f-ing" bastards are gonna be outta work too.

[Pee Brain]

office vacancy rates.

 

http://www.rockymountainnews.com/drmn/real...2109489,00.html

 

note that probably does not include sublease availability