Denver Real Estate Blog

Colorado’s use of the federal government’s stimulus-related Home Affordable Modification Program (HAMP) is relatively low as of February, according to a report released Friday by the U.S. Treasury and Housing and Urban Development departments.

As of the end of last month, Colorado had a total of 14,320 mortgage-loan modifications related to HAMP — 2,613 permanent modifications and 11,707 active trial modifications, according to the report. A trial modification precedes a permanent one.

By comparison, California had the most total loan modifications for that period at 205,606, followed by Florida with 123,144, Illinois with 53,285 and Arizona with 49,763.

States with the least HAMP activity included states with relatively low populations, including North Dakota with 245, South Dakota with 474 and Wyoming with 545.

The HAMP data also included mortgage-delinquency information provided by the Mortgage Association and Colorado fared well in that arena, as well.

Colorado’s mortgage delinquency rate, according to the report, was in the second-lowest category, at 5.01 to 10 percent of total mortgage loans. The data relate to loans that are delinquent by 60 days or more.

Two states had the highest delinquency rates — California and Florida — at 20.01 percent and higher.

HAMP was created as part of the stimulus (or “American Recovery and Reinvestment Act of 2009”), the federal government’s $787 billion package designed to jump-start the recovery of the U.S. economy. The HAMP program went into effect in August 2009, and can be used by holders of mortgages insured by the  Federal Housing Authority.

Via HAMP, such mortgage holders can modify their loans to make payments more affordable, and mortgage holders have the potential to get the full amount of the existing balance on a loan, according to the government.

As of last month, more than 170,000 homeowners nationwide have gotten permanent mortgage modifications, and another 91,800 such modifications have been OK’d and are pending, according to the report.

Homeowners with permanent modifications are saving a median of more than $500 per month on mortgage payments, for a total of $2.7 billion. Median is the midpoint between highest and lowest figures in a range.

Some 1.1 million homeowners have started trial modifications, and more than 1.3 million homeowners have gotten offers for trial modifications.

HAMP’s goal, the report said, is to offer 3 million to 4 million homeowners lower mortgage payments using loan modifications through 2012.

Denver Colorado Home vacancy rate  was 4.9 percent during the fourth quarter of 2008. The last time the metrowide vacancy rate reached 5.5 percent was during the fourth quarter of 2006, according to the survey by the Colorado Department of Local Affairs’ Division of Housing.

Vacancies in Denver for-rent condos, Denver single- family homes and other small properties across metro Denver rose to a three-year high of 5.5 percent during the fourth quarter last year, according to a report released Thursday. While the overall small-property vacancy is up, the type of property makes a difference. Vacancies for single-family rental homes were 4.5 percent, compared with 6.1 percent for townhomes and 7.1 percent for condos.

Home prices rose for the seventh straight month in December, a sign of price
stability as the U.S. housing market continues its bumpy road to recovery.

The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday
rose 0.3 percent from November to December, to a seasonally adjusted reading
of 145.87. The index was off 3.1 percent from December last year, nearly
matching analysts’ estimates that it would fall by 3.2 percent.

Only five of 20 cities in the index showed declines from November to
December. The index is now up more than 3 percent from its bottom in May,
but still 30 percent below its May 2006 peak.

Los Angeles and Phoenix posted the largest price increases. The worst
performer was Chicago with a 0.6 percent decline.

Rising prices are a key to the nation’s economic recovery because they make
homeowners feel wealthier and more comfortable to spend money. Consumer
spending accounts for more than two-thirds of all economic activity.

Price increases also help rebuild equity for homeowners who currently owe
more on their mortgages than their properties are worth. Roughly one in
three homeowners with a mortgage are now in that position, According to Moody’s Economic .com

The housing market is seeking stability as it bounces back from a four-year
recession. Sales of previously occupied homes fell almost 17 percent in
December, the largest monthly drop in 40-years of record-keeping, the
National Association of Realtors said. Data for January will be released
Friday, with analysts forecasting a 1 percent rise.

Sales of newly built homes are expected to rise 5.3 percent in January,
after declining sharply a month earlier. The Commerce Department will
release new data on Wednesday.

On a quarterly basis, U.S. home prices fell 2.5 percent compared with the
fourth quarter of 2008.

The Case-Shiller indexes measure home price increases and decreases relative
to prices in January 2000. The base reading is 100; so a reading of 150
would mean that home prices increased 50 percent since the beginning of the
index.

The Denver Real Estate Market is changing. Median home prices in metro Denver soared in January compared with the same month a year ago, even as sales during the same period declined, according to data released Tuesday.

The median price for a single-family home was $210,000, up nearly 16 percent from $181,500 in January last year, according to an analysis of Metrolist data. The median price for a condo was $130,500, an increase of 15 percent over last year’s January price of $113,000.

The number of homes on the market declined 9.9 percent to 17,785, compared with 19,748 at the same time last year. But inventory was up 8.1 percent from the 16,456 homes listed for sale in December. The number of homes sold in January dropped 4.7 percent to 2,353, compared with 2,469 a year ago. Sales were down 20.5 percent from 2,959 in December. The $8,000 first-time-home buyer tax credit initially was set to expire Nov. 30. Buyers rushing to take advantage of the credit pushed November sales up compared with the same month in the previous year. The tax credit ultimately was extended through April.

Denver Home Sales Down Nearly 17%

The Denver Metro area is at a normal level, finishing 2009 with a 5.7 month-supply. In 2009, its inventory fell 8.9 percent from November to December, and dropped 17.0 percent over the last year. Sales of previously occupied homes took the largest monthly drop in more than 40 years in December, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.

Home prices: Denver leads the nation in home price percentage increases,
according to the Standard & Poor’s/Case-Shiller Home-Price Index. Denver’s
S&P/Case-Shiller Home Price Index yearly percentage change improved for
the ninth consecutive month, falling only 0.1 percent between November 2008
and November 2009. As reported by Standard & Poor’s, “Denver and Dallas
are nearing positive territory with their annual figures at -0.1% and -0.6%,
respectively” . Home prices have benefited from the increased activity
in November when buyers rushed to purchase a home before the expiration of
the first time buyer credit. It’s incredible that prices were preserved
during that buying frenzy. With the extension of the first time buyer credit
perhaps we’ll see even more improvement.

The Denver Metro area is at a normal level, finishing 2009 with a 5.7 month-supply. In 2009, its inventory fell 8.9 percent from November to December, and dropped 16.0
percent over the last year.

Colorado – It must be noted that countless issues play into human decision-making. But the impact of public policy often is very important. The relative governmental costs among the states will impact where people live and work, that is, where they seek opportunity.  Starting up, running and/or investing in businesses are risky ventures. But as noted earlier, those ventures spur the economy forward.

Putting aside the political rhetoric, just how friendly or unfriendly are the policies that elected officials actually implement toward entrepreneurship and small business? In terms of their policy environments, the most entrepreneur-friendly states under the “Small Business Survival Index 2009” are: 1) South Dakota, 2) Nevada, 3) Texas, 4) Wyoming, 5) Washington, 6) Florida, 7) South Carolina, Colorado, 9) Alabama, 10) Virginia, 11) Ohio, 12) Alaska, 13) Tennessee, 14) Utah, and 15) Indiana. In contrast, the most anti-entrepreneur policy environments are offered by the following: 37) Maryland, 38) Oregon, 39) North Carolina, 40) Connecticut, 41) Iowa, 42) Hawaii, 43) Minnesota, 44) Massachusetts, 45) Rhode Island, 46) Maine, 47) Vermont, 48) New York, 49) California, 50) New Jersey and 51) District of Columbia. (Please note that the District of Columbia was not included in the studies on the states’ liability systems, eminent domain legislation and highway cost efficiency, so D.C.’s last place score actually should be even worse.)

In September, Colorado was ranked in fourth place by Forbes.com as among the best states for business in a report assessing business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. State officials have been crowing about that ranking ever since. Also in September, the Washington-based Tax Foundation said Colorado has the 13th most business-friendly tax system in the country.

Colorado’s index is 48.250.

Among the Centennial State’s individual rankings in the report are:

• 8th for lowest top corporate income tax rates.

• 10th for lowest top corporate capital gains tax rates.

• 15th for lowest state and local sales and excise taxes.

• 18th for lowest electric utility costs.

• 20th for fewest state and local government employees.

• 20th for lowest state and local property taxes.

• 22nd for lowest crime rate.

• 28th for lowest state and local government spend, 2006-07.

• 36th for fewest “health insurance mandates.”

Rated ahead of Colorado as most friendly to small business are South Dakota, Nevada, Texas, Wyoming, Washington, Florida and South Carolina.

New the bottom along with D.C. are New Jersey, California and New York.