Colorado Division of Housing

Some details on Grand Junction vacancies

noreply@blogger.com (Ryan McMaken) — Fri, 17 May 2013 17:13:00 +0000

Grand Junction's first-quarter vacancy rate of 11.8 percent is being driven by vacancies in 2bd/2ba apartments and 3bd apartments. In the first graph, we see that the first quarter's high vacancy rates in those units continues a trend that has been forming since 2010. On the other hand, vacancies in 1 bedroom and 2bd/1ba apartments have been rather low.

Higher vacancy rates in the larger units during times of economic distress are common due to economizing on the part of renters. Also, in smaller, less urbanized markets such as Grand Junction, the larger units compete with single-family rental homes. What we find in Grand Junction is that as the labor force shrinks (as it has been doing) and employment growth his limited, renters seek smaller apartments. It is especially easy to cut one's rent by downgrading slightly from a 2bd/2ba to a 2bd/1ba, and we see that vacancies in 2bd/1ba have actually been declining in recent years.

The big swing in vacancies down during 2011 (and then up again in 2012) was mirrored in other smaller markets as well, such as Greeley, and corresponds to the very low number of home sales that took place during 2011, among other factors.

Not surprisingly, we see in the next graph, that recent declines in average rents in the area are being driven by declines in average rents in the 2bd/2ba and the 3 bedroom units. Average rents in the smaller units have held up well, but we see some big declines in rents in the larger units.

One interesting aspect of the Grand Junction market is that the larger apartment buildings appear to be less popular. With the exception of the boom period, larger buildings in Grand Junction are consistently less popular than medium-sized and small buildings in the region. This is not the case in all similarly-sized markets. In Greeley, for example, larger building are more popular than smaller ones, historically speaking. In the next graph we do see that the first quarter's numbers in large buildings simply continue a trend that has been building since 2009.

So, recent high vacancy rates in the region are certainly not the result of uniformly increasing vacancies across the region. Instead, we find that high vacancy rates are driven by larger units in larger building. Some of this is a result of renters attempting to economize, and some of it is due to the fact that larger units compete with single-family rentals that can provide more space at comparable prices.

Additional notes:

According to the Census Bureau, the maximum number of apartments in Mesa county is about 8,100. This includes condos as well, so the number of apartments is somewhere below 8,000, and is likely around 6,000. The sample size form the vacancy survey then is about 20 percent of total units.

There are about 62,000 total housing units in Mesa County.

Colorado foreclosure filings plummet 41 percent during first quarter

noreply@blogger.com (Ryan McMaken) — Thu, 16 May 2013 17:03:00 +0000

New foreclosure filings were down 41.3 percent in Colorado during the first quarter of 2013 compared to the same period of 2012. According to a report released today by the Colorado Division of Housing, there were 4,571 foreclosure filings reported during the first quarter of 2013, compared to 7,785 reported during the first quarter of last year.

Foreclosure auction sales, or completed foreclosures, also fell significantly, dropping 30.5 percent from 2012’s first-quarter total of 4,221 to this year’s first-quarter total of 2,935.

Both foreclosure filings totals and foreclosure auction sales totals were the lowest quarterly totals collected in any quarter since the Division of Housing began tracking quarterly totals in 2007.

“This is a large decline in foreclosure activity,” said Ryan McMaken, economist for the Colorado Division of Housing. “The trend downward is accelerating, helped along by low mortgage rates, rising home prices, and a stabilizing employment situation.”

All of the state’s twelve metropolitan counties reported year-over-year declines in both foreclosure filings totals and foreclosure auction sales totals for the first quarter of 2013. The counties with the largest declines in new foreclosure filigns were Douglas County and Mesa County with drops of 49.3 percent and 47.1 percent, respectively.

Only ten of the state’s 64 counties reported year-over-year increases in foreclosure filings, and they were smaller counties with fewer than 40 total foreclosure filings in each county.

When adjusted for population size, the counties with the highest foreclosure rates were all found outside the metropolitan areas. The top five counties for the proportion of homes that were in foreclosure were Gilpin, Custer, Archuleta, Grand and Park counties.

“40 percent drops in foreclosure filings were typical all along the Front Range this past quarter,” McMaken said. “The decline in foreclosures has been a statewide phenomenon so far this year.”

Foreclosure sales are opened foreclosures that have proceeded through the full foreclosure process to final sale at public auction. Filings denote the beginning of the foreclosure process, and once a foreclosure is filed, the borrower has at least 110-120 days to work with the lender to avoid a completed foreclosure. It is during this period that borrowers work with lenders and housing counselors to work out loan modifications, short sales, or other ways of withdrawing the foreclosure.

News Digest, May 16

noreply@blogger.com (Ryan McMaken) — Thu, 16 May 2013 14:59:00 +0000

Fort Collins rental market eases, but not enough for many home seekersMcGinnis and others face an unbearably tight rental market with few available units, pricier rents and more stringent qualifications. A new quarterly survey on multifamily housing vacancies and rents shows Fort Collins’ vacancy rate loosened from 2.5 percent for the fourth quarter last year to 5.5 percent while the average rent climbed to $1,037. The increased vacancy rate, caused by new units coming on line, belies the reality of higher rents and fewer units. The difficulty compounds itself the closer you get to the Colorado State University campus, where vacancy rates are at 0.3 percent in the northwest part of town and 0.7 percent in the northeast, both areas around CSU.

Colorado foreclosure filings plummet 41 percent in the first quarter Foreclosure filings plummeted 41.3 percent during the first quarter of 2013 compared to the same period of 2012, the Colorado Division of Housing said Thursday. There were 4,571 foreclosure filings reported during the first quarter of 2013, compared to 7,785 reported during the first quarter of 2012. Foreclosure auction sales, or completed foreclosures, also fell significantly, dropping 30.5 percent from the 2012's first-quarter total of 4,221 to this year's first-quarter total of 2,935, according to the report.

192 acres purchased at I-25 and Prospect Road FORT COLLINS - A Colorado Springs investment group has purchased 192 acres of undeveloped land at the northwest corner of the intersection of Interstate 25 and Prospect Road. The owner, a limited liability company called Fort Collins/I-25 Interchange Corner, plans to develop the property in accordance with its current zoning. Twenty-one acres are zoned for urban estate, 68.6 acres are zoned for low-density mixed-use, 60.9 acres for employment and 26.9 acres for commercial uses.

Luxury home sales soar Luxury home sales skyrocketed in April, with sales of homes priced at $1 million or more rising almost 142 percent from April 2012, according to a report released today by independent broker Gary Bauer. “It was a record for luxury sales in April,” Bauer said. This 5,311-square-foot home in Cherry Hills Village sold for $2.78 million in April. Bauer also released two other reports for higher-end homes priced below $1 million, and found strong sales from homes priced from $500,000.

More stores coming to First & Main Town Center in Colorado SpringsColorado Springs' biggest retail complex is getting even bigger. A nearly 12,000-square-foot, single-story retail building is under construction at the First & Main Town Center on the city's east side, with completion expected by Thanksgiving, said Fred Veitch, a vice president with Nor'wood Development Group of Colorado Springs, the center's developer.

Recent Grand Junction news

noreply@blogger.com (Ryan McMaken) — Wed, 15 May 2013 22:30:00 +0000

The Sentinel reports that:

Home sales in Mesa County plateaued in the first quarter of 2013, but a bump in the median sales price and a drop in foreclosure filings and sales suggest the real estate market is continuing…

Note the number of home sales in the county actually fell slightly year over year for the first quarter, dropping from 580 to 577.

Also,

Apartment vacancy rate up; rent payments down

The percent of vacant apartments in Grand Junction hit a more than three-year high in the first quarter of 2013, according to the Colorado Division of Housing.

New Development:

Golf villas capitalize on desire to live near Redlands Mesa course

There’s fresh activity and excitement at Redlands Mesa Golf Course community, where Zag Built recently completed a new sales office near the clubhouse. Zag Built also purchased seven lots from Brightstar Development, the owner of the golf course community, and is currently putting in the infrastructure for golf villas. “We’ve had tremendous interest,” said Mike Zagrzebski with Zag Built. “We expect to have them pre-sold prior to starting.” The infrastructure construction will be done in June, but the sales office has drawings and plans for the villas and is currently talking to prospective customers. All of the homes have three bedrooms and at least two baths and a three-car garage is an option for the lots that can accommodate them.

KRDO story on apartment vacancies in Pueblo

noreply@blogger.com (Ryan McMaken) — Wed, 15 May 2013 17:35:00 +0000

The most recent vacancy and rent survey for Pueblo shows a vacancy rate of 14.9 percent. This high rate appears to be driven by larger buildings in the northwest part of town. Other areas show lower vacancy rates.

KRDO TV recently produced a story on the topic:

PUEBLO, Colo. -Pueblo has one of the highest apartment vacancy rates in the state. According to the Colorado Division of Housing, in the first quarter of 2013, there was a 14.9 percent vacancy rate compared to 5.9 percent in the first quarter of 2012.

Skyview Condominiums sits in northeast Pueblo. It's the area with the highest vacancy rate in the city. When Mickel Robinson and her husband took over the apartment complex two years ago, it was half full. Soon after, they evicted dozens of people who were causing trouble, which led to an increase in vacancies.

"We tried to change the area around a little bit and the reputation that we had over here, so we had to actually clean house a little bit," Robinson said.
The apartment is making a comeback, but the complex is still 50 percent vacant. Robinson said she's offering incentives that include rent discounts to tenants who refer a friend to the apartment.

Student debt load in Colorado

noreply@blogger.com (Ryan McMaken) — Tue, 14 May 2013 16:56:00 +0000

As you might expect, a household's student debt load will impact the availability of funds for rent or mortgage payments. It can also impact credit scores.

The NY Fed recently broke down student debt load info by state.

Perhaps due to the fact that Colorado has a rather high proportion of college-educated residents, and is attractive to recent students from other states, Colorado is well above average for its share of consumers with student debt:

However, when it comes to average student debt per borrower, Colorado is below average:

When it comes to the percent of student loans that are 90-days delinquent, Colorado is about average:

Here is the report.

Grand Junction Housing Snapshot, 1st Q 2013

noreply@blogger.com (Ryan McMaken) — Fri, 10 May 2013 21:47:00 +0000

The demand for real estate continues to be soft in Grand Junction. From employment to foreclosures, and from home prices to apartment vacancies, the region appears to be facing some downward pressure on demand right now.

Employment is one of the biggest factors in driving demand for real estate, and we find that Grand Junction continues to face some headwinds. According to the Household Survey, the labor force size in March fell to a six-year low for March. That is, compared to previous years, the month of March in Grand Junction showed the smallest labor force in any March since 2007. This means fewer people are looking for jobs in the area, and this will have an impact on overall household income.

The unemployment rate is calculated using the labor force totals, and we find that the decline in the labor force is helping the unemployment rate move down in Grand Junction in spite of lackluster job growth. The labor force size as of March 2013 was down 7.3 percent, or 6,100 people from the March 2009 peak. We might compare this to metro Denver, where the job force hit an all-time high for March during 2013. We could also compare to the Greeley area where the labor force is near an all-time, after peaking for March (so far) last year. The first graph shows total labor force for each month:

The next graph shows total employment in the area. We can see here that employment growth has been small, and that total employment is up only about 800 jobs (1.1 percent) from the 2010 trough over the past three years.

According to this measure, total employment in Grand Junction is down 8.7 percent, or 6,700 jobs from the March peak in 2008 to March 2013.

The Household survey has its limitations due to small sample size, so I've compared against the Establishment survey of payroll employees to check. The Establishment survey shows that Grand Junction employment in March was down 7.4 percent, or 4,700 jobs from the 2008 March peak.

The next graph shows the payroll employment, and here we find that the year-over-year growth rate in total employment has been declining since January. By contrast, statewide total year-over-year employment growth has been trending upward, with recent growth rates over 2.5 percent. In Grand Junction, growth rates have been below 2 percent in recent years. We could also note that the year-over-year growth in GJ has been smaller in recent years than during the recessionary period of 2002.

The next graph shows the House Price Index for GJ from the Federal Housing and Finance Agency. We can see that (through the end of 2012) the index has basically flatlined since 2011, and is way down from the bubble-like peak levels reached during 2007 and 2008.

When compared year over year, as I've done in the next graph, we see that growth has been hard to find in the Grand Junction HPI. There has been only one quarter of YOY growth since 2008. I compare that in the graph to the metro Denver HPI which has shown four quarters in a row of growth. Indeed, during the fourth quarter of 2012, the HPI in GJ was down slightly (0.2 percent) from 2011's fourth quarter.

Another indicator we can note is the index of completed foreclosures. In the next graph, I've indexed the number of completed foreclosures in Mesa County next to the number of completed foreclosures in all metro counties combined. Here, we see that the combined metro total (the green line) shows a slow and steady decrease in completed foreclosures since 2008, while Mesa County completed foreclosures (the blue line) is way up from 2008 levels. In fact, in all metros combined, the number of completed foreclosures is down more than 70 percent since 2008 (as of March 2013). In Mesa County, on the other hand, the number of completed foreclosures (as of March 2013) was up 350 percent since 2008, rising from 12 in January 2008 to 54 in March 2013. Compared year over year, the March total for completed foreclosures in Mesa County was down 27 percent, but that's not enough to bring totals down much from the highs at which they presently remain.

The next graph shows new housing permit activity in Mesa county. In this case, we find that total permits (both multifam and singlefam combined) at year-end 2012 were at the lowest rate seen since 1991, which is a 21-year low. There was a total of 323 singlfam permits and 12 multifam permits during 2012 in Mesa County. This is the lowest total yet since permits activity started moving down in 2007.

We can compare this to Colorado statewide, in which building permits hit a 5-year high during 2012, growing about 75 percent from 2011 to 2012. This is statewide:

If we look just as the first three month of this year (in the next graph), compared to the first three months of previous years, we do find a small increase of 25 percent in Mesa County, and a rise to a five-year high. Of course, these totals remain well below even the relatively weak years of 2003 and 2004. If we compare to the same time period statewide, we find that statewide, singlefam permits were up 54 percent, and multifam permits were up 147 percent for the three-month period, when compared to 2012's first three months.

Finally, we look at the vacancy and rent data from the first quarter's vacancy and rent survey. Here we find that the vacancy rate hit 11.8 percent during the first quarter of 2013, rising from 10.4 percent during the first quarter of 2012. It was also way up from the fourth quarter's vacancy rate of 9.7 percent. The next graph shows vacancy rates since 1995:

The softness in the rental market seems to reflect the overall softness we're finding in the region. As a result of the higher vacancies, rents headed down sharply during the first quarter of year, returning to levels not seen since 2006. We'll likely see the average rent number head back up again somewhat in the second quarter, but we should note that even at the first quarter average rent of $554 in the region (which was down 11.4 percent from last year's first quarter avg rent of $625), the average rent is still above what was common for the region prior to the oil and gas boom. Indeed, in spite of a relatively weak employment situation after 2009, the average rent in the region never fell very much from the elevated post-2006 levels.

The final graph shows the average rents in various regions adjusted for inflation. Rents tend to be fairly flat when adjusted for inflation over the long term. As we can see in the graph, however, real rent growth in Grand Junction from 2006 to early 2009 was really quite large, rising 12.3 percent in real terms from the third quarter of 2006 to the third quarter of 2009. Even after the unemployment rate in GJ rose above ten percent for most of 2010, the drop in the average rent was quite moderate. The drop during the first quarter of this year may signal a correction to that. It's too early to tell, however.

Referring back to the home price and foreclosure data, one might argue that the substitution effect should be pushing down vacancies, even in the face of a stagnant employment situation. That is, a lack of demand for purchase housing related to foreclosures and falling prices should be driving people into rental housing as a substitute. This is no doubt a factor, but in some recent regression analyses (discussed in part here), we found that the substitution effect was weak compared to the effects of employment. That is, when employment drove a rise in the demand for multifamily housing, it also drove a rise in the demand for singlefamily housing. So, employment is the dominant factor, and when it's weak, both multifamily and singlefamily experience soft demand.

Housing News Digest, May 10

noreply@blogger.com (Ryan McMaken) — Fri, 10 May 2013 14:50:00 +0000

Greeley area’s rental market now tightest in the state It’s a good thing help is just around the corner. Greeley’s rental market area has become the tightest in the state, according to numbers released Thursday by the state Division of Housing. The Greeley market’s vacancy rate for the first three months of the year sank to 1.4 percent — from 5.8 percent at the same time the year before — reversing a trend that had for years kept Fort Collins’ market one of the tightest in the states, the state survey reported. New rentals having been constructed in recent months put Fort Collins at a rate of 5.5 percent, …

Colorado apartment vacancy rate drops for 14th consecutive quarterApartment vacancy rates statewide continue to slide, especially in the northern part of the state, where oil and gas development has driven rents higher and vacancy rates lower, according to a report released Thursday by the Colorado Division of Housing.

Apartment vacancies rise in Fort Collins-LovelandThe vacancy rate in the Fort Collins-Loveland area rose to 5.1 percent during 2013's first quarter, rising from 2012's first-quarter rate of 3.0 percent, according to the Colorado Division of Housing. In Greeley over the same period, the vacancy rate dropped to 1.4 percent from 5.8 percent.

Colorado Springs apartments in high demandA strong demand for Colorado Springs apartments pushed the area's multi-family vacancy rate to its lowest level in almost 12 years during the first quarter, a report by the Colorado Division of Housing and the Apartment Association of Southern Colorado shows.

Report: Springs apartment market strongThe current Colorado Springs apartment market is healthy — maybe the healthiest it has ever been. That’s the conclusion by area experts after reviewing the most recent vacancy and rent survey results from the Colorado Division of Housing. Vacancy, at 5.6 percent, is the lowest locally in more than a decade. But it’s not so low that renters are crunched, said Ryan McMaken, an economist with the division of housing. “Healthy” should not be confused with normal, said Kevin McKenna, a Colorado Springs-based broker with the Denver office of Apartment Realty Advisors. “There’s no such thing as a typical apartment market in Colorado Springs,” McKenna said. “It’s always kind of all over the place.”

Apartment market tightens statewide as demand stalls in southern and western Colorado

noreply@blogger.com (Ryan McMaken) — Thu, 09 May 2013 20:48:00 +0000

The vacancy rate in Coloradoapartments was down during the first quarter of 2013, with the statewide composite vacancy rate falling year over year to 4.9 percent from 2012’s first-quarter vacancy rate of 5.2 percent. According to a report released todayby the Colorado Division of Housing, the statewide vacancy rate during the first quarter also fell from 2012’s fourth-quarter rate of 5.2 percent. During the first quarter, the vacancy rate was down, year over year, for the fourteenth quarter in a row.

Vacancy rates varied considerably in different metros of the state, however, with northern Colorado and metro Denvershowing some of the state’s lowest rates, while vacancy rates increased in southern Colorado and western Colorado.

The vacancy rate in the Fort Collins-Loveland area rose to 5.1 percent during 2013’s first quarter, rising from 2012’s first-quarter rate of 3.0 percent. In Greeleyover the same period, the vacancy rate dropped to 1.4 percent from 5.8 percent. Colorado Springsalso showed a declining vacancy rate with a first-quarter rate of 5.6 percent, which was the lowest vacancy rate reported in that region since 2001. The metro Denver vacancy rate, measured last month in a separate survey, fell year over year from 4.9 percent to 4.6 percent

A different trend appeared in southern and western Colorado where vacancy rates increased. In Pueblo, the vacancy rate rose to 14.9 percent during 2013’s first quarter from 2012’s first-quarter rate of 5.9 percent. Over the same period, the vacancy rate in Grand Junction vacancy rate increased from 10.4 percent to 11.8 percent.

“So much of this is driven by employment right now. Vacancy tends to increase with joblessness, and we see this in Grand Junctionand Pueblo” said Ryan McMaken, an economist with the Colorado Division of Housing. “The Pueblo unemployment rate has been over ten percent for more than a year, while the labor force in Grand Junction just hit a six-year low for March, with total employment moving sideways.”

The situation in northern Colorado, McMaken noted, is quite different.

“Oil and gas growth has pushed the vacancy rate down to very low levels in Greeley, while the Ft.Colliins and Loveland areas continue to see low vacancies,” McMaken said. “Rates in Larimer County are only as high as they are because the county has seen a fair amount of new multifamily development in recent years.”

The average rent increased in all metros except Grand Junction from the first quarter of 2012 to the first quarter of 2013. The statewide composite average rent increased 4.1 percent from $952 during 2012’s first quarter to $992 during the first quarter of 2013. The largest increase was found in Colorado Springs where the average rent rose 4.2 percent, year over year. The average rent fell 11.4 percent in Grand Junction, year over year.

Average rents in all metropolitan areas measured for the first quarter of 2013 were Colorado Springs; $787, Ft. Collins/Loveland, $1036; Grand Junction, $554; Greeley, $704; Pueblo, $594. The average rent in metro Denver, measured last month in a separate survey, was $992.

A vacancy rate of 5 percent or below suggests a tight market. The statewide composite vacancy rate and average rent includes metro Denver.

New Private Activity Bond Workshops

noreply@blogger.com (Ryan McMaken) — Thu, 09 May 2013 20:10:00 +0000

DOLA/Division of Housing (DOH) and the Colorado Housing and Finance Authority (CHFA) are partnering again this year to bring you workshops on Private Activity Bonds. The State of Colorado has over $492 million of Private Activity Bond (PAB) tax-exempt bonding authority annually. Make sure that your community is taking full advantage of this valuable resource to provide rental housing, home ownership and small manufacturing opportunities. Walk out knowing where to get it, what to use it for and how to use it!

We will offer the same workshop content in two locations plus a webinar:

Wednesday, June 12 in Colorado Springs
Tuesday, June 25 in Brighton
Wednesday, July 10 as a webinar

For more details, please see the brochure.

CoreLogic: Colorado home price index up 10.4 percent in March

noreply@blogger.com (Ryan McMaken) — Tue, 07 May 2013 23:04:00 +0000

CoreLogic today released its March home price index (HPI) numbers. There were few surprises as the HPI continued to show strong growth of around 10 percent for the third month in a row. National growth and Colorado growth rates were similar. Nationally, the index grew 10.5 percent from March 2012 to March 2013, and it grew 10.4 percent in Colorado. Housing prices continue to increase at some of the largest rates seen since before the financial crisis.

Nine states had larger growth rates in the HPI than Colorado, with the highest growth rates being in Nevada, California, and Arizona. Nevada's HPI grew 22.2 percent year over year, and California's and Arizona 'a HPIs grew 17.2 percent and 16.8 percent respectively. Only five states showed declines in their HPIs over the same period with the largest declines being in delaware and Alabama where the HPI declined 3.7 percent and 3.1 percent respectively.

Propelled by record-low mortgage rates, home sales continue to head up with home prices following suit.

DSNews: Homeownership Rate Drops to 18-Year Low

noreply@blogger.com (Ryan McMaken) — Tue, 07 May 2013 22:38:00 +0000

As noted in our recent post on homeownership rates, homeownership has been declining in recent years for a variety of reasons. According to DSNews the national rate has fallen off considerably:

The number of households owning homes fell 698,000 to 74,511,000 in the first quarter, the first decline in almost two years, according to a Census Bureau report Tuesday. At the same time, the nation’s homeownership rate fell to 65 percent (seasonally adjusted), the lowest level since the fourth quarter of 1995.

With the homeownership rate already at its lowest point since 1995, Capital Economics predicts further decline before a rebound occurs.

Colorado Springs rents grow as vacancy rates fall to 11-year low

noreply@blogger.com (Ryan McMaken) — Tue, 07 May 2013 22:14:00 +0000

The average rent in the Colorado Springs metro area rose year over year for the thirteenth quarter in a row during the first quarter of 2013, climbing 4.4 percent to $787. According to a report released today by the Colorado Division of Housing and the Apartment Association of Southern Colorado, the average rent for the region during the first quarter this year was up from $754 reported during the first quarter of 2012, and was down slightly from 2012’s fourth-quarter average rent of $790.

The median rent rose year over year to $760 during the first quarter, rising 4.4 percent from 2012’s first-quarter median rent of $728.

The average rent increased the most in the Northwest and Southeast regions, compared year over year for the first quarter, growing 8.6 percent in the Southeast region, and 17.9 percent in the Northwest region. The largest drop in average rent was found in the Security/Widefield/Fountain region where the average rent dropped 2.3 percent. The Northwest was the submarket with the highest average rent at $927 during the first quarter of 2013. During the same period, the lowest average rent was found in the Security/Widefield/Fountain submarket where the average rent was $601.

Average rents for all market areas were: Northwest, $927; Northeast, $731; Far Northeast, $860, Southeast, $701; Security/Widefield/Fountain, $601; Southwest, $802; Central, $746.

“The market has firmed up since the fourth quarter, with the rent level stable and the vacancy rate dropping to one of the lowest rates we’ve seen since the dot-com boom,” said Ryan McMaken, economist for the Colorado Division of Housing. “Year-over-year rent growth outpaced inflation during the first quarter, but a lot continues to depend on the employment situation in the region.”

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 5.6 percent during the first quarter of 2013, rising from last year’s first-quarter vacancy rate of 6.4 percent. This year’s first-quarter rate also fell from last year’s fourth-quarter rate of 7.1 percent.

From the first quarter of 2012 to the first quarter of 2013, the vacancy rate fell in the Northwest, Southeast, Southwest and Central submarkets. During the same period, the vacancy rate rose in the Northeast, Far Northeast and Security/Widefield/Fountain submarkets.

Vacancy rates for all market areas were: Northwest, 3.7 percent; Northeast, 5.6 percent; Far Northeast, 6.5 percent, Southeast, 7.3 percent; Security/Widefield/Fountain, 5.9 percent; Southwest, 4.5 percent; Central, 4.7 percent.

Homeownership rates in Colorado decline in 2012, early 2013

noreply@blogger.com (Ryan McMaken) — Tue, 07 May 2013 21:59:00 +0000

New data released late last month:

The homeownership rate declined during 2012 to a 14-year low, dropping to 65.3 percent. In 2011, the homeownership rate in Colorado was 65.9 percent. The last time it was lower than 2012's rate was during 1998 when the homeownership rate was 65.2 percent. For the second year in a row, the Colorado homeownership rate fell below the national homeownership rate. The national homeownership rate was 65.4 percent during 2012 and 66.1 percent during 2011. The first graph shows national and Colorado homeownership rates since 1984:

Quarterly rates have been published since 2005. As of the first quarter of 2013, the homeownership rate in Colorado and in metro Denver fell on a quarterly basis to 63.7 percent in Colorado and 61.0 percent to metro Denver. During the first quarter of 2012, the Colorado rate was 64.5 percent and the metro Denver rate was 61.9 percent. The homeownership rates were also down when compared to the fourth quarter of 2012, with Colorado down from the fourth-quarter 2012 rate of 64.9 percent, and metro Denver down from the fourth-quarter 2012 rate of 61.7 percent. Both Colorado and metro Denver homeownership rates were below the national rate of 65 percent during the first quarter of 2013. The second graph shows the homeownership rate for each quarter since 2005.

Clearly, the homeownership rate has been decreasing an all areas shown since at least 2005. The annual data suggests that the homeownership rate in Colorado peaked some time during 2003 and has been declining since.

Homeownership has declined partly due to foreclosures. From 2007, through 2012, there were more than 125,000 completed foreclosures. Out of approximately 1.2 million owner households, that's a substantial number. On the other hand, we've seen the homeownership continue to decline even as foreclosures taper off. This is due to the fact that Colorado continues to see pretty sizable numbers in household formation (more than 20,000 households per year). A lot of those new households are renter households since, even in the low-mortgage-rate environment we're in right now, it can still be a challenge to afford a home and get a mortgage.

Consequently, Colorado and metro Denver show lower homeownership rates than the nation precisely because we continue to see in-migration and steady population growth while much of the nation is seeing less growth right now. Those areas with less growth may show a higher homeownership rate because they're attracting fewer young new residents who are not homeowners.

Nat'l personal income growth drops to 3-year low

noreply@blogger.com (Ryan McMaken) — Fri, 03 May 2013 21:55:00 +0000

Colorado's economy appears to be outpacing the national economy in a variety of indicators right now. Let's have a look at national personal income growth to check in on the nat'l scene. The BEA released some new numbers on personal income on Monday. The numbers show that year-over-year growth in personal income dropped to the smallest growth rate (2.5 percent) seen since the first quarter of 2010:

Measured quarter-to-quarter, the growth rate turned negative for the first time since the third quarter of 2009. The growth rate was neg 0.7 percent.

The overall personal income total measures income of all types. If we isolate the income the comes from compensation to employees, we find that compensation also dropped to an almost 3-year low (the lowest since the 2nd Q of 2010):

The growth in compensation was 2.8 percent , year over year.

These are seasonally-adjusted annualized numbers.

National April employment situation

noreply@blogger.com (Ryan McMaken) — Fri, 03 May 2013 18:11:00 +0000

THE EMPLOYMENT SITUATION -- APRIL 2013


Total nonfarm payroll employment rose by 165,000 in April, and the unemployment 
rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics 
reported today. Employment increased in professional and business services, 
food services and drinking places, retail trade, and health care.

Household Survey Data

The unemployment rate, at 7.5 percent, changed little in April but has 
declined by 0.4 percentage point since January. The number of unemployed 
persons, at 11.7 million, was also little changed over the month; however, 
unemployment has decreased by 673,000 since January. (See table A-1.)

Among the major worker groups, the unemployment rate for adult women
(6.7 percent) declined in April, while the rates for adult men (7.1
percent), teenagers (24.1 percent), whites (6.7 percent), blacks (13.2
percent), and Hispanics (9.0 percent) showed little or no change. The
jobless rate for Asians was 5.1 percent (not seasonally adjusted),
little changed from a year earlier. (See tables A-1, A-2, and A-3.)

In April, the number of long-term unemployed (those jobless for 27
weeks or more) declined by 258,000 to 4.4 million; their share of the
unemployed declined by 2.2 percentage points to 37.4 percent. Over the
past 12 months, the number of long-term unemployed has decreased by
687,000, and their share has declined by 3.1 percentage points. (See
table A-12.)

The civilian labor force participation rate was 63.3 percent in April,
unchanged over the month but down from 63.6 percent in January. The
employment-population ratio, 58.6 percent, was about unchanged over
the month and has shown little movement, on net, over the past year.
(See table A-1.)

In April, the number of persons employed part time for economic
reasons (sometimes referred to as involuntary part-time workers)
increased by 278,000 to 7.9 million, largely offsetting a decrease in
March. These individuals were working part time because their hours
had been cut back or because they were unable to find a full-time job.
(See table A-8.)

In April, 2.3 million persons were marginally attached to the labor
force, essentially unchanged from a year earlier. (The data are not
seasonally adjusted.) These individuals were not in the labor force,
wanted and were available for work, and had looked for a job sometime
in the prior 12 months. They were not counted as unemployed because
they had not searched for work in the 4 weeks preceding the survey.
(See table A-16.)

Among the marginally attached, there were 835,000 discouraged workers
in April, down by 133,000 from a year earlier. (The data are not
seasonally adjusted.) Discouraged workers are persons not currently
looking for work because they believe no jobs are available for them.
The remaining 1.5 million persons marginally attached to the labor
force in April had not searched for work in the 4 weeks preceding the
survey for reasons such as school attendance or family responsibilities. 
(See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment increased by 165,000 in April, with
job gains in professional and business services, food services and
drinking places, retail trade, and health care. Over the prior 12
months, employment growth averaged 169,000 per month. (See table B-1.)

Professional and business services added 73,000 jobs in April and has
added 587,000 jobs over the past year. In April, employment rose in
temporary help services (+31,000), professional and technical services
(+23,000), and management of companies (+7,000).

Within leisure and hospitality, employment in food services and
drinking places rose by 38,000 over the month. Job growth in the food
services industry averaged 25,000 per month over the prior 12 months.

Retail trade employment increased by 29,000 in April. The industry
added an average of 21,000 jobs per month over the prior 12 months. In
April, job growth occurred in general merchandise stores (+15,000) and
in health and personal care stores (+5,000).

Health care added 19,000 jobs in April. Within the industry, employment 
rose in ambulatory health care services (+14,000). Over the prior 12 
months, job growth in health care averaged 24,000 per month. In April, 
employment also continued its upward trend in social assistance (+7,000).

Employment changed little over the month in construction, with small
offsetting movements in the residential and nonresidential components.
Construction gained an average of 27,000 jobs per month over the prior 
6 months. Manufacturing employment was unchanged in April.

Employment in other major industries, including mining and logging,
wholesale trade, transportation and warehousing, financial activities,
and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls
decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, 
the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined 
by 0.1 hour to 3.3 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls decreased by 0.1
hour to 33.7 hours. (See tables B-2 and B-7.)

In April, average hourly earnings for all employees on private nonfarm
payrolls rose by 4 cents to $23.87. Over the year, average hourly
earnings have risen by 45 cents, or 1.9 percent. In April, average
hourly earnings of private-sector production and nonsupervisory
employees edged up by 2 cents to $20.06. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for February was
revised from +268,000 to +332,000, and the change for March was
revised from +88,000 to +138,000. With these revisions, employment
gains in February and March combined were 114,000 higher than
previously reported.

____________
The Employment Situation for May is scheduled to be released on
Friday, June 7, 2013, at 8:30 a.m. (EDT).

Dianne Ray Named Board Chair for Colorado Housing and Finance Authority

noreply@blogger.com (Ryan McMaken) — Fri, 03 May 2013 17:50:00 +0000

Press release from CHFA:

Dianne Ray Named Board Chair for Colorado Housing and Finance Authority

(DENVER) – Colorado Housing and Finance Authority (CHFA) is pleased to announce that Colorado State Auditor Dianne Ray has been named CHFA’s board chair for the 2013-2014 board term. CHFA’s 11-member board serves as the governing body of the organization and establishes policies to further its mission of affordable housing and small business finance. Ms. Ray began serving on CHFA’s board of directors in 2011. She also serves as chair of CHFA’s Audit Committee.

As the Colorado State Auditor, Ms. Ray is responsible for overseeing independent state audits and reviews that hold government agencies accountable and promote positive change in government. Ms. Ray has more than 23 years of specialization in governmental and nonprofit accounting and auditing. Ms. Ray previously served as the Deputy State Auditor and the Director of the Local Government Audit Division for the Colorado Office of the State Auditor (OSA). Prior to joining the OSA, she worked in local governments for 15 years, most recently as the Director of Finance and Administration for the City of Louisville, Colorado.

Ms. Ray participates in various professional organizations, including the American Institute of Certified Public Accountants (AICPA), the Colorado Society of Public Accountants, the Government Finance Officers Association and the National State Auditors Association. She was named one of three 2012 Women to Watch in the experienced category by the AICPA and the Colorado Society of Public Accountants.

First Quarter 2013 metro Denver apartment vacancies and rents

noreply@blogger.com (Ryan McMaken) — Mon, 29 Apr 2013 15:16:00 +0000

The apartment vacancy rate in the Denver metro area fell to 4.6 percent during the first quarter of 2013, dropping to the second-lowest vacancy rate recorded in any quarter since the first quarter of 2001. According to a report released Monday by the Apartment Association of Metro Denver and the Colorado Division of Housing, the metro Denver vacancy rate was down from 2012’s first-quarter rate of 4.9 percent, and was also down from last year’s fourth-quarter rate of 4.9 percent.

For the past fourteen quarters, the vacancy rate has fallen when compared to the same quarter one year earlier. The last time the quarterly vacancy rate rose year over year was during the third quarter of 2009.

From the first quarter of 2012 to the same period of 2013, the vacancy rate dropped in Arapahoe County, Jefferson County, and the Boulder Broomfield area. The rate rose in Adams County, Denver County, and Douglas County during the same period.

“The number of new apartments delivered has increased rapidly since 2010, but the numbers haven’t been large enough so far to push vacancy rates up significantly, said Ryan McMaken, an economist with the Colorado Division of Housing. “We do see some submarkets where vacancies are temporarily up as new communities lease up, but that’s not indicative of a decline in demand.”

As vacancy rates moved down, the area’s average rent increased to the highest level recorded in any quarter. During the first quarter of 2013, the average rent in metro Denver rose to $992, increasing 4.2 percent, or $40, from 2012’s first-quarter average rent of $952.

The average rent rose in all counties measured except Adams County, with the largest increases found in Douglas County and in the Boulder/Broomfield area where the average rents grew year over year by 6.9 percent and 7.4 percent, respectively.

The county areas with the highest average rents were Douglas County and the Boulder/Broomfield area where the average rents were $1,186 and $1,150, respectively. Adams County reported the lowest average rent at $910.

“Rent growth is solid, and even when adjusted for inflation, the average rent is almost to a nine-year high,” McMaken said.

2013’s first-quarter vacancy rates by county were Adams, 5.2 percent; Arapahoe, 4.1 percent; Boulder/Broomfield, 3.2 percent; Denver, 5.4 percent; Douglas, 6.5 percent; Jefferson, 3.7 percent.

Average rents for all counties were: Adams, $910; Arapahoe, $950; Boulder/Broomfield, $1,150; Denver, $1,008; Douglas, $1,186; and Jefferson, $958.

Housing News Digest, April 19

noreply@blogger.com (Ryan McMaken) — Fri, 19 Apr 2013 16:34:00 +0000

Homeowners can expect continued decline in assessed property valuesCounty assessors will send hundreds of thousands of property-valuation notices out in coming days, and the flat or declining values that many will show could surprise some homeowners. Property valuations are made per state law every two years, and the latest assessments will be used in the formula that determines property taxes due in 2014 and 2015.

Colorado adds few new jobs in March; unemployment eases to 7.1%Colorado added just 500 new payroll jobs in March, a much smaller gain than the previous month, while the state's unemployment rate eased to 7.1 percent, the lowest since January 2009, the Colorado Department of Labor and Employment reported Friday.

Economist says Colorado economy strong but warns of U.S. slowdownAn economist told Colorado builders and contractors Thursday that the United States will probably see an economic slowdown in 2013. But Anirban Basu, chairman and CEO of Sage Policy Group, said the outlook for Colorado is much brighter, with a strongly recovering economy that is likely to remain that way.

Morguard North American Residential REIT Completes Acquisition of Six Multi-Unit Residential Assets in the U.S. for US$218 MillionThe six properties acquired are residential apartment and townhome complexes comprised of 1,793 suites located in Denver, Colorado, Tampa, Florida, Cary, North Carolina and Atlanta, Georgia. The properties are best-in-class low rise, enclave assets with structured and surface parking, modern leasing centers and amenity packages with a weighted average age from construction of 11 years.

New home construction hits prerecession markNorthern Colorado is doing at least as well or a little better, according to local homebuilders. “It would take a pretty big wrench to throw us off track,” said Greg Miedema, executive director of the Home Builders Association of Northern Colorado.

LPS: Colorado reports sixth-lowest rate of non-current loans during February

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 22:35:00 +0000

According to the February LPS Mortgage Monitor , released last week by Lender Processing Services, 10.2 percent of mortgage loans during February were "non-current" in the United States. That is, they were 90-plus-days delinquent or were in foreclosure.

In Colorado, the percentage of active mortgage loans that were non-current during February was 5.2 percent, which was down 18.1 percent from the same period last year. Colorado's year-over-year decline in non-current loans was the 4th largest in the nation. Only California Arizona, and Minnesota showed larger declines.

Only five states reported lower percentages of non-current loans than Colorado, making Colorado 6th-best in the nation for the percentage of its mortgage loans that were non-current during February 2013. Montana, Wyoming, South Dakota, Alaska and North Dakota reported lower percentages of non-current loans during February.

The states with the highest rates of non-current loans were Florida, New Jersey, and Mississippi with non-current rates of 18.5 percent, 16.3 percent and 16.0 percent, respectively.

According to LPS: "LPS Mortgage Monitor is an in-depth report of mortgage industry performance. The monthly report is based on data from the company’s market-leading repository of loan-level residential mortgage data and performance information, including more than 40 million active loans across the credit spectrum. This data is analyzed by LPS experts to produce more than 30 charts and graphs reflecting both trend and point-in-time performance observations."

Corelogic: Home price index up 10.5 percent in Colorado for February

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 22:15:00 +0000

Corelogic's home price index for Colorado increased year over year for the thirteenth month in a row during February 2013, increasing yet again to the highest growth rate seen since the beginning of the recession in 2008.

Colorado showed a 10.5 percent increase from February 2012 to February 2013. The February HPI report, released last week by Corelogic, shows the national HPI rising by 10.2 percent, year over year. Since mid-2012, year-over-year growth in the HPI for Colorado has been robust, as inventory continues to decline and demand for home purchase remains steady or increasing among Colorado residents.

Recent increases reflect ongoing very-low mortgage rates helped by ongoing monetary easing at The Fed. At this time, low interest rates look to continue, and as population and employment continues to grow in Colorado, demand for purchase homes will remain. Nationwide, growth has not been as strong as the nationwide HPI continues to be pulled down a bit by relatively weak home purchase activity in the old Rest Belt areas such as Ohio and Pennsylvania.

See the home price archive for comparisons with other indices.

The CoreLogic HPI reflects ongoing home price growth that we also see in several other home price indices such as those form FHFA and Case-Shiller.

In the February report, six states reported larger year-over-year increases than Colorado. The states with the largest increases were Nevada, Arizona, and California with increases of 19.3 percent, 18.6 percent, and 15.3 percent, respectively. Only three states showed declines in the index, and were Illinois, Alabama and Delaware, with drops of 1.0 percent, 1.5 percent, and 4.4 percent, respectively.

Beige Book: District Ten sees growth at a 'moderate pace'

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 21:34:00 +0000

The Federal Reserve System released its Beige Book economic summary today. According to the national report:

Reports from the twelve Federal Reserve Districts suggest overall economic activity expanded at a moderate pace during the reporting period from late February to early April. Activity in the Cleveland, Richmond, St. Louis, Minneapolis, and Kansas City Districts was characterized as growing at a moderate pace, while the Boston, Philadelphia, Atlanta, Chicago, and San Francisco Districts noted modest growth. The New York and Dallas Districts indicated that the pace of expansion accelerated slightly since the previous Beige Book.

According to the report from the Kansas City Fed's district, which includes Colorado, 'expectations for future activity strengthened.'

'Residential real estate activity rose sharply in March, and commercial real estate activity strengthened' while in banking, banks reported 'stable loan demand, improving loan quality, and stronger deposits.'

See the full KC district report.

First Quarter 2013 'Housing Snapshot' now available

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 21:21:00 +0000

The statewide Housing Snapshot is now available. The statewide snapshot is a brief look at recent trends in employment, rental housing, home prices, and permits.

This issue looks at some of the housing stats released early this year, reflecting late 2012 and early 2013 trends.

Click here for the latest issue.

Buildfax: Remodeling activity in US West up 12 percent in February

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 15:43:00 +0000

According to Buildfax, remodeling activity during February 2013 was up 12 percent from February 2012 in the U.S. West region. Data is based on counts of remodels authorized by building permits in the U.S. This was the largest year-over-year increase among all regions.

According to the press release:

National Residential Remodeling
Residential remodels authorized by building permits in the United States in February were at a seasonally-adjusted annual rate of 3,299,000. This is 2 percent below the revised January rate of 3,360,000 and is 8 percent above the February 2012 estimate of 3,051,000.
Regional Residential Remodeling
Seasonally-adjusted annual rates of remodeling across the country in February 2013 are estimated as follows: Northeast, 446,000 (up 4% from January and up 4% from February 2012); South, 1,340,000 (up 2% from January and up 7% from February 2012); Midwest, 716,000 (down 17% from January and up 2% from February 2012); West, 846,000 (down 5% from January and up 12% from February 2012).

U-Haul: Denver 19th of 30 top US cities for growth

noreply@blogger.com (Ryan McMaken) — Wed, 17 Apr 2013 14:57:00 +0000

U-Haul puts out analyses of move-ins and destinations for truck renters periodically. They have recently released their list for 2012 for top-growth cities, which shows Denver 19th of the 30 top cities for growth.

Pittsburgh and Henderson, Nevada topped the list.

Denver's ranking slipped from 2011 to 2012. Back in 2011, Nashville and Oakland topped the list, while Denver came in third.

In 2010, Colorado Springs made the list at number 13 out of 30, and Denver did not make the list at all.