Colorado Economy Journal

How Religious Freedom in America Was Founded on Privatization and Decentralization

noreply@blogger.com (Unknown) — Thu, 18 Dec 2025 23:43:05 +0000

A common myth about American history is the one in which a handful of so-called “founding fathers” in the 1780s declared that America would create a “wall of separation” between religious institutions and government institutions. After that, the First Amendment to the US constitution was instrumental in ensuring that religious institutions would be totally separate from American political institutions. Or so the story goes.

Much of this myth is premised on the idea that the spread of religious freedom in America was a top-down process. In this narrative, the process was guided by non-Christian secularists like Thomas Jefferson who were especially influenced by the ideology of the French Enlightenment.

This historical narrative is wrong in nearly every way. For example, it is not at all the case that the First Amendment was central to the process of disestablishment—the process of abolishing the “official” churches who held favored positions within most state governments. Rather, this process was carried out overwhelmingly in the state legislatures—and some of this was done before the First Amendment was even written. Nor is it true that the process of disestablishment was guided primarily by the thinking of the so-called “Enlightenment.” Rather, it was mostly Christian activists who sought to end disestablishment as a means of clearing the way for the non-established Christian groups who had not benefited from taxpayer funding or regulatory favoritism. Disestablishment was, in other words, a means of privatizing the churches and creating a “free market” in religious practice. Most who favored disestablishment thought it would lead to the spread of religious practice, not its abolition or restriction.

It was not until the twentieth century, when most American jurists and policymakers had thoroughly adopted truly secularist views, that the First Amendment came to be seen as a legal tool to dictate to state and local governments how they ought to regulate the relationship between church and state.

Disestablishment: A State-Level Process

Popular narratives have long focused almost exclusively on the federal government in the realm of religious freedom, and this has usually obscured the decentralized reality of disestablishment. As Michael Baysa puts it: ”The disestablishment of religion in America has a long and storied history that, at times, becomes muddled with the histories of the first amendment of the United States Constitution; Thomas Jefferson’s famous language of the “separation of church and state”; anti-Anglicanism during the Revolutionary War; and court cases over the freedom of religious exercise.”[1]

When we’re talking about the spread of religious freedom during the late eighteenth and the nineteenth century, the story is overwhelmingly one that plays out at the state level.

After all, there never was any established national Church in America at all. Consequently, there is no process of disestablishment at the federal level to describe. Rather, the First Amendment was largely the product of anti-federalists and other decentralists who wanted guarantees that the federal government would not intervene at all in state laws related to religion. This is why the First Amendment states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” It is only the national legislature, Congress, that is limited by this text. This established that policy related to the churches was to be exercised outside the purview of the federal government.

In this context, it made perfect sense when President Andrew Jackson refused to issue a national proclamation of prayer and thanksgiving—as some presidents before him had—insisting that a federal proclamation “might disturb the security which religion now enjoys in the country, in its complete separation from the political concerns of the General Government.” Again, note the concern here is a connection between religion and the “general” (i.e., federal) government.[2] There was no question as to whether or not state governments could issue such proclamations. It was widely accepted that they could.

Moreover, many of the states had already begun the process of disestablishment before the Bill of Rights was even ratified in 1791. New York and North Carolina disestablished in the 1770s, and Virginia did so in the 1780s. South Carolina followed in 1790. Indeed, by the time Andrew Jackson was sworn in in 1829, only Massachusetts retained an established church. That ended in 1833.

The process overturned what had been a well established colonial practice of establishment churches. Prior to the American revolution,

In America, government churches provided services in all but three of the 13 colonies. In New York, New Jersey, Maryland, and the southern colonies, the established church was Anglican. This church was disestablished after the Revolution. Within New England, excepting Rhode Island, the established churches were Congregational.[3]

The disestablishment process that took place from the 1770s to the 1830s was all done without any mandate or oversight from the federal government under the auspices of the First Amendment. This process is described in detail in a 2019 book, Disestablishment and Religious Dissent: Church-State Relations in the New American States, 1776–1833, edited by Carl H. Esbeck and Jonathan J. Den Hartog.

The editors first note that the process was very diverse in nature, stating “Each colony had unique and differing traditions of church-state relations rooted in the colony’s peoples, their countries of origin, church affiliations, and theological principles.”[4]

The issue of secularization or disestablishment at the federal level was simply not a pressing issue. Esback and Den Hartog continue:

There was never a national disestablishment. Neither the federal government, instituted in 1789 in New York City, nor the Articles of Confederation, approved in 1781 near the end of the revolutionary fighting, ever had anything resembling an established church. So there was nothing to dismantle. Rather disestablishment was entirely a state-by-state affair.[5]

One would certainly not know this from the usual sloganeering and popular history frequently employed in the context of religious freedom. Contrary to the usual narrative, there is no federal history of disestablishment that has been, as Esbeck and Den Hartog put it, “repeated as axioms in grade-school social studies classroom right on through textbooks for university undergraduates.”[6]

Disestablishment took many forms and the way it was carried out varied from state to state. Perhaps the most important factor in disestablishment was ending taxpayer-funded financial support for the state church. These funds were used to pay salaries for church personnel and to pay rents. State laws favoring established churches also were used to regulate religious creeds, clerical appointments, and the keeping of legal records on matters such as marriages and deaths. Established churches generally enjoyed a pride of place in controlling legal records and managing tax-funded poverty relief programs.

In some cases, state government even mandated attendance of worship services of the established church. This could be enforced by fines or other sanctions as had been the case in England when so-called “dissenters” were sanctioned for being absent at official church services.

Often, the laws establishing and protecting the state church were not all repealed at once, but gradually over a period. Some remnants of these laws lingered until the mid-twentieth century, but by the 1830s, disestablishment was clearly the dominant legal trend when it came to religion with the American states.

Importantly, this all occurred totally separate from federal policymaking. It is likely that by the early nineteenth century, the United States was the most freewheeling place on earth in terms of the relative level of freedom in religious worship.

Why Christian Groups Wanted Disestablishment

Because the process of disestablishment is so often mashed up with commentary on the secularist religious views of a handful of policymakers at the federal level, one is often left with the impression that disestablishment must be the product of the importation of “Enlightenment thinking” through theorists like Thomas Jefferson. There is little evidence, however, that this was the common, motivating view among advocates for disestablishment in general.

Rather, disestablishment was widely advocated by religious leaders from Christian groups outside the established church: “A majority of the colonists who agitated for disestablishment were religious dissenters who, although in agreements concerning the general tenets of Protestant Christianity, still materially differed form the established Protestant church of their state. Their beliefs motivated them to seek freedom for reasons that are rooted in Christianity, as they understood the teachings of the faith.”[7]

As with many political and legal trends that accelerated during the revolution, the drive for religious freedom via disestablishment has its roots in the historical experience of the English Civil Wars and the seventeenth century. At that time, Religious “dissenters”—those who refused to attend the services of the established Church of England—had become a growing political force in England and in English colonies. Those who refused to actively participate as members of the established church were subject to fines and other sanctions. This was applied to the Puritans, Quakers, and other Christian groups (including Catholics, of course) outside the seventeenth century “mainstream.” Many fled to the English colonies in North America. Pennsylvania, Rhode Island, and Maryland “were explicitly founded as havens for dissenters,” for example, and many other colonies contained sizable minorities that also remained suspicious of the established churches for similar reasons.[8]

Moreover, once the American Revolution began, those colonies where Anglicanism was the established church were subject to disestablishment as a wartime measure. That is, the state legislatures in these areas, controlled by revolutionary “Patriots” sought to further separate the colony from the British state by ending any and all privileges enjoyed by institutions of the Church of England. After all, Anglican clergy were often the most enthusiastic opponents of the American revolution, and areas with substantial numbers of active Anglicans were often hotbeds of loyalist activity.[9] Not surprisingly, American separatists began targeting Anglican institutions as de facto instruments of British state power.

After the revolution, Christian groups continued to support disestablishment because the non-established group believed themselves more likely to thrive in an environment of free-choice in religious worship. Moreover, non-established churches very reasonably felt themselves wronged for being forced, via taxation, to pay for competing religious groups. In an effort to simply side step so much of the political conflict that had arisen from the existence of state churches, many post-Revolution Americans simply wanted to stop funding the state churches and to allow true competition among religious groups, unregulated by civil authorities.

[Read More: “The Fall and Rise of Puritanical Policy in America“ by Mark Thornton.]

Within the context of economics, we might also refer to this process as “privatization” or creating a more free-market in religious participation. Many who advocated for it did no not do so to lessen religious devotion in the states that were engaging in disestablishment and privatization of religion. Many assumed the process would increase religious participation by allowing taxpayers to put their money toward their preferred churches outside state control.

Moreover, some church leaders concluded that religious institutions unattached to public funding were more able to hold to doctrines and principles that may have been unpopular among the masses. True privatization meant the ability to set the terms of membership:

In Massachusetts, for example, the most conservative Congregational ministers sought to separate church from state because, increasingly, they believed that the right of a religious community to set the terms for membership trumped the benefits of tax support. With tax support came the obligation to serve all members of the community and to accept the decisions of the majority. The result, according to one minister in 1828, was to enslave the church to a “civil master.”

Ultimately, many who believed privatization would lead to more religious devotion were arguably proven right, at least during the nineteenth century. Following privatization, the end of “local monopoly powers of churches ... increased communities’ demand for preachers.”[10] This expansion was made possible by private funds. Indeed, the effects of early privatization of religion in America may even be felt today, since, as Kelly Olds notes, “Many scholars believe that the privatization of religion is one of the main reasons that the religious services sector in America is so much larger than that in Europe today.”[11] Europe, of course, arrived very late to the process of privatizing churches, and even today, the “church tax” persists in some countries.

Given all this, we can surmise it would be a mistake to attempt to pigeon-hole American disestablishment as a product of the Enlightenment in Europe and its ideals of mandatory secularization.

The Centralization and Federalization in America

Today, the old ideals of decentralizing and privatizing religious worship have been abandoned for a new model in which federal judges and federal government dictate to state and local governments what constitutes “religious freedom.” This deformation of earlier notions of religious freedom originates in 1947 with the US Supreme Court case of Everson v. Board of Education.[12] At that time, the court invented a new legal interpretation of the First Amendment, and “incorporated” the Bill of Rights’ establishment clause as binding on the states through the Fourteenth Amendment.

This is why today federal judges have hijacked the issue of religious freedom and the federal government has the last say in what a community school in small-town America is allowed to teach in the classroom. It’s why the federal government decides for itself whether or not state taxes can be spent on religious institutions. So much for “Congress shall make no law...” as the foundation of the First Amendment. Today, no religious institution, ritual, or prayer group at a city park’s picnic ground is safe from federal intervention. This signals an enormous change from the ideals of religious freedom during Jefferson’s time. What was once imagined as a means for limiting state power now serves as an excuse for the central state to exercise its police power in every corner of America.

Baysa, Michael. Journal of the Early Republic 41, no. 1 (2021): 135. https://www.jstor.org/stable/27105348.

From a letter to the Synod of the Reformed Church, June 12, 1832, reprinted in John Spencer Bassett, ed., Correspondence of Andrew Jackson, vol. 4 (Washington, D.C.: Carnegie Institution, 1929).

Kelly Olds, “Privatizing the Church: Disestablishment in Connecticut and Massachusetts,” Journal of Political Economy 102, No. 2 (April 1994): 278.

Carl H. Esbeck and Jonathan J. Den Hartog, Disestablishment and Religious Dissent: Church-State Relations in the New American States, 1776–1833 (Columbia, MO: University of Missouri Press, 2019)p. 4.

Ibid., p. 4.

Ibid., p. 8.

Ibid., p. 11.

Michael W. McConnell, “Establishment and Disestablishment at the Founding, Part I:Establishment of Religion,” Wm. & Mary L. Rev. 44, (2003): 2110-2111. https://scholarship.law.wm.edu/wmlr/vol44/iss5/4

Ibid., p. 2125.

Olds, “Privatizing the Church,” p. 280.

Ibid., p. 277.

Carl H. Esbeck, “The Establishment Clause: Its Original Public Meaning and What We Can Learn From the Plain Text,” Federalist Society Review, 26 (2021).

CPI Price Inflation Slows as Oil Prices Fall and Rents Flatten

noreply@blogger.com (Unknown) — Thu, 18 Dec 2025 23:28:00 +0000

After a long delay, the federal Bureau of Labor Statistics today reported its price inflation report for the first time since the September report. According to the report, price inflation, as measured by the CPI slowed in November, both year over year, and from September to November. (Most October CPI data was not collected due to the federal shutdown.)

Measured year over year, CPI inflation in November was up by 2.7 percent, falling from September’s YoY increase of 3.0 percent. During the same period, the CPI rose by 0.20 percent from September to November. By comparison, the CPI rose by 0.31 percent from August to September.

Removing volatile food and energy prices, the so-called core CPI showed similar changes. Year over year, the core CPI also slowed to 2.6 percent in November, falling from September’s YoY increase of 3.0 percent. Core CPI growth also slowed, growing by 0.16 percent from September to November, as compared to 0.23 percent growth from August to September.

This downward movement in CPI growth—which remains positive and well above the Fed’s two-percent target—reflects, in part, falling oil prices which has helped to drive down gasoline prices as measured in the report. Year over year, the CPI index for gasoline has been down ten of the last 12 months, for example. And the oil price has fallen by more than twelve dollars per barrel over the past year.

Another factor has been a slowdown in rents in recent months. For example, the CPI for rent was up by 4.3 percent, year over year, during November of last year. This past November, rent growth had slowed to 2.95 percent. We can expect further downward pressure in rents and home prices—which will eventually also slow CPI growth—as BLS data catches up with current and ongoing downward movement in both rents and home prices.

For example, the National Association of Realtors showed a negative year-over-year change in median listing price for November. For the 12-month period ending in August, eight out of twelve months showed negative growth in prices for new houses sold.

This all reflects a general softening of demand as the global economy slows. As Jerome Powell noted at the most recent FOMC press conference, the labor market has slowed significantly in the United States, and new hires have virtually disappeared from the economy—the “job finding rate” has fallen to very low levels. Moreover, layoffs in October and November rose to levels not seen since 2009.

This helps explain, in part, why the Fed has continued to loosen monetary policy even as CPI inflation has failed to move back to the Fed’s two-percent target over the past year. Remember, for example, that it was back in September of last year when Powell claimed CPI inflation was moving swiftly back toward two percent. At the time, Powell was justifying the Fed’s cut to the target interest rate even as CPI inflation remained near 3 percent. (The cut was clearly politically motivated, but Powell had tom come up with some sort of excuse for the move.)

Powell and the Fed were clearly wrong, given that 14 months later, the CPI inflation rate is still closer to 3 percent than two percent. (The Fed’s preferred inflation measure, PCE, was still 2.8 percent in the most recent report, and the latest Cleveland Fed estimate still shows 2.61 percent.)

Yet, the Fed likely believes it can get away with lowering interest rates during a period of elevated inflation because the slackening economy will put downward pressure on demand, and therefore on prices. We’re already seeing it in oil prices and real estate prices. Economic weakness is also seen in rising delinquency rates, mounting bankruptcies, and similar measures.

This will mean falling prices in spite of continued monetary inflation. In other words, as we see price inflation growth flatten, it will be due to larger economic softening, and not to imagine Fed efforts to return to “price stability.”

Unfortunately, all this means ordinary people will have no chance of regaining any of the lost purchasing power—especially purchasing power lost due to supercharged price inflation that occurred during 2022 and 2023. The Fed will not allow prices to fall, no matter how much demand falls. That is, were the Fed to back off on its efforts to further fuel additional monetary inflation, price deflation would provide relief to consumers via falling prices. That won’t happen because the benefits of deflation will instead be nullified by continual monetary inflation from the Fed. As workers are forced to scrimp and cut back due to stagnation in employment and real wages, workers will still have to face rising prices. Powell, after all, admitted during December FOMC press conference that “conditions in the labor market appear to be gradually cooling, and inflation remains somewhat elevated.” This is also called stagflation. We can already guess what “solution” to the problem the Fed will choose. The answer is always “more monetary inflation.”

Originally published by the Mises Institute.

November’s Weak Jobs Report Pushes the Fed Toward More Monetary Stimulus

noreply@blogger.com (Unknown) — Wed, 17 Dec 2025 17:42:00 +0000

Originally published by the Mises Insitute.

The Bureau of Labor Statistics finally released its November report today—after a nearly ten-day delay—and the latest data shows that the employment situation in America continues to slowly worsen. During November, the unemployment rate increased to a fifty-month high of 4.6 percent even though total payrolls rose by 64,000 from October to November. Overall, November’s report showed lackluster payroll growth fueled by rising numbers in part time employment.

Although the BLS is apparently back on track with its November report, following the partial federal shutdown, some key sections of the October report—especially from the household survey—have not been calculated or published. So, month-to-month comparisons are difficult for the October-November period. Instead, much of what I look at here will be comparisons between September and November, to allow for comparisons between the establishment survey and the payroll survey.

From September to November, establishment-survey employment decreased by 41,000 jobs, although total employed persons, measured via the household survey, rose by 96,000. (November totals below are the two-month change from September to November):

Since April 2029, though, neither household employment nor payrolls have changed much. For example, in April, the BLS reported total household employment at 163.9 million persons. In November, the total was only 163.7 million. Similarly, for total establishment-survey jobs, the total in April was 159.4 million jobs. The total in November had risen to only 159.5 million, rising only 119,000 jobs in seven months.

Meanwhile, the household survey in November showed a surge in part-time employment, suggesting that the jobs gains we do see are largely due to part time employment. For example, from September to November, full time employment fell by 983,000. That’s one of the largest drops we’ve ever seen outside a recession. Moreover, the total number of part-time positions surged by 1.03 million, one of the biggest gains recorded. (November totals below are the two-month change from September to November):

The total number of workers taking on part time work for economic reasons rose to the highest level since 2021, surging to 5.5 million workers.

Moreover, the total number of multiple jobholders (with primary and secondary jobs being both part time) rose to the highest level recorded in more than thirty years, rising to 2.5 million workers.

The total number of manufacturing jobs has now fallen for seven months in a row:

Meanwhile, temporary jobs moved deeper into negative territory (measured year over year.) This measure, when negative for three or more months in a row, has always coincided with a recession over the past 35 years.

One might say that the only real bright spot in this jobs report was the month-to-month increase in payroll employment. Yet, the report of the payroll gain from October to November comes out mere days after Fed Chairman Jerome Powell, at the December FOMC press conference, cautioned the public against putting much stock in the reported payrolls totals. According to Powell, employment is “cooling” even faster than the reported headline data in recent months suggests:

Unemployment is now up 3/10 from June through September. Payroll jobs averaging 40,000 per month since April. We think there’s an overstatement in these numbers by about 60,000. So that would be negative 20,000 per month. And, also, just to point out one other thing, surveys of households and businesses both showed declining supply and demand for workers, so I think you can say that the labor market has continued to cool gradually, maybe just a touch more gradually than we thought.

Naturally, it’s unclear if November’s count will require sizable revisions as have total job counts in other recent months, but as Powell noted, overall initial counts have been overly optimistic for months.

These disappointing jobs numbers are also reflected in private-sector employment statistics which have been the subject of more attention in recent months thanks to the federal shutdown. For example, the November report from ADP showed a 32,000 drop in private sector employment for the month. The situation for small employers was even worse, and the overall drop in the private sector was driven by falling employment in firms with fewer than 50 workers. Small businesses are more immediately sensitive to changes in economic conditions, and this may be a leading indicator of where the job market is heading.

The Rovelio Labs report on total employment, which includes government employment, showed an overall drop of 9,000 jobs in November, which according to the report authors was “predominantly driven by employment losses in the retail trade and manufacturing sectors.”

Although the Fed lacked employment data for October and November during its most recent FOMC policy meeting, the Fed was likely pushing its new policies while assuming more soft employment data. The latest data from the BLS further helps the Fed, politically speaking, in its efforts to justify further cuts to the target policy interest rate even though price inflation measures remain near three percent, and are not—as the Fed has repeatedly insisted—hurrying back to the stated two-percent inflation target.

Rather, it appears now that the Fed is still trying to engineer a “soft landing” with repeated cuts to the target policy rate, and rely on a softening of economic conditions to keep price inflation from spiraling back to 40-year highs like we saw in 2022. This might have already occurred were economic conditions more robust right now.

With such weak employment growth, however, weakening demand from workers puts downward pressure on prices, and gives the appearance that the Fed’s monetary policy is bringing price inflation under control.

Signs of increasingly weak demand are found in several places, although not in retail sales which continue to benefit from high-income spenders and from the continued use of consumer credit, including buy-now-pay-later services. For example, BNPL services have surged in recent years with the rise of apps like Afterpay and Klarna. This has helped prop up retail sales, and a November study from the Harvard Business Review states:

We found that BNPL adoption led to immediate and substantial increases in spending. Consumers who adopted BNPL were more likely to purchase, with purchase likelihood increasing from 17% to 26%. Furthermore, when adopting consumers made purchases, their basket sizes were 10% larger on average than they were before the introduction of BNPL. Remarkably, these increases in spending were not short-lived: They persisted for close to six months, showing that BNPL drives lasting gains rather than short-term spikes in consumer spending.

Who is most affected? Our analysis suggests that the impact of BNPL is greater for “financially constrained shoppers.”

BNPL is a substantial portion of overall spending. Although retailers reported record spending on the Black Friday-Cyber Monday period this year, over nine percent of that spending was financed by BNPL.

Consumers who use BNPL, however, tend to miss payments more often than consumers who use more traditional funds for consumer spending. This reflects an overall worsening in the credit situation which can been seen in rising delinquencies for credit cards and auto loans, especially among lower income consumers.

Other indicators that point to bad news for the job market include bankruptcies at a 15 year high, foreclosures up for the ninth straight month, and initial unemployment claims rising in early December by the largest total since 2021.

Demand will weaken as these trends continue, putting further downward pressure on price inflation. However, those workers who experience falling wages, or who become unemployed, will be unable to take advantage of deflation. Even though workers in a recession badly need deflation to regain some purchasing power for their increasingly scarce income, the central bank will intervene with easy money to keep price inflation positive in the name of “stimulus.” Politically, the Fed will use stagnation-induced deflation as political cover for the Fed to return to aggressive quantitative easing and even lower target interest rates. If employment reports continue to show growing economic stagnation, calls for more monetary inflation and government spending will only grow.

Rent growth has slowed in Colorado Springs over the past two years

noreply@blogger.com (Unknown) — Sat, 01 Feb 2020 19:48:00 +0000

For the first time in years, I updated the Colorado Springs vacancy and rent graphs.

First, let's look at the vacancy rate for the region. During the third quarter of 2019, the Colorado Springs vacancy rate fell to 5.0 percent. That's down from 5.4 percent during the second quarter, and it was down from 5.2 percent as recorded during the third quarter of 2018, one year earlier.

2019's third quarter rate was the lowest vacancy rate recorded since the third quarter of 2016, when the rate was 4.0 percent.

This suggests vacancies are in a downward trend at the moment, but there rate isn't exactly at historical lows. Five percent suggests mostly full units, but I wouldn't describe it as an especially "tight" market.

Not surprisingly, though, this decline in vacancy in the last two years has come with rent growth — but not a lot of rent growth.

From the third quarter of 2017 to the third quarter of 2019, the average rent grew 8.6 percent (or 98 dollars) from $1,113 to $1,231.

This is an average, so is skewed upward by new construction. As noted in October in the Gazette:

Most Colorado Springs-area apartment projects built in recent years have been upscale, amenity-filled communities that command top dollar for rents, said Laura Nelson, the Apartment Association’s executive director.

“The only supply we’re adding is high end,” she said. “So when you add high-end units, then it pulls your average up. That doesn’t necessarily mean than everything is going up that high. But when that’s all that you’re adding in, it throws off the average.”

Though several apartment projects have been built in recent years, the overall supply might not be keeping up with demand.

In the third quarter, only about 2,600 of the area’s supply of 51,142 apartments were available for rent — a 5 percent vacancy rate that was the lowest in three years, the Housing Division and Apartment Association report shows.

Nearly 750 units have been added to the area’s supply in the first three quarters of the year, which is about the same number as during the same period in 2018, according to the report. Even so, an additional 1,178 apartments have been occupied since the start of the year.

If we looked at growth in median rent, the increased would like be smaller, since median numbers are less skewed by new product. I don't have the median numbers yet for the third quarter, but the growth in median rent from the third quarter of 2017 to the second quarter of 2019 actually went down by 10.9 percent. This may have been driven by declines in rents in older and less desirable units.

Year-over-year growth in average rent has slowed over the past two years compared to 2016-2017 when YOY growth frequently topped ten percent.

New Mesa County Foreclosures Hit 12-Year Low in December

noreply@blogger.com (Unknown) — Fri, 31 Jan 2020 21:16:00 +0000

Last time, we saw that "releases of deeds of trust" spiked in Mesa County. That suggests some strong demand for for-sale housing in the GJ metro area.

So, not surprisingly, we also find that foreclosures in the area fell to a 12-year low in the area. In fact, these numbers may be lower than anything we've seen in much more than 12 years, but I only have data going back to 2008. In other words, there were fewer new foreclosures in December 2019 than in any other month during which I collected this data.

Specifically, during December, there were 11 notices of election and demand. The "NED filing" is the first step in the foreclosure process. That's down from 17 in November 2011, and it's down from December 2018 when 19 NEDs were filed. As the blue line shows below, the NED filings total is even down from where it was in 2008.

The other measure of foreclosure activity "auction sales" has not dropped off quite as much. The "sale" step of the process is the end of the foreclosure process when the property is auctioned off to a new owner.

During December, a total of five properties were foreclosed and sold at auction. That's a low number, but not the lowest we've seen over the past 12 years. Sales totals have been largely flat over the past year, and have returned to what we saw back in early 2008. Nonetheless, foreclosure auction sales can be said to be at historic lows.

This follows a general statewide trend. Most Colorado counties have seen big decreases in foreclosure activity with combined statewide totals also dipping near 12-year lows.

Moreover, keep in mind the population of both Mesa County and the state have increased over the past decade, so on a per capita basis, foreclosure activity has fallen well below where they were before 2008.

Releases of deeds of trust surge in Mesa County

noreply@blogger.com (Unknown) — Fri, 31 Jan 2020 21:01:00 +0000

A release of a deed of trust is an event that occurs when a deed of trust (often referred to as a mortgage) is paid off, either through refinance, sale, or when all payments have been completed on a home loan. It is a "positive" economic indicator in sense that areas with improving economies tend to generally also report increases in releases of deeds of trust.

Other factors can be important as well. In cases where there is a housing shortage, but other economic indicators are robust, we might also see declining release activity. It's not always easy to know which factors are the key factors in whether or not releases are going up or down.

We do know, though, that releases tend to go up when interest rates fall. And releases tend to go down when interest rates rise. We've seen this in the combined release data for the state's biggest countries.

Combining the state's big metro counties (plus Broomfield County) we saw that releases headed down in late 2018 as the Federal Reserve began to allow the fed funds rate to rise. The mortgage rate then followed suit, and releases trended downward. During 2019, however, the Fed began to push rates down again, and releases rose again at the same time:

So far, I only have the data for the combined metros through October.

An odd thing happened in Mesa County during December, though. According to the Mesa County public trustee's latest data, releases spiked to the highest level I've seen since I began keeping track of releases back in 2008.

Releases have generally been hovering between 600 and 800 per month in the county over the past two years. But in December, the total shot up to 1,253. That's a huge increase. For instance, in December 2018, the total number of releases was 569:

Based on what I have so far for the other metro counties, many counties are experiencing sizable increases — but this increases appears to be significantly larger than the other counties. I spoke with the Mesa County PT and confirmed this is correct data, and it is not due to an administrative backlog or an artifact of processing. It does appear to be a result of real events in the local economy. It appears many homeowners in Grand Junction had the opportunity to refinance in December, and many took it.

We'll know more at the end of January if this is a trend, or if just a quick spike that will soon return to normal. But in either case, the surge in releases suggest confidence in the local housing market on the part of lenders and investors in the secondary market. It may also suggest lenders anticipate the Fed will continue to take a dovish view on inflation and interest rates.

Colorado Gets More than Half of Its Revenue from Income Tax

noreply@blogger.com (Unknown) — Thu, 01 Aug 2019 18:38:00 +0000

Pew breaks it down. I was surprised by how little revenue is generated from severance taxes. And, of course, there is no statewide property tax thanks to TABOR.

In March, 'release of deeds of trust' down 23 percent

noreply@blogger.com (Unknown) — Mon, 21 May 2018 15:56:00 +0000

A release of a deed of trust is an event that occurs when a deed of trust (often referred to as a mortgage) is paid off, either through refinance, sale, or when all payments have been completed on a home loan. It is a "positive" economic indicator in sense that areas with improving economies tend to generally also report increases in releases of deeds of trust.

Other factors can be important as well. In cases where there is a housing shortage, but other economic indicators are robust, we might also see declining release activity. It's not always easy to know which factors are the key factors in whether or not releases are going up or down.

Since early 2017, the general trend in release activity has been downward. In March 2018, releases totaled 21,304. That's up 11 percent from February 2018, when releases totaled 19,095. Overall, however, monthly data shows that monthly release totals have fallen repeatedly since December 2016's peak of 33,943:

Looking at annual totals, we find that 2017's total was down from 302,249, dropping to 297,151. That's still above 2015's total, however, and well above 2014's totals.

The trend in year-over-year changes has also shown a decline. Over the past nine months, releases have been down every month, when compared to the same month a year earlier. In March 2018, releases were down 23 percent, compared to March of 2017 — when releases totaled 27,798.

Another factor at work may be rising interest rates. Since re-finance activity is a factor in releases, and since re-fi's often slow as rates increase, we may be seeing slowing release activity as a result of significant increases in mortgage rates over the past year. Mortgage rates are now the highest they've been since 2013:

For more on historical release activity in Colorado, see here.

Foreclosures in Colorado's Metro Counties Remain Near Multi-Year Lows

noreply@blogger.com (Unknown) — Sat, 19 May 2018 20:05:00 +0000

Foreclosure activity in Colorado metropolitan counties continues to be near multi-year lows. Over the past two years, foreclosure rates have been exceptionally low compared to the previous decade.

March 2018 foreclosure filings were down 20 percent from March 2017, dropping from 540 to 432, year over year.

March 2018 foreclosure sales (completed foreclosures) were down compared to March 2017 with a decrease of 33.9 percent, dropping from 177 to 117, year over year.

Filings rose 6.1 percent from February 2018 to March 2018, and auction sales were up 19.4 percent over the same period.

For the first three months of 2018 as a whole, foreclosure filings were down 11.8 percent, compared to the same period of last year. Filings fell from 1,429 for the first three months of 2017 to 1,260 during the same period of 2018. Foreclosure sales were also down during the same period: sales fell 24.9 percent from 450 to 338.

Pueblo County reported the highest foreclosure rate during March, while Boulder County reported the lowest rate.

Comparing the first three months of this year to the first three months of last year, both filings and sales were down:

Filings for Jan-Mar:

Sales for Jan-Mar:

There's not a whole lot to say here except that foreclosure rates are low, and currently show no signs of heading back upward. So long as home prices continue to climb quickly upward, even those homeowners who have troubles with income can always just sell their homes in order to avoid foreclosure.

Housing: High Prices, Few New Units

noreply@blogger.com (Unknown) — Mon, 14 May 2018 17:07:00 +0000

(Adapted from an article published at Mises.org.)

During the housing bubble that ended in 2007-8, the amount of new housing construction was remarkable. Enormous subdivisions were being constructed in metro areas across the land. Buildings of condominiums sprang up in city centers, and the ready availability of credit meant many were buying more than one house as "investments" or summer homes. New housing, it seemed, was everywhere.

At the same time, home prices were increasing, driven up in part by fact that everyone was convinced that housing prices always go up, and real estate — any real estate — was a rock solid investment.

When the bubble popped, there was suddenly a housing glut. From Las Vegas to Florida, we heard about buildings of condos that were more than half empty, and about suburban housing developments that became ghost towns.

On the most superficial level, the current boom might remind some of the pre-2008 bubble. Housing prices are climbing fast, and in many areas, there are bidding wars for houses that are quite ordinary.

This time, though, things are different. This time, there isn't nearly as much housing being built was during the last bubble. There may be a bubble in prices this time, but there does not appear to be a bubble in construction.

A look at housing starts in recent years shows that in raw numbers, starts are still not even close to getting back to where they were during the last boom:

Now, some might think "it's good we not going back to bubble levels." True enough. But when we take into account growth in new households, we see that current construction trends are even weaker than the graph above suggests, and are below even more commonly-seen non-bubble levels of construction.

As both the Wall Street Journal and USA Today noticed last month, the amount of new housing construction taking place right now, as a proportion of existing households, is at historic lows. USA Today reports:

Since the real estate market crash took the wind out of the construction boom of the 2000s, fewer homes are being built per U.S. household than at nearly any time in history.

And the Wall Street Journal concludes:

Home construction per household a decade after the bust remains near the lowest level in 60 years of record-keeping...What makes the slump puzzling is that by most other measures, the American economy is booming. Jobs are plentiful, wages are on the rise and the stock market is near record highs. Millennials, the largest generation since the baby boomers, are aging into home ownership.

When we look at new housing construction compared to total households going back to 1959, we find that 2009 and 2010 were years with the smallest amount of new construction in decades:

Only the early 90s are comparable to what happened in the wake of the 2008 financial crisis.

Moreover, since 2010, new construction has rebounded remarkably little.

Last year, the Kansas City Fed produced a similar analysis, and the results were pretty much the same: new housing construction, taking household growth into account, now remains near a multi-decade low.

But why has this happened? The Fed Report considers a number of options, including:

One reason is that builders in many metropolitan areas are facing a shortage of qualified construction workers. In addition, smaller builders, which account for the majority of single-family development in some mid-sized metropolitan areas, are having trouble financing land purchases and construction....A third explanation is the limited availability of undeveloped land in desired locations.

Some of these factors were due to accidents of history. Many of the Mexican immigrants who worked in construction in the US in the decade following the 1994 Mexican financial crisis now are less interested in working in the US thanks to improvements in the Mexican economy. Since 2009, net migration from Mexico has fallen below zero. Some of those leaving took their homebuilding skills with them.

Meanwhile, finding inexpensive financing for land acquisition and construction has been difficult as money has been siphoned off to other forms of bubble investment as central-bank produced asset inflation continues.

While real estate is certainly affected by expansive monetary policy, bubbles inflate in unpredictable ways. During the last bubble, investors grew enamored with housing, and money flowed accordingly. But nowadays, as Brendan Brown has often noted, other investment "narratives" have directed many investors' attention elsewhere. It's no longer assumed that housing prices will always go up. Meanwhile, lumber costs, labor costs, and regulatory costs at the local level continue to push up production costs. Since the advent of Dodd-Frank, small banks have been more often squeezed out by a handful of huge banks. As small banks disappear, so does access to financing for many smaller builders in smaller markets.

Taking all of these things together, the supply of housing is not recovering to more historically normal levels.

This doesn't mean demand for housing has gone away, of course. Population growth has not contracted like housing construction has. Vacancy rates are down and housing prices in both rental housing and in single-family housing continues to head upward.

And this lackluster production is all happening during a period of expansion. Presumably, it should be easy to find financing to build housing right now, and to find buyers who can pay a price that will cover expenses for homebuilders. That doesn't seem to be happening.

Unemployment Rates in Colorado Near What They Were During the Late-90s Boom

noreply@blogger.com (Unknown) — Thu, 10 May 2018 18:14:00 +0000

According to the most recent monthly data from the Bureau of Labor Statistics, the unemployment rate in Colorado in March 2018 fell to 2.9 percent, down from 3.3 percent in February. March's rate was up slightly from March 2017's rate of 2.8 percent.

This continues a nine-year trend, beginning in 2010, in which unemployment rates in general have been falling in Colorado, and in its metro areas.

It also continues a trend in which Colorado's unemployment rate has been lower than the national rate. Since May of 2013, Colorado has had a lower unemployment rate than the US overall in every month. In March 2018, the nationwide unemployment rate was 4.1 percent.

Through Colorado Metro areas, similar trends of declining unemployment have existed in recent years. Although rates have inched up slightly since mid-2017, unemployment rates nevertheless remain quite low.

In March, Colorado's metro areas had the following unemployment rates:

US	4.1
Colorado	2.9
Ft Collins	2.5
Denver-Aur	2.8
Greeley	2.7
GJ	4.0
Colo Spr	3.4
Pueblo	4.4
Boulder	2.5

Graphed monthly, the metros compare like this:

To add a bit more clarity, though, I've graphed the rates at 3-year intervals for each metro area, for March of each year:

We find that Boulder tends to consistently have the lowest unemployment rate in the state. Grand Junction and Pueblo, on the other hand, tend to have the highest rates. Overall, though, rates statewide are near where they were in 2000 before the dot-com bust, and during the very large economic expansion of the late 1990s and early 2000s in Colorado.

There are signs that the economy in Colorado is cooling down, but at this time, there are not signs of large changes in current employment trends.

According to the Fed's Other Inflation Measure, Inflation's at an 11-year High

noreply@blogger.com (Unknown) — Mon, 23 Apr 2018 20:00:00 +0000

According to the Federal Reserve's Underlying Inflation Gauge, the 12-month inflation growth in March was at 3.13 percent. That's the highest rate recorded in 140 months, or nearly 12 years. The last time the UIG measure was as high was in July 2006, when it was at 3.2 percent.

The Fed began publicly reporting on new measure in December of last year, and takes into account a broader measure of inflation than the more-often used CPI measure.

Not shockingly, the UIG has shown a higher rate of inflation than the CPI, most of the time in recent years. Moreover, this gap between UIG and CPI appears to be growing.The gap is simply calculated by substracting the CPI YOY growth rate from UIG YOY growth rate. A negative value means the CPI was higher than the UIG in that period.

In March, while the UIG was 3.13 percent, the CPI growth rate was 2.4 percent. This was a 13-month high for the CPI.

The use of consumer prices only in the CPI has long been a problem, in that the cost of living and planning for the future does not involve only the basket of goods used in the CPI calculations. A wide variety of assets affect the American economy as well.
As explained by the New York Fed's summary of the UIG measure:

We use data from the following two broad categories: (1) consumer, producer, and import prices for goods and services and (2) nonprice variables such as labor market measures, money aggregates, producer surveys, and financial variables (short- and long-term government interest rates, corporate and high-yield bonds, consumer credit volumes and real estate loans, stocks, and commodity prices).

But don't expect the Fed to abandon its fondness for the CPI and the "2-percent inflation" goal any time soon. Today, the president of the Federal Reserve Bank of Chicago, Charles Evans, reiterated that the Fed is holding to its 2-percent inflation goal - and they're not talking about using the UIG measure.

Areas Where Colorado's Economy Has Diversified

noreply@blogger.com (Unknown) — Mon, 12 Feb 2018 22:38:00 +0000

La Voz last month outlined some of the ways Colorado's economy has diversified in recent decades. Noting that the the state's historical dependence on natural resource extraction has made the local economy prone to booms and busts, La Voz looks at a few areas where the state has moved away from having a limited economy:

Outdoor Recreation
Tourism
Cannabis
Renewable Energy

To be sure, the first three on the list are connected to tourism overall, although there's nothing wrong with people traveling to Colorado — especially if the reasons are far more diverse than just "skiing."

La Voz sums it up:

Colorado’s dependence on the extraction industries for its economic well-being has put long-time residents through a historical roller coaster ride of boom and bust cycles. Those days may finally be behind the state with low unemployment rates, some of the fastest growing companies in the country and a diversified set of industries drawn to the state. Now the state’s largest employers are from the Aviation, Healthcare, Telecommunications and Financial Services industries. The new mix of companies has provided sustained growth and an economic engine that keeps Colorado near the top of the class.

New Mexico Never Really Recovered from the Great Recession

noreply@blogger.com (Unknown) — Mon, 12 Feb 2018 22:30:00 +0000

The Santa Fe New Mexican recently posted an informative article on the New Mexico economy, which has never really gotten back to where it was before the Great Recession of 2008-2009 — at least not in terms of employment.

When it comes to New Mexico’s economy, 2006 seems like a lifetime ago.
Job growth that year was its fastest in more than a decade. The unemployment rate dropped to 3.6 percent. The price of oil was at record levels. State government was awash with cash.

Then, with stunning speed, came the Great Recession in December 2007, and New Mexico still hasn’t recovered. In a state where the economy is based in large part on government dollars, it’s government numbers that paint the picture. The state’s jobless rate was 6 percent in December 2017, according to preliminary estimates. Alaska is the only state doing worse.

The nation’s rate was 4.1 percent, a 17-year low. Of New Mexico’s 33 counties, all but tiny Mora County have higher unemployment rates than they did before the recession. The state hasn’t yet gotten back the more than 50,000 jobs it lost during the recession, making New Mexico one of only a few states that have yet to recover their jobs.

Read the full article.

Foreclosure Sales Hit All-Time Low in September

noreply@blogger.com (Unknown) — Sun, 26 Nov 2017 00:26:00 +0000

Foreclosure sales in Colorado's metropolitan counties fell to a total of 95 in September, coming in at the lowest total ever recorded since this survey was begun in 2007. During the same period, there were 415 foreclosure filings.

This continues a multi-year trend of declining foreclosure activity, as we can see in the graph. September's foreclosure sales total was the lowest ever recorded with the next smallest being June's total of 106.

Foreclosure filings, meanwhile, we up slightly from all-time high's but remained near the lowest levels we've seen in the last decade. An all-time low was reached in July of this year when foreclosure filings totals dropped to 394.

These figures are totals for Colorado's 11 most-populous counties, plus Broomfield County. Foreclosure filings are the event that begins the foreclosure process, and foreclosure sales occur at the end of the process when properties are sold at auction, often going to the lender.

In the second graph, we see year-over-year changes in total foreclosure filings and sales. In September 2017, filings were down slightly from September 2016, dropping by 5.25 percent. Foreclosure sales dropped by much more, falling 38.8 percent year over year. As we can see in the graph, both filings and sales have been dropping each month for the past 10 months, and the overall trend for both filings and sales has clearly been downward since 2012.

Many counties differ in their foreclosure trends, and the number of foreclosure compared to the overall number of households can vary considerably.

If we look at foreclosure filings in each county on a per household basis, we find that Pueblo County has the fewest households per foreclosure — only 394 households per foreclosure — while Larimer County has the most — 2,771 households per foreclosure. Note that a larger number means fewer foreclosures in relation to population size. In other words, the larger the number of households per foreclosure, the lower the "foreclosure rate."

Also note that the counties with the lowest foreclosure rate tend to be higher-income counties such as Boulder and Douglas counties. Pueblo, Mesa, and Adams counties, on the other hand — which have higher foreclosure rates — have lower overall income levels.

A similar trend holds when we make the same comparisons using foreclosure sales. Pueblo has the fewest households per foreclosure sale (2,723) while Broomfield County reported no foreclosure sales at all.

Some counties are certainly more foreclosure-free than others. But, even those counties that have some of the highest foreclosure rates, relatively speaking, are still way down in their foreclosure totals from what we were seeing back in 2009 and 2010. Foreclosure activity continues to be at very low levels across all metro areas for now.

(This data is collected from the Public Trustee in each county.)

Colorado Homicide Rate Up in 2016

noreply@blogger.com (Unknown) — Fri, 17 Nov 2017 16:35:00 +0000

According to the FBI's annual crime report, released in September, Colorado's homicide rate increased to 3.7 per 100,000 in 2016. That's up from 2015's rate of 3.2 per 100,000, and from the 50-year low of 2.6 recorded in 2010.

2016's rate was a 12-year high, but still remained well below the homicide rates that were common during the 1970s and 1980s:

Compared to the nationwide homicide rate, the Colorado rate has been lower every year since 1963. The nationwide homicide rate in 2016 was 5.2 per 100,000.

Since the 1990s, the US homicide rate has been nearly cut in half, and the US rate hit a 52-year low in 2014 when it fell to 4.4 per 100,000.

Compared to other US states and Canadian provinces, Colorado's homicide rate places it as one of the lowest-homicide rates in in the US, and puts it on a par with central-Canadian provinces like Alberta and Manitoba:

As a map:

Within the state of Colorado, metro areas can differ significantly. Over the past decade, the metro area with the highest homicide rate has in most years been Pueblo (no Pueblo data is available for 2008). In 2016, Colorado metro areas reported the following homicide rates, per 100,000:

Pueblo: 6.7
Grand Junction: 6
Colorado Springs: 4.5
Denver: 4.3
Fort Collins: 2.6
Greeley: 1.4

By this measure, Fort Collins and Greeley are among the safest places in the world. Grand Junction's homicide rate spiked in 2016, but with such a small overall population, it's impossible to say if this change reflects any real trend in the region.

These numbers, however, are by full metro areas. If we look within a single metro area, such as the Denver Metro Area, we'll find significant differences there as well. For example, the City and County of Denver is the primary driver of homicide rates in the area. In 2016, there were 57 homicides in the City and County of Denver, and 22 in the City of Aurora. In the metro area as a whole, however, there were 124 homicides total. Thus, Denver and Aurora alone accounted for nearly two-thirds (63 percent) of all homicides in the metro area. This is in spite of the fact that those two cities make up only 37 percent of the total population of the metro area.

Case-Shiller: Denver home prices growth falls to 35-month low

noreply@blogger.com (Unknown) — Thu, 16 Nov 2017 15:11:00 +0000

According to the latest Case-Shiller report, home prices have been moderating throughout the year, with August's report showing a 7.2 increase over August of 2016. This was the smallest rate of increase found in 35 months, or since October of 2014.

August's growth rate is down from the November 2015 peak of 10.9 percent.

Meanwhile, home price growth in the 20-city index has been largely flat, but slightly growing over the past year — although overall growth is below that found in Denver metro. In august, the 20-city index grow rate was 5.9 percent, which is a six-month high.

While overall growth is outpacing the 20-city sample, we can also see that Denver's index value is now well above where it was during the last peak home-price period of 2006.

The index for metro Denver had peaked at 140 back in August 2006. But now, the index value is 201, up 43 percent from 2006.

The 20-city index, meanwhile, is not even back to its former peak, and is now still down 1.7 percent from where it peaked during August of 2006.

Clearly, home price growth in Denver metro is strong, even when compared to a variety of other large cities throughout the US. This is partly fueled by job growth in general, and specifically by job growth in the energy sector.

Moderation in price growth, however, also reflects a similar moderation in job growth that metro Denver is now experiencing.

Releases of deeds of trust in metros fall to 32-month low

noreply@blogger.com (Unknown) — Wed, 15 Nov 2017 01:03:00 +0000

A deed of trust is "released" when a home loan is paid off. This event is recorded by the public trustee in each county in Colorado.

Trends in public trustees tell us about how much activity there is in terms of home loan refinances and home sales. In many ways, activity in releases of deeds of trust are an indicator of demand for real estate purchases in Colorado, and historically, we have seen more release activity during times of economic boom.

Activity Through September of This Year

In September 2017, we found that releases had fallen to a 32-month low in the 11 largest counties in Colorado, plus Broomfield County. These counties include more than 90 percent of the population of Colorado.

In September, releases totaled 20,730. That's the lowest total since February 2015 when releases totaled 18,826. September 2017's total up down from the same month a year earlier, falling 26.6 percent from September 2016's total of 28,252.

Looking at counties, individually, we find that year-over-year, the counties with the largest drops were Douglas, Broomfield, and Denver counties. There were no counties that reported increases during this period.

Although September's total is clearly down significantly from December 2016's peak, overall activity continues to be generally robust as demand for housing and homes for purchase remains strong. Although the Federal reserve acted to allow the Federal Funds rate to rise slightly over the past two years, mortgage rates spikes in late 2016, but fell throughout much of 2017. Without a sustained increase in mortgage rates, we're likely to continue to see relatively strong numbers for releases of deeds of trust. At least, this will be the case until there is a general worsening of the labor market and economy overall.

So, for now, release activity is moderating, but compared to most years since 2008, activity is relatively strong. This reflects ongoing interest in real estate purchases and in refi activity in Colorado.

Suicides drop in Summit County — Is Altitude a Factor in Suicide Rates?

noreply@blogger.com (Unknown) — Fri, 10 Nov 2017 20:15:00 +0000

Summit Daily reports that suicides in the mountain county are on the decline this year after a spike upward last year:

Four people have died of suicide this year in Summit County, a sobering statistic but still a welcome improvement from the double-digit numbers that have marked past years. If the trend continues, 2017 could have the lowest number of suicide deaths in a decade.The major reduction comes on the heels of a concerted push by advocacy groups and local officials to combat mental illness and break down barriers to care. And while it's difficult to draw a causal link with such a small sample size, the numbers indicate Summit is moving in the right direction.

"I would say one suicide is too many, but any reduction in the number feels like a win," assistant Summit County manager and former Summit Community Care Clinic CEO Sarah Vaine said.

There were 13 suicide deaths in 2016, the highest number on record, eight in 2015 and 10 in 2014. The most recent year with fewer than four deaths was 2007, according to coroner's office statistics.

This is good news to be sure, although when dealing with such a small population, huge swings can occur in events like suicides, without it indicating any sort of established trend. It may be that last year was the anomaly, and that there was never any growing trend of suicides to begin with. We'll need more time to know.

Given that Summit County is a high-altitude county, this discussion is an interesting reminder that high altitude has been connected to suicides in at least one study. Writing in the journal High Altitude Medicine and Biology in 2011, Barry Brenner, David Cheng, Sunday Clark, and Carlos A. Camargo, Jr. concluded there really is a correlation:

Recent preliminary studies have reported a positive correlation between mean altitude and the suicide rate of the 48 contiguous U.S.states. Because intrastate altitude may have large variation, we examined all 2584 U.S. counties to evaluate whether an independent relationship between altitude and suicide exists. We hypothesized that counties at higher elevation would have higher suicide rates. This retrospective study examines 20 yr of county-specific mortality data from 1979 to 1998...

Controlling for percent of age >50 yr, percent male, percent white, median household income, and population density of each county, the higher-altitude counties had significantly higher suicide rates than the lower-altitude counties. Similar findings were observed for both firearm-related suicides (59% of suicides) and nonfirearm-related suicides. We conclude that altitude may be a novel risk factor for suicide in the contiguous United States.

In recent numbers for the state of Colorado overall (February 2017), Denver showed up with the lowest suicide rate among counties at 13.9, while mountain counties had some of the highest rates, including Gilpin (37.8), Clear Creek (37.8), Park (37.8) and Teller (37.8) counties. Among large counties, Pueblo county had the highest rate at 28.5. (All rates are total suicides per 100,000 people.)

Unfortunately, since these are such small counties, population-wise, the statewide report notes "there is no significant statistical difference between the rate for this region and all other regions with the exception of Denver County."

Even if there is a clear correlation here, the implications for public policy are few, except that local healthcare workers ought to be aware of risk factors. The possible correlation here is interesting, nonetheless, and possibly of use when other alleged causes of suicide are put forward.

Releases of deeds of trust in Colorado metros fall to 12-month low in June

noreply@blogger.com (Unknown) — Fri, 03 Nov 2017 00:07:00 +0000

A deed of trust is "released" when a home loan is paid off. This event is recorded by the public trustee in each county in Colorado.

Activity Through June of This Year

In June 2017, we found that releases had fallen to a 12-month low in the 11 largest counties in Colorado, plus Broomfield County. These counties include more than 90 percent of the population of Colorado.

In June, releases totaled 23,422. That's the lowest total since June 2016 when releases totaled 23,265. June 2017's total up down slightly from the same month a year earlier, rising 0.7 percent from June 2016's total of 23,265.

Looking at counties, individually, we find that year-over-year, the counties with the largest drops were Adams, Broomfield, and Boulder counties. The largest increases were found in Weld and Denver counties.

Although June's total is clearly down significantly from December 2016's peak, overall activity continues to be generally robust as demand for housing and homes for purchase remains strong. Thanks to low interest rates and rising home prices, it remains relatively easy to obtain refinances for current mortgages, and home continue to sell quickly, with the possible exception of high-end homes.

All of these factors continue to put upward pressure on release activity.

Housing permits in Metro Denver up 18 percent in 2016

noreply@blogger.com (Unknown) — Fri, 03 Mar 2017 04:00:00 +0000

Housing permits in the Denver metro area increased 18 percent from 2015 to 2016, rising from 1,462 to 1,732 permits. As we can see in the first graph, this brings total permit activity back to levels similar to those found in 2004 and 2005, and well above what we saw during the recessionary period of 2008 and 2009:

As demand for both apartments and for-sale housing grew after 2009, we saw gradual increases in permit activity, and the permit total is now at a 14-year high. Permit totals have not been this high since 2002 when they reached 1,770.

The composition of the permit total is very different today from what it was prior to 2007, however. As we see in the next graph, prior to 2007, the total number of single-family permits greatly outnumbered the number of multifamily permits. Since 2011, single-family and multifamily permits have been rather similar, with multifamily permits even exceeding single-family permits in 2012 and 2013.

We can contrast this to the situation before 2007 when the very large numbers of new single-family permits from 1998 to 2005 were a factor in what became sizable declines in home prices from 2008 to 2010 that only made a quick turnaround on the back of massive federal monetary and fiscal stimulus in the wake of the 2008 financial crisis. Since then, the single-family market has remained well below its former peaks even though population growth continues as a sizable rate in Colorado.

Much of this single-family activity has now been replaced by multifamily production. In fact, over the past five years, nearly half of new permits have been for multifamily housing, which is highly unusual:

Moreover, we see this show up in the homeownership numbers in Colorado. due in part to the boom in apartment building that has taken place since 2012, homeownership has gone into decline over the past decade.

While homebuilders were quickly adding new supply, we saw the homeownership rate sit as historic highs above 70 percent. .

Now, the housing focus has shifted more in the direction of multifamily, but overall permitting has rebounded to 80 percent of where it was at the 2001 peak. Nevertheless, continuing growth in both home prices and rents suggests that there is still room for more housing production.

Foreclosures in Colorado's metro counties fell 6.9 percent from 2015 to 2016.

noreply@blogger.com (Unknown) — Fri, 03 Mar 2017 00:41:00 +0000

Foreclosure activity continued to fall in 2016 in Colorado's 12 metropolitan counties. In Colorado's 11 most populous counties plus Broomfield County, new foreclosure filings were down 6.9 percent while foreclosure sales at auction — the point at which the foreclosing property is auctioned off to the bank or other buyer — were down 26.5 percent. The first chart shows all counties measured, and the year over year change from 2015 to 2016:

Except for Mesa and Denver counties, foreclosure filings fell in all counties. And, when it came to foreclosure sales at auction — the final and most serious phase of foreclosure — only Mesa county reported an increase from 2015 to 2016.

Annual foreclosure totals in these counties have fallen off significantly in recent years:

If we look at monthly totals, we see a similar trend — with foreclosure activity falling to some of the lowest levels we've seen since I began tracking monthly numbers in 2008. The first graph shows just how far totals have fallen since they peaked in 2008 and 2009. In December, we can see that new foreclosure filings ticked up slightly, while sales totals remained near all-time lows:

For all counties combined, filings were down in December 2016 by 17.4 percent, year over year, while sales at auction were down 29.2 percent.

Here are filings:

And here are sales totals:

Only Mesa and Broomfield Counties reported increases in filings (the Broomfield numbers were tiny overall), while only Adams, Boulder, and Pueblo counties reported increases in sales. In general however, it's safe to say that foreclosures in the state continue to be at at least ten-year lows.

As a final note, we can see which counties have the most or fewest foreclosures in relation to the number of households overall. The following chart shows the foreclosure rate given as the number of foreclosure sales adjusted for the number of households in each county (based on 2015 household totals):

By this measure — in which a higher number indicates fewer foreclosures per person — we see that with zero foreclosure sales, Broomfield has the lowest rate, but Douglas County also shows a very foreclosure rate compared to other counties, with more than 57,000 households per foreclosure sale. Pueblo and Mesa counties — as has been the case for several years — show some of the highest foreclosure rates with Mesa showing just over 2,300 households per foreclosure sale.

Generally, higher income areas with more demand for real estate tend to show lower foreclosure rates while areas with lower incomes tend to have higher foreclosure rates.

This data is just the latest confirmation that demand for real estate in Colorado continues to be strong. In an environment such as we have today, even a household that goes into foreclosure can usually find a buyer before the property enters the foreclosure process. Thus, high demand for homes leads to few foreclosures, even as some households become delinquent on their loans.

Note on the data: all foreclosure numbers are collected from the public trustee in each county measured.

Rent growth in Metro Denver falls to 4-year low in 4th quarter of 2016

noreply@blogger.com (Unknown) — Thu, 02 Mar 2017 22:23:00 +0000

According to the latest data from the Apartment Association of Metro Denver, the average rent in Metro Denver during the fourth quarter of 2016 was $1,347, which was down from the third quarter average rent of $1,368.

The fourth quarter's average rent was up from the fourth quarter of 2015 with the average rent rising 4.2 percent from $1,292.

With a year-over-year increase of 4.2 percent, however, average rent came in at the smallest year-over-year increase since the first quarter of 2013, when the average rent grew 4.1 percent:

Rent growth has been falling for the past six quarters after reaching a record high of 13.2 percent during the second quarter of 2015.

The average rent has also fallen, quarter over quarter, for the past two quarters. After hitting $1,371 in the second quarter of this year, the average rent fell to $1,368 during the third quarter and then to $1,347 during the fourth quarter:

If we adjust for inflation, we see a similar trend, although we can note that in real terms, the average rent fell between 2001 and about 2011:

Flattening rents are likely a result of substantial increases in new housing construction that took place in metro Denver since 2012. In October 2016, for example, new housing permits reached the highest level recorded since 2001.

Not surprisingly, we also find that vacancy rates have increased as well. During the fourth quarter, the metro Denver' vacancy rate rose to 6.2 percent, which was up from the 3rd quarter rate of 5.1 percent. 2016's fourth quarter rate was down, however, from the vacancy one year earlier. The vacancy rate had surged to 6.8 percent during the fourth quarter of 2015, but fell again during the first quarter of 2016. Nevertheless, 2016's fourth-quarter rate of 6.1 percent is the second-highest vacancy rate recorded since 2010.

All of this points toward some stabilization in the market, although there is still little to indicate that we're entering a bearish market in multifamily housing, barring a sizable economic shock to employment or incomes.

Home-loan payoffs in Colorado increase in 2016 after fourth-quarter surge

noreply@blogger.com (Unknown) — Thu, 02 Mar 2017 17:42:00 +0000

In Colorado, a release of a deed of trust occurs when a real estate loan is paid off whether through refinance, sale of property, or because the owner has made the final payment on the loan. Increases in release activity occur as refinance and home-sale activity increases, and rising release totals generally indicate increases in the demand for home loans and real estate.

Every quarter, I monitor release activity in 21 counties based on population size and to ensure that as many regions of the state as possible are represented. More than 90 percent of all occupied households in Colorado are within the twenty-one counties chosen:

The number of home loans paid off in Colorado was up 14.4 percent from the fourth quarter of 2015 to the fourth quarter of 2016. Comparing the full year of 2016 to 2015, the total was up 2.8 percent.

Looking at all counties' measures, we find that during the fourth quarter of 2016, most areas reported increases in releases of deeds of trust:

Year over year, the largest increase was in La Plata County and the largest decline was in Alamosa County.

Taking the year as a whole, the changes were less dramatic:

Statewide, releases were up 2.8 percent for the year overall. Again, La Plata County showed the largest increase, but Eagle County, in this case, shows the largest decline.

The fourth quarter of 2016 showed a sizable surge in release activity as can be seen in the first graph:

For the fourth quarter of 2016, there were 93,147 releases, which makes the quarter the second-highest in releases since I began tracking the quarterly totals in 2008. During the fourth quarter of 2015, there were 81,398 releases. Over the past two years, there has been a sizable trend upward in release activity.

Although quarterly data only goes back to 2008, I do have annual data going back to 2000. Looking at annual data, we find that 2016 was not an especially remarkable year, in spite of the fourth quarter's surge:

Releases did hit a 3-year high in 2016, but this was comparable to what we saw in 2012 and 2013. Totals remain well below where they were in the run-up to the housing bubble in 2002, 2003, and 2004.

So where is release activity most concentrated? In raw numbers, we naturally expect the most activity in the most populous counties. However, when we adjust for the total number of households in each county, we find:

In this case, a small number means more release activity given the population size. So, the county with the most release activity per household is Summit County with only 6 households per release. The least-active county is Alamosa County with 48 households per release.

If we had to identify factors that lead to more release activity, we could likely point to median income and employment trends as factor, as well as overall demand for real estate in that area. There isn't a flawless correlation here, but counties like Douglas, Weld, and Jefferson continue to see fairly solid employment and income numbers while some counties at the bottom of the list — Pueblo and Alamosa Counties, for instance — tend to have lower incomes and/or less job growth.

And finally, it's always helpful to compare release activity against trends in mortgage rates. Since refinance activity is a large factor in release activity, we find that, historically, falling interest rates have tended to spur more release activity.

This appears to still be the case, and we can see that in the quarters following declines in the mortgage rate, we see increasing release activity:

There is a lag here, so the 4th Q's surge represents the result of the overall decline in mortgage rates that occurred through most of 2016. Note also how in the quarters immediately following the increases in the mortgage rate in 2013, releases fell to a multi-year low.

In late 2016, mortgage rates began to climb and remain above four percent during the first quarter of 2017. This is likely to lead to a leveling off in release activity, although this may not be apparent until after the first quarter this year. Moreover, a continuation of strong employment trends may mitigate interest-rate-based downward pressure on home sales and refi activity — and prevent sizable declines in release activity as well.

Note on sources: all release activity is collected from the public trustee in each state listed.

Snowpack is above average, but eastern Colorado experiencing drought conditions

noreply@blogger.com (Unknown) — Thu, 02 Mar 2017 00:12:00 +0000

You'd have to be no paying attention at all to not have noticed that California has experienced an amazing turnaround in its drought conditions.

According to the national drought monitor, as recently as November 2015, the California drought map looked like this:

Now, after months of well-above-average precipitation, the California drought map looks like this:

Colorado's turnaround was not so abrupt, and went from severe drought in 2013, then to virtually no drought at all in 2016. Here's 2013:

And here's May 2016:

Over the past several months, however, the Front Range has begun to see dry conditions again. Here's the current week:

This will lead to concerns over wildfire conditions, although fortunately, precipitation in the mountains has been high enough that water supply-concerns do not appear to be substantial at this time. If we look at recent data on snowpack, we find that while Colorado started out very slowly this season, it is now well above where we've seen it in recent years. The black line is 2017 and the red line is the average:

And, even the second-most pessimistic forecast shows total snowpack coming at at slightly above the median measure for the year:

The water supply is increasingly important in terms of residential use, although agriculture uses over 90 percent of the state's water while producing a mere one percent of the state's production and less than two percent of the state's jobs.