Foreclosures in Town?
Posted by CityBlogCO on May 28th, 2007
Can anyone speak to the issue of foreclosures in Denver, Colorado? Foreclosures are up around the country due to the sub-prime lending practices. Is there any foreclosure impact on real estate in Denver?
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Colorado has made headlines over the past six months as the reluctant recipient of the dubious honor of being the nation’s foreclosure capital.
According to RealtyTrac, one out of every 33 properties in Colorado is in foreclosure for a total of 54,747 foreclosures in 2006.
However, a study conducted by the Colorado Division of Housing, which inventoried about 95% of the state’s foreclosures found the number of foreclosures to be about half that, for a total of 28,435 foreclosures, translating to one out of every 58 homes.
That’s a BIG difference!
Of course, RealtyTrac is in the business of selling foreclosure data, so the attention grabbing headlines that the company spews forth in every major US city (and that the mainstream media readily laps up and parrots) certainly don’t hurt sales for RealtyTrac, or the newspapers for that matter.
All that said, whether it’s 1 out of 33, or 1 out of 58, there is no question that foreclosures are up in Colorado and many home owners are in a bad spot.
However, the entire state’s real estate market is far from imploding.
Good luck trying to score a “foreclosure deal” in Bonnie Brae, Polo Club, or Cherry Creek Country Club where tightening inventories, multiple offers, and selling for more than list price are coming back into vogue as we move into the Spring market.
Foreclosures in Colorado tend to be concentrated in a few pockets where new construction “starter” homes dominate the inventory, such as Adams and Weld Counties.
One other important factor that RealtyTrac fails to mention when comparing foreclosure rates: the foreclosure process in each state varies dramatically.
Foreclosing on a house in Colorado is much different than foreclosing on a home in Texas. As a result, comparing one state’s foreclosure rate against another state may be relevant, or it may completely false and misleading.
Comparing the rate of Colorado in one year to the rate in another year is much more informative. According the Division of Housing study, Colorado foreclosures are up 31% in 2006 over 2005.
As a real estate investor or a home buyer, be sure you look at the specific market data and conditions for the exact area in which you have an interest. A full time, local REALTOR who lives and breathes the market on a daily basis is certainly not a bad place to start if you want insight into what is really happening down on the street. These folks know where the real deals are, and they may or may not be foreclosure properties.