Since this market hadn't seen any noticeable appreciation in the past 4 years, it wasn't even on my bubble bursting radar - like Phoenix, Miami, San Diego, etc.
But like Detroit, it doesn't take crazy bubble prices to burst a market. It's just supply and demand. And in the Denver area, there's way too much supply, going up daily, and shrinking demand as new buyers worry about depreciation and stay put. That's the perfect storm that will now crash Colorado home prices. No matter what your incompetent corrupt Colorado realtor tells you.
Rising foreclosures are driving the supply of unsold homes in the Denver area to near-record levels, experts agreed on Thursday.
There were 27,309 unsold previously owned homes on the market in March, nearly 18 percent more than the 23,214 unsold homes a year earlier, and 5.7 percent more than the 25,848 in February, according to reports released on Thursday.
The reports, based on Metrolist Inc. data, were released by independent broker Gary Bauer and Steve McGuire of RE/MAX Professionals.
"And then it (the record) likely will be broken again in May and again in June," he said, because that is when more homes historically hit the market.
Kelly Posiviata, a broker with K P Properties, Metro Brokers of Arvada, agreed that the glut of homes is being exacerbated by foreclosures hitting the market.
"A lot more (foreclosed) homes came on the market at the end of February and the first part of March, and I think that this nonstop flood of foreclosures is just pushing up the unsold inventory," Posiviata said.
April 10, 2006
Even more bad news from Colorado: Glut of unsold homes, rising foreclosures - the "perfect storm"
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8 comments:
Colorado is one of only two states that doesn't license mortgage brokers. It isn't the modest housing appreciation that's going to save it even though there are no end of optimists who will gladly tell you its different there. My favorite CO optimist:
http://boulderrealty.blogspot.com/
Decent, and honestly upbeat with credible data give it a try.
That article from the Rocky Mountain News was pretty good. I haven't dug through the Metrolist data myself (my market is primarily Boulder), but clearly there is a growing glut of foreclosures and rising inventory levels in the Denver area.
The editorial by Rob Reuteman was spot on in laying the blame on the lending industry. The big builders rushing to beat Wall Street's quarterly earnings estimates, instead of building to meet long term sustainable demand probably deserve some black marks as well.
By the way, Boulder could finally be seeing some market cooling (as expected). March's home sales were lower than last year. DOM didn't increase considerably however. Inventory levels by at price points under $1MM look reasonable, but not quite the same story for $1MM+
I should have the m/m inventory done in the next few days. Will know more then. Currently waiting for the dataset.
If I get some time, I'll run a similar analysis for attached dwellings.
p.s. love that pic Keith. When people think of Colorado, many still envision the Shining.
The truth is we don't get around on snow cats. It's really really more like this (note prices out of date).
Colorado is on my short list for a place I might be in five years. I have some family there. Affordability/value will play big in my decision making. I'm not moving to Kansas, so there is more than price to consider.
My dad and I are going there in November. The decision would be really easy if my mom and him move too. It would be tricker to get my mom to move since she's so ingrained in California. My sister is more so.
Perhaps we can film "SURVIVORS" there...If Colorado's Energy Bills for electric and natural gas prices don't freeze them out by next Febuary.
after europe I intend to move back to boulder. Nice thing is that'll probably be 2008 or so, and a nice 50% off sale. Or 60%+ off in Denver
If I spent as much time working on my own real estate sites as I do slogging thru blogging, I'd probably make more money. But I enjoy a good read. Thanks for the break. Stop by my site if you can.
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