In the month of August, 2009, a report from RealtyTrac, Inc. showed that Colorado placed eighth in terms of the highest foreclosure rates in America. The study showed that more than 6,400 properties were foreclosed in August, which is one out of every 329 households. These stats represent an 18 percent jump from July, and are 39 percent higher than just one year previous. The nationwide average was about one in every 357 households.
This trend has been growing for the past several months. In the second quarter of 2009, Colorado had 12,135 foreclosure filings. This represented a 15 percent increase from the first quarter of 2009, according to the Colorado Division of Housing. Total foreclosures for the first six months of the year reached 22,644.
At this pace, Colorado is set to pass up its record 2007 and 2008 foreclosure numbers. In 2008, Colorado saw 38,333 foreclosure filings. 2007 was the highest year so far, with 39,920 foreclosure filings that year. Colorado may see larger numbers in foreclosure filings in 2009 than in either of these two years.
The fact that foreclosures in Colorado have hit these levels means some specific things for the real estate market in the state. It means, among other things, that there are still plenty of properties in the foreclosure process, even though REO sales have been falling.
The vast majority of these properties, according to the Colorado Division of Housing spokesman Ryan McMaken, were mostly homes and condos. The number of filings for non-residential properties was relatively low.
These statistics don’t tell the whole tale, however. Slightly tempering these statistics is the fact that the sale of bank-owned or REO properties dropped during the month of August, falling by 13 percent. Many lenders have implemented either formal or informal moratoriums on the foreclosure process, which means that many foreclosures aren’t making it all the way through the sale process. Completed foreclosures, while they have grown in number overall this year, have not grown at the same pace as foreclosure filings have grown.
There are also many foreclosure prevention initiatives that have helped temper the situation. The Foreclosure Hotline, for example, has helped many homeowners to be able to stay in their homes, fending off the wide growth of completed foreclosures.
The foreclosures in Colorado are mostly concentrated around the largest counties. Denver, Adams, Arapahoe and Weld counties have higher foreclosure rates than the more rural areas of Colorado.
While there is some dispute, especially among the Colorado legislature, about the reliability of RealtyTrac data, the fact remains that we are still seeing quite a bit of fallout from the economic downturn.
This news isn’t all bad. The influx of foreclosures into the Colorado home market means that people who are looking to buy a new home have many more opportunities than ever before. Today, new home prices are at record lows, and home buyers can get into a much nicer home for the same money they would have spent just a few years ago.
