foreclosure filings

Year-to-date (thru 7/30/12), foreclosure filings are up over the same period last year. Both Arapahoe ounty and Denver County are up 6%. Arapahoe County currently has 2,492 active foreclosures, Denver County has 2,242 active foreclosures - active foreclosures are properties that have received a Notice of Election and Demand (NED) but has not been completed through either auction or cure.

The market is screaming for investment inventory, but anecdotal and personal experience is that the banks are really dragging out the foreclosure timeline.  By statue, the time between filing the NED and the foreclosure auction is 110 – 125 days.  In reality, this timeline is often more than a year long...

Negative Equity - Shadow Inventory

Shadow Inventory is measured in many ways.  I like measurements that consider mortgages that are 120+ days late in addition to homes that are in the foreclosure process.  Core Logic provides the only report that I am aware of that tracks underwater homes, or Negative Equity (Neg-Eq).  The following is from a recent report:

According to a new report by Core logic, 11.4 million (or 23.7%) of all U.S. mortgaged residential properties are in “Negative Equity” (when a borrower owes more on their mortgage than their property is worth).

These figures are down from 25.2% in Q4, 2011. The Negative Equity share is at its lowest in nearly three years.

Here are some details from the report. This is good news, slight as it may be, but good news!

• Negative Equity declined to $691 billion in Q1, 2012, down from $742 billion in Q4, 2011.
• More than 700,000 households returned to positive equity in Q1, 2012.
• 2.3 million borrowers had less than 5% equity, i.e. near Negative Equity in the Q1, 2012.
• Negative Equity and near Negative Equity mortgages accounted for 28.5% of all residential properties in Q1, 2012. This is down from 30.1% in Q4, 2011.
• Nevada had the highest Negative Equity percentage with 61% of all mortgaged properties underwater.

Decline in home values or an increase in mortgage debt is the cause of increase in Negative Equity. Negative Equity improved, in large part, due to improvements in home price levels. Additionally, sell through of existing inventory is fast and furious as we enter mid-summer.

Denver Market Update

All signs are to a rapidly recovering real estate market. 

Comparing January – June of 2012 to the same period last year:

Median prices are up 7.9%
Days on market are down 32 days to an average of 72
The share of total sales that are distressed (REO or short sale) is down 31%
Total sales are up 20.2%
Total inventory is down 20.4%

Every single statistic is positive.  When this is coupled with recent studies showing the Denver market to have among the lowest overhang of Shadow inventory of any large city, it certainly looks like this market is turning around quickly!

New Construction in Highlands Ranch

We were out previewing Highlands Ranch last weekend, South of E470 and South of Lucent Blvd.  There is a surprising amount of new development going on; commercial, residential, a strip mall.  We stopped in to preview the Spaces development by Shea Homes to see the latest trends.  I was impressed.  Price points ranged from $240k – low $300k.  The designs provide a loft feel, with a very open main and all the bedrooms upstairs.  Basements and garages are mostly downstairs – sort of like detached townhomes.  Outdoor spaces are usable, but very limited to a side/back patio that is designed to be very private.  Front lawns are maintained by the HOA, so it is ideal for people who do not want to do yard work but also don’t want to share walls.  I like the idea…