NEW YORK—Americans' confidence in the economy improved slightly in August from July, but they're still roughly as gloomy as a year ago.
The downbeat sentiment underscores the challenges ahead for the increasingly shaky recovery and for retailers, which are grappling with a weak start to back-to-school shopping. Worries are even growing about the critical holiday shopping season.
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 53.5 from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The increase comes after two straight months of declines.
"The consumer is still struggling, and the prospects look like more of the same," said Ken Perkins, president of research firm RetailMetrics.
An index of 90 or more indicates a healthy economy. That level hasn't been approached since the recession began in December 2007. The index—which measures how Americans feel about business conditions, the job market and the next six months—had been recovering fitfully since hitting an all-time low of 25.3 in February 2009.
In August 2009, the index stood at 54.5, only a point higher than now. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved to be the only exception, at 62.7—still weak.
Moreover, there doesn't seem to be any catalyst in sight to get them to feel better any time soon. Home sales are plunging, and consumers are saving more and spending less as the unemployment rate remains stuck at almost 10 percent, all contributing to weak confidence.
Shoppers are increasingly waiting for the best deals and buying only fashions that they can wear right away. Perkins estimates that August retail sales were at best slightly better than last year, which was weak. Major retailers report August revenue figures Thursday.
Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong rebound. But worries are rising the economy is growing too slowly to support sustained job growth. Some are concerned it could fall back into a recession.
"The comfort ... is that confidence did not fall further," Paul Dales, U.S. Economist at Capital Economics, said in a statement. "But there are few signs that households will ramp up their spending. High unemployment, widespread negative housing equity and low share prices are keeping households on the sidelines."
Investors seized on the bigger than-expected increase. The Dow Jones industrial average got a boost early in the day on the figure, though the Dow Jones Industrial average finished just 4.99 points higher by the end of the day. Stocks have been pummeled all month by uncertainty over signs of slowing growth.
Tuesday's regional manufacturing report was another one of those signs. The drop in the Chicago Purchasing Managers Index was similar to declines seen in other regional manufacturing reports earlier this month.
The slight uptick in August's confidence figures was a result of Americans' improved outlook over the next six months, which is one component of the index.
Still, "employment concerns continue to heavily weigh on consumers' attitudes," Lynn Franco, director of The Conference Board Consumer Research Center, whose random survey was mailed to 5,000 households Aug. 1 to Aug. 24.
Meanwhile, a home price index showed prices rose in June for a third straight month as now-expired tax credits inspired a burst of home buying. But prices are expected to fall the rest of the year now that demand has faded.
The Standard & Poor's/Case-Shiller 20-city home price index, released Tuesday, posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. Home prices nationally rose 4.4 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000.
Home sales have dropped sharply since those incentives expired. Last week, the National Association of Realtors said sales of previously occupied homes in the U.S. fell 27 percent in July, the weakest showing in 15 years.
The minutes from the Federal Reserve board of governors' Aug. 10 meeting showed that the bank recognized the economy might need further stimulus beyond purchases of government debt. Some members of the Fed's policy-setting committee acknowledged the economy had softened more than they had anticipated.
Economists will closely watch Friday's August employment report. They're expect another month of tepid hiring by the private sector.
————
AP Real Estate Writer Alan Zibel in Washington contributed to this report.
Read more: Americans' economic confidence ticks up slightly - The Denver Post http://www.denverpost.com/breakingnews/ci_15950814?source=rss#ixzz0yE2Huu5k
Tuesday, August 31, 2010
Friday, August 27, 2010
Mortgage Rates Hit Lowest Point Since 1971
Mortgage rates
fell to the lowest level in decades
for the ninth time in 10
weeks, as concerns grow that
the economy is weakening.
Mortgage buyer Freddie
Mac said Thursday that the average
rate for a 30-year
fixed-rate loan was 4.36 percent
this week, down from
4.42 percent last week. That’s
the lowest since Freddie Mac
began tracking rates in 1971.
Rates have fallen as investors
shifted money into the
safety of Treasury bonds, lowering
their yield. Mortgage
rates tend to track those yields.
fell to the lowest level in decades
for the ninth time in 10
weeks, as concerns grow that
the economy is weakening.
Mortgage buyer Freddie
Mac said Thursday that the average
rate for a 30-year
fixed-rate loan was 4.36 percent
this week, down from
4.42 percent last week. That’s
the lowest since Freddie Mac
began tracking rates in 1971.
Rates have fallen as investors
shifted money into the
safety of Treasury bonds, lowering
their yield. Mortgage
rates tend to track those yields.
Ground Breaking Yesterday On Light Rail to Denver from Airport
Ground was broken Thursday for RTD’s East Corridor commuter-rail line between Denver International Airport and Union Station downtown. The rail station, being built immediately south of the Jeppesen Terminal,will be 70 feet below ground. Attendees were given a “VIP ticket to ride,” allowing them a seat on one of the first trains to use the line after its scheduled completion in 2016.
Wednesday, August 25, 2010
The Best Investors Buy During The Most Pessimistic Time
Remember, the best investors buy during the most pessimistic time. To highlight this, and to give a better perspective and some hope towards the future, something that was pointed out by Dennis Gartman, a well respected market analyst. Back in 1992, an article in Time Magazine included this passage:
"The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many “structural” burdens, as opposed to familiar “cyclical” problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought; the debt hangover; the banking collapse; the real estate depression; the health care cost explosion and the runaway federal deficit."
It's amazing how eerily similar the picture from 1992 compares to today. We all know that the period following 1992 included terrific growth and opportunities in the economy, stock market and housing. If history repeats itself, which it often does, this could point to much better days in the future with opportunities in the present.
"The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many “structural” burdens, as opposed to familiar “cyclical” problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought; the debt hangover; the banking collapse; the real estate depression; the health care cost explosion and the runaway federal deficit."
It's amazing how eerily similar the picture from 1992 compares to today. We all know that the period following 1992 included terrific growth and opportunities in the economy, stock market and housing. If history repeats itself, which it often does, this could point to much better days in the future with opportunities in the present.
Tuesday, August 17, 2010
Capital Gains Tax Set to Rise at Year End; Transaction Activity May Edge Higher as Long-Term Owners Lock in Profits
Marcus & Millichap Real Estate Investments
August 15, 2010
■With the Bush tax cuts set to expire on December 31, 2010, capital gains taxes will revert to 20 percent from their 70-plus-year low of 15 percent. In addition, barring legislative intervention, the tax rate on dividends will jump from 15.0 percent to 39.6 percent for top earners. When substantial tax code changes took effect in 1986, including a capital gains rate increase from 20 percent to 28 percent, investor liquidations nearly doubled the total realized capital gains from the previous year. Despite the decline in investment values over the last two years, many investors will likely follow this liquidation strategy, locking in their profits rather than waiting for investments to appreciate sufficiently to offset the 5 percent tax hike.
■Recent commentary by Treasury Secretary Geithner suggests the Obama administration will allow the Bush tax cuts to expire. The reluctance to endorse even greater rate hikes likely stems from concern more significant increases could further impede the economic recovery. Considering long-term capital gains taxes have averaged 26 percent over the last fifty years, even hitting 40 percent in 1976 during the Nixon/Ford administrations, risk of further increases once the economy stabilizes remain high. As a result, though investors often choose to hold assets in the year following a rate hike, perceived tax-related risks may encourage them to continue selling assets in 2011.
■Apartments have taken the lead in the national recovery and will likely post notable occupancy and rent gains in major markets over the next year. Demand for retail and office space remains tepid, however, particularly in secondary and tertiary markets, placing downward pressure on rents and preventing owners from regaining substantive pricing power. For investors holding these assets, future capital gains tax increases could overshadow appreciation substantially, extending the hold period to break even against current net profits for several years. Investors who purchased these assets more than six years ago likely have profits to protect and may consider liquidating late this year.
■In response to the increase in capital gains taxes, commercial real estate investors’ ability to defer capital gains indefinitely through 1031 exchanges will become even more attractive. Since 2002, the year before the capital gains tax rate was reduced to a 70-plus-year low, the number of 1031 exchanges has fallen by nearly half. As capital gains taxes rise, the share of deals involving 1031 exchanges will increase substantially, as sellers will be further discouraged from taking profits from the investment real estate sector.
August 15, 2010
■With the Bush tax cuts set to expire on December 31, 2010, capital gains taxes will revert to 20 percent from their 70-plus-year low of 15 percent. In addition, barring legislative intervention, the tax rate on dividends will jump from 15.0 percent to 39.6 percent for top earners. When substantial tax code changes took effect in 1986, including a capital gains rate increase from 20 percent to 28 percent, investor liquidations nearly doubled the total realized capital gains from the previous year. Despite the decline in investment values over the last two years, many investors will likely follow this liquidation strategy, locking in their profits rather than waiting for investments to appreciate sufficiently to offset the 5 percent tax hike.
■Recent commentary by Treasury Secretary Geithner suggests the Obama administration will allow the Bush tax cuts to expire. The reluctance to endorse even greater rate hikes likely stems from concern more significant increases could further impede the economic recovery. Considering long-term capital gains taxes have averaged 26 percent over the last fifty years, even hitting 40 percent in 1976 during the Nixon/Ford administrations, risk of further increases once the economy stabilizes remain high. As a result, though investors often choose to hold assets in the year following a rate hike, perceived tax-related risks may encourage them to continue selling assets in 2011.
■Apartments have taken the lead in the national recovery and will likely post notable occupancy and rent gains in major markets over the next year. Demand for retail and office space remains tepid, however, particularly in secondary and tertiary markets, placing downward pressure on rents and preventing owners from regaining substantive pricing power. For investors holding these assets, future capital gains tax increases could overshadow appreciation substantially, extending the hold period to break even against current net profits for several years. Investors who purchased these assets more than six years ago likely have profits to protect and may consider liquidating late this year.
■In response to the increase in capital gains taxes, commercial real estate investors’ ability to defer capital gains indefinitely through 1031 exchanges will become even more attractive. Since 2002, the year before the capital gains tax rate was reduced to a 70-plus-year low, the number of 1031 exchanges has fallen by nearly half. As capital gains taxes rise, the share of deals involving 1031 exchanges will increase substantially, as sellers will be further discouraged from taking profits from the investment real estate sector.
Nationally Less Than Half of all Home Sales Successful in 2009
Wall Street Journal
By Nick Timiraos
A survey of seven major housing markets found that less than half of all attempts to sell a home in 2009 had, as of last Wednesday, resulted in a sale.
The analysis, conducted by Redfin Corp., a Seattle-based brokerage that operates in nine states, shows just how tough the housing market has become–and just how many sellers are unwilling to lower their prices.
The survey looked at how the 500,000 homes that were listed for sale last year in seven of the nation’s biggest counties had fared. Around 47% of those listings had sold by last week, while just 4% of those listings were still active. The success rate looks at the number of listings that sold through the original listing agent; if someone hired an agent, and then changed agents, the home is added again to the count of new listings.
“There’s just such a standoff in the market between sellers and buyers, both with unrealistic expectations, and a lot of heartbreak and wasted effort,” said Glenn Kelman, Redfin’s chief executive. He said that buyers’ complaints of overpriced or stale listings had prompted the number crunching, which looked at properties in the counties that include Chicago, Atlanta, Seattle, Los Angeles, San Francisco, Phoenix and Boston.
Of those counties, Phoenix’s Maricopa County and San Francisco County had the highest share of listings that sold, at 59% and 57%, respectively. Chicago’s Cook County had just one-third of all homes listed during 2009 sell by mid-August.
Seller Stand-Off: A Look at Redfin’s Data
County Name Listings Activated in 2009 # 2009 Listings Sold % 2009 Listings Sold # Still Active % Still Active
Cook County, IL 134,710 44,789 33.3% 7,893 5.9%
Fulton County, GA 27,089 9,941 35.8% 1,329 4.8%
King County, WA 51,252 21,500 42.0% 1,729 3.4%
Los Angeles County, CA 130,326 68,564 52.6% 3,079 2.4%
San Francisco County, CA 9,289 5,259 56.6% 112 1.2%
Maricopa County, AZ 137,647 81,204 59.0% 5,008 3.6%
Suffolk County, MA 15,763 5,682 36.1% 393 2.5%
7-County Average 506,796 236,939 46.8% 19,545 3.9%
Many sellers aren’t willing to reduce their prices because they don’t want to sell their homes for less than the amount they owe. Those “short sales” typically take much longer to complete because a bank must sign off on the deal, and they can be just as damaging to a borrower’s credit score as a foreclosure. Banks are less likely to approve short sales for borrowers who can’t demonstrate hardship or imminent default.
Others simply think that they shouldn’t have to reduce their prices, often because they’ve plunked down lots of money for renovations that they had hoped would boost the value of their home. The buyers may be happy to pull their homes off and wait for the market to come back.
Already, there are some signs that this year could be worse than 2009. Many markets have seen inventory levels shoot up since a tax credit for home buyers expired in April.
Follow Nick for more housing and mortgages news on Twitter:
By Nick Timiraos
A survey of seven major housing markets found that less than half of all attempts to sell a home in 2009 had, as of last Wednesday, resulted in a sale.
The analysis, conducted by Redfin Corp., a Seattle-based brokerage that operates in nine states, shows just how tough the housing market has become–and just how many sellers are unwilling to lower their prices.
The survey looked at how the 500,000 homes that were listed for sale last year in seven of the nation’s biggest counties had fared. Around 47% of those listings had sold by last week, while just 4% of those listings were still active. The success rate looks at the number of listings that sold through the original listing agent; if someone hired an agent, and then changed agents, the home is added again to the count of new listings.
“There’s just such a standoff in the market between sellers and buyers, both with unrealistic expectations, and a lot of heartbreak and wasted effort,” said Glenn Kelman, Redfin’s chief executive. He said that buyers’ complaints of overpriced or stale listings had prompted the number crunching, which looked at properties in the counties that include Chicago, Atlanta, Seattle, Los Angeles, San Francisco, Phoenix and Boston.
Of those counties, Phoenix’s Maricopa County and San Francisco County had the highest share of listings that sold, at 59% and 57%, respectively. Chicago’s Cook County had just one-third of all homes listed during 2009 sell by mid-August.
Seller Stand-Off: A Look at Redfin’s Data
County Name Listings Activated in 2009 # 2009 Listings Sold % 2009 Listings Sold # Still Active % Still Active
Cook County, IL 134,710 44,789 33.3% 7,893 5.9%
Fulton County, GA 27,089 9,941 35.8% 1,329 4.8%
King County, WA 51,252 21,500 42.0% 1,729 3.4%
Los Angeles County, CA 130,326 68,564 52.6% 3,079 2.4%
San Francisco County, CA 9,289 5,259 56.6% 112 1.2%
Maricopa County, AZ 137,647 81,204 59.0% 5,008 3.6%
Suffolk County, MA 15,763 5,682 36.1% 393 2.5%
7-County Average 506,796 236,939 46.8% 19,545 3.9%
Many sellers aren’t willing to reduce their prices because they don’t want to sell their homes for less than the amount they owe. Those “short sales” typically take much longer to complete because a bank must sign off on the deal, and they can be just as damaging to a borrower’s credit score as a foreclosure. Banks are less likely to approve short sales for borrowers who can’t demonstrate hardship or imminent default.
Others simply think that they shouldn’t have to reduce their prices, often because they’ve plunked down lots of money for renovations that they had hoped would boost the value of their home. The buyers may be happy to pull their homes off and wait for the market to come back.
Already, there are some signs that this year could be worse than 2009. Many markets have seen inventory levels shoot up since a tax credit for home buyers expired in April.
Follow Nick for more housing and mortgages news on Twitter:
Shorter Term Mortgages Gain Favor for Refinancing
By Stephanie Armour, USA TODAY
More homeowners are refinancing into shorter-term loans, saving a bundle by taking advantage of the lowest mortgage rates in decades.
Nearly a third of borrowers refinancing fixed 30-year loans in April through June picked loans with 15- or 20-year terms, according to mortgage finance giant Freddie Mac. It was the highest share since 2004.
The trend has been driven by near-weekly drops in rates all summer.
Average rates on fixed 15-year loans fell below 4% for the first time last week, dropping to 3.92%, according to Freddie Mac. A year ago, the average 15-year rate was 4.68%.
CALCULATE: Your mortgage payments at various terms
Meanwhile, the rates on fixed 30-year loans now average 4.44%, Freddie Mac found.
At today's rates, a borrower with a 30-year loan at a 6.5% interest rate and a $200,000 principal balance could save some $70,000 in interest over the life of a shorter 20-year loan.
"It's borrowers looking to build equity more quickly, and borrowers have generally been paying down their loans more quickly," says Keith Gumbinger, vice president of HSH Associates, a publisher of mortgage and consumer loan information.
Peter Iche, president of Carthage Federal Savings and Loan Association in Carthage, N.Y., says he's seen an increase in people who are approaching retirement refinancing to shorter-term loans.
"They realize that they can afford a heavier payment," he says. "They're getting closer to retirement where they are willing to suck it up for a few years."
Most of the customers trying to refinance to shorter-term loans usually qualify, he says. And with rates as low as they are now, "For the group of people that can afford to do it, it's a good time to wrap things up."
Many can't, however.
With rates at record lows, a higher volume of refinancings would be expected, says Mark Zandi of Moody's Analytics.com. But high unemployment and lost home equity is preventing many borrowers from doing so, he says.
Application volume for both home-purchase mortgages and refinancings has been tepid because many potential borrowers lack high enough credit scores, sufficient income or enough equity in their homes to qualify for new loans.
Borrowers' monthly payments rise when they refinance into a shorter-term loan, so lenders generally require borrowers to have higher monthly incomes to get a 15-year mortgage than a 30-year.
In addition, because property values in many areas have fallen sharply the past three years, about a quarter of residential properties with mortgages are worth less than the loan balances.
More homeowners are refinancing into shorter-term loans, saving a bundle by taking advantage of the lowest mortgage rates in decades.
Nearly a third of borrowers refinancing fixed 30-year loans in April through June picked loans with 15- or 20-year terms, according to mortgage finance giant Freddie Mac. It was the highest share since 2004.
The trend has been driven by near-weekly drops in rates all summer.
Average rates on fixed 15-year loans fell below 4% for the first time last week, dropping to 3.92%, according to Freddie Mac. A year ago, the average 15-year rate was 4.68%.
CALCULATE: Your mortgage payments at various terms
Meanwhile, the rates on fixed 30-year loans now average 4.44%, Freddie Mac found.
At today's rates, a borrower with a 30-year loan at a 6.5% interest rate and a $200,000 principal balance could save some $70,000 in interest over the life of a shorter 20-year loan.
"It's borrowers looking to build equity more quickly, and borrowers have generally been paying down their loans more quickly," says Keith Gumbinger, vice president of HSH Associates, a publisher of mortgage and consumer loan information.
Peter Iche, president of Carthage Federal Savings and Loan Association in Carthage, N.Y., says he's seen an increase in people who are approaching retirement refinancing to shorter-term loans.
"They realize that they can afford a heavier payment," he says. "They're getting closer to retirement where they are willing to suck it up for a few years."
Most of the customers trying to refinance to shorter-term loans usually qualify, he says. And with rates as low as they are now, "For the group of people that can afford to do it, it's a good time to wrap things up."
Many can't, however.
With rates at record lows, a higher volume of refinancings would be expected, says Mark Zandi of Moody's Analytics.com. But high unemployment and lost home equity is preventing many borrowers from doing so, he says.
Application volume for both home-purchase mortgages and refinancings has been tepid because many potential borrowers lack high enough credit scores, sufficient income or enough equity in their homes to qualify for new loans.
Borrowers' monthly payments rise when they refinance into a shorter-term loan, so lenders generally require borrowers to have higher monthly incomes to get a 15-year mortgage than a 30-year.
In addition, because property values in many areas have fallen sharply the past three years, about a quarter of residential properties with mortgages are worth less than the loan balances.
Wednesday, August 11, 2010
EdgeWater Home Value Jumps 45% from 2000 to 2008
The tiny city of Edgewater is seeking to develop a fresh
identity by embracing its old-town charm with a lot of
new changes. ¶ In a little more than a year, Edgewater
has overhauled its charter, putting a city-manager-led government
in place, and has seen five restaurants open. ¶ The average
home value jumped 45 percent between 2000 and 2008 to
$193,364, according to City-Data.com.
identity by embracing its old-town charm with a lot of
new changes. ¶ In a little more than a year, Edgewater
has overhauled its charter, putting a city-manager-led government
in place, and has seen five restaurants open. ¶ The average
home value jumped 45 percent between 2000 and 2008 to
$193,364, according to City-Data.com.
Monday, August 9, 2010
Bond Purchases
Bond Purchases
There was talk last week that the Fed may resume the purchases of mortgage-backed securities in order to try to boost the struggling US economy. Generally when there is more demand for a bond the price increases and rates fall. This could push mortgage interest rates even lower than their current historic levels. The Wall Street Journal reported that the Fed might make "a modest but symbolically important change" in how they manage their securities portfolios. Analysts indicate the Fed could use proceeds from maturing mortgage bonds to restart their MBS buying. We should hear some news regarding this following the Fed meeting this week.
There was talk last week that the Fed may resume the purchases of mortgage-backed securities in order to try to boost the struggling US economy. Generally when there is more demand for a bond the price increases and rates fall. This could push mortgage interest rates even lower than their current historic levels. The Wall Street Journal reported that the Fed might make "a modest but symbolically important change" in how they manage their securities portfolios. Analysts indicate the Fed could use proceeds from maturing mortgage bonds to restart their MBS buying. We should hear some news regarding this following the Fed meeting this week.
Friday, August 6, 2010
15 Year Mortgage Rates at Record Low
15-year mortgage rates at record low • WASHINGTON» A plunge in mortgage rates is giving homeowners a rare opportunity to lock in a 15-year fixed-rate loan for less than 4 percent. Rates haven’t dipped this low in decades. For those who can qualify, it’s the chance to pay off a home in half the time while saving tens of thousands of dollars — if not more.
Foreclosures in rural Colo. rise as state toll falls
By Mark Jaffe The Denver Post
Foreclosure filings in parts of rural Colorado rose in the second quarter, even as the statewide number dropped to its lowest level in five quarters.
The state total of 10,233 foreclosure filings for the second quarter of 2010 marked a 15.7 percent drop from the second quarter of 2009, according to a report released Thursday by the Colorado Department of Local Affairs’ Division of Housing.
“Statewide, things look pretty good. There have been significant declines in foreclosure filings in the Front Range,” said Ryan McMaken, a spokesman for the state Division of Housing. “In some rural areas, there is a different story.”
While foreclosure filings in Denver dropped 30 percent to 1,134 compared with the second quarter of 2009, in Mesa County filings jumped 40 percent to 370.
The long recession and weak recovery have hurt mountain counties such as Eagle and Summit, which depend upon vacation-home sales, McMaken said.
Eagle County’s filings jumped 51 percent to 148, and Summit’s were up 23 percent to 95, compared with the second quarter of 2009.
Some Western Slope counties also have been hurt by the retrenchment of the oil and gas industry, he said.
“We’ve been getting more calls for rural areas, and some deal with agricultural and business calls. … That’s new,” said Stephanie Riggi, manager of the Colorado Foreclosure Hotline.
Although new foreclosure filings continue to fall and foreclosure sales are relatively stable, according to state officials, the pool of unsold houses is growing.
“Our inventory is up 1,500 homes,” said Rob Woodcock, a Realtor with Re/Max Southeast.
In addition to the growing number of homes for sale in general in metro Denver, the average time properties are on the market has stretched from two to six months, Woodcock said.
Even though mortgages are at historic lows — with rates between 4 percent and 5 percent — the expiration of an $8,000 tax credit for first-time homebuyers and continuing weakness in the economy are hampering sales, Woodcock said.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
Foreclosure filings in parts of rural Colorado rose in the second quarter, even as the statewide number dropped to its lowest level in five quarters.
The state total of 10,233 foreclosure filings for the second quarter of 2010 marked a 15.7 percent drop from the second quarter of 2009, according to a report released Thursday by the Colorado Department of Local Affairs’ Division of Housing.
“Statewide, things look pretty good. There have been significant declines in foreclosure filings in the Front Range,” said Ryan McMaken, a spokesman for the state Division of Housing. “In some rural areas, there is a different story.”
While foreclosure filings in Denver dropped 30 percent to 1,134 compared with the second quarter of 2009, in Mesa County filings jumped 40 percent to 370.
The long recession and weak recovery have hurt mountain counties such as Eagle and Summit, which depend upon vacation-home sales, McMaken said.
Eagle County’s filings jumped 51 percent to 148, and Summit’s were up 23 percent to 95, compared with the second quarter of 2009.
Some Western Slope counties also have been hurt by the retrenchment of the oil and gas industry, he said.
“We’ve been getting more calls for rural areas, and some deal with agricultural and business calls. … That’s new,” said Stephanie Riggi, manager of the Colorado Foreclosure Hotline.
Although new foreclosure filings continue to fall and foreclosure sales are relatively stable, according to state officials, the pool of unsold houses is growing.
“Our inventory is up 1,500 homes,” said Rob Woodcock, a Realtor with Re/Max Southeast.
In addition to the growing number of homes for sale in general in metro Denver, the average time properties are on the market has stretched from two to six months, Woodcock said.
Even though mortgages are at historic lows — with rates between 4 percent and 5 percent — the expiration of an $8,000 tax credit for first-time homebuyers and continuing weakness in the economy are hampering sales, Woodcock said.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
Denver Metro Area-Top Metro Area for Lowest Share of Price Reduced Listings Nationwide
The top 10 metro areas with the highest share of price-reduced listings (percentage of discounted listings; median discount among 26 study markets)
1. Jacksonville: 54 percent share of price-reduced listings; $19,000 median discount
2. Phoenix: 52.7 percent; $16,000
3. Minneapolis-St. Paul: 51.1 percent; $17,000
4. Orlando: 50.7 percent; $20,100
5. Austin: 50.3 percent; $13,000
6. Chicago: 50.2 percent; $20,000
7. Tucson: 49.1 percent; $16,760
8. Salt Lake City: 48.8 percent; $15,000
9. Baltimore: 48.7 percent; $18,000
10. Seattle: 47.6 percent; $23,900
The top 10 metro areas with the lowest share of price-reduced listings
1. Denver: 32.5 percent; $13,100
2. Los Angeles: 39.4 percent; $28,764
3. San Francisco: 40.9 percent; $38,000
4. Miami-Ft. Lauderdale-Palm Beach: 41.2 percent; $27,100
5. Richmond, Va.: 43 percent; $12,050
6. San Diego: 43.4 percent; $31,000
7. Las Vegas: 44 percent; $15,000
8. Norfolk-Virginia Beach: 44 percent; $15,000
9. Houston: 44.3 percent; $10,000
10. Charlotte: 44.4 percent; $13,000
(Source: ZipRealty)
1. Jacksonville: 54 percent share of price-reduced listings; $19,000 median discount
2. Phoenix: 52.7 percent; $16,000
3. Minneapolis-St. Paul: 51.1 percent; $17,000
4. Orlando: 50.7 percent; $20,100
5. Austin: 50.3 percent; $13,000
6. Chicago: 50.2 percent; $20,000
7. Tucson: 49.1 percent; $16,760
8. Salt Lake City: 48.8 percent; $15,000
9. Baltimore: 48.7 percent; $18,000
10. Seattle: 47.6 percent; $23,900
The top 10 metro areas with the lowest share of price-reduced listings
1. Denver: 32.5 percent; $13,100
2. Los Angeles: 39.4 percent; $28,764
3. San Francisco: 40.9 percent; $38,000
4. Miami-Ft. Lauderdale-Palm Beach: 41.2 percent; $27,100
5. Richmond, Va.: 43 percent; $12,050
6. San Diego: 43.4 percent; $31,000
7. Las Vegas: 44 percent; $15,000
8. Norfolk-Virginia Beach: 44 percent; $15,000
9. Houston: 44.3 percent; $10,000
10. Charlotte: 44.4 percent; $13,000
(Source: ZipRealty)
Wednesday, August 4, 2010
Front Range Vacancy Rates Lowest Since 2001
Apartment vacancies hit lowest since 2001
Renters are coming back, and analysts see a lack of units around the corner.
By Margaret Jackson
The Denver Post
Apartment vacancies in metro Denver have dropped to an average 6.1 percent, the lowest second-quarter vacancy rate since 2001, when it was 5.7 percent, according to a report released Tuesday.
The decline is largely a result of more people moving to Colorado and fewer apartments being built, according to industry experts.
The vacancy rate is down from 6.5 percent in the first quarter and 9 percent from the second quarter of last year, according to the report released by the Apartment Association of Metro Denver and the Department of Local Affairs Division of Housing.
The vacancy rate was lower only in two other quarters over the nine-year period: 5.3 percent in the third quarter of 2007, and 5.9 percent in the first quarter of 2008. It was 6.1 percent in the fourth quarter of 2007.
“There’s just nothing (to be built) in the pipeline,” said Gordon Von Stroh, professor of business at the University of Denver and the report’s author. “Anything that’s being built is deed (income) restricted.”
Vacancies also are dropping because renters who had moved home or doubled up are starting to come back to the market, said Jeff Hawks of Apartment Realty Advisors.
“They’ve found that they didn’t lose their job and they’re sick of their roommate,” Hawks said.
And with an estimated 180,000 young adults in the region turning 20 over the next five years and very few apartment projects being built, the vacancy rate is likely to drop even further. There are 17,000 vacant apartments in metro Denver.
“The last time we had that many kids turn 20 was from 1969 to 1975 and we built 75,000 apartment units during that time,” Hawks said. “The real problem in Denver is we can’t build until we raise rents. There’s nothing to move into for this population.”
For the first time in more than a year, all counties reported year-over-year increases in countywide average rents. The metro-wide average rent increased from $870 to $900 a month.
However, when adjusted for inflation, rents are 10 percent lower now than they were 10 years ago, said Ryan McMaken, spokesman for the Division of Housing.
“The population increase will continue to drive down vacancies, but it’s difficult for owners to move rents up because people don’t have the money,” McMaken said. “There’s just not enough wage and employment growth right now to make it easy for owners to increase rents.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
Renters are coming back, and analysts see a lack of units around the corner.
By Margaret Jackson
The Denver Post
Apartment vacancies in metro Denver have dropped to an average 6.1 percent, the lowest second-quarter vacancy rate since 2001, when it was 5.7 percent, according to a report released Tuesday.
The decline is largely a result of more people moving to Colorado and fewer apartments being built, according to industry experts.
The vacancy rate is down from 6.5 percent in the first quarter and 9 percent from the second quarter of last year, according to the report released by the Apartment Association of Metro Denver and the Department of Local Affairs Division of Housing.
The vacancy rate was lower only in two other quarters over the nine-year period: 5.3 percent in the third quarter of 2007, and 5.9 percent in the first quarter of 2008. It was 6.1 percent in the fourth quarter of 2007.
“There’s just nothing (to be built) in the pipeline,” said Gordon Von Stroh, professor of business at the University of Denver and the report’s author. “Anything that’s being built is deed (income) restricted.”
Vacancies also are dropping because renters who had moved home or doubled up are starting to come back to the market, said Jeff Hawks of Apartment Realty Advisors.
“They’ve found that they didn’t lose their job and they’re sick of their roommate,” Hawks said.
And with an estimated 180,000 young adults in the region turning 20 over the next five years and very few apartment projects being built, the vacancy rate is likely to drop even further. There are 17,000 vacant apartments in metro Denver.
“The last time we had that many kids turn 20 was from 1969 to 1975 and we built 75,000 apartment units during that time,” Hawks said. “The real problem in Denver is we can’t build until we raise rents. There’s nothing to move into for this population.”
For the first time in more than a year, all counties reported year-over-year increases in countywide average rents. The metro-wide average rent increased from $870 to $900 a month.
However, when adjusted for inflation, rents are 10 percent lower now than they were 10 years ago, said Ryan McMaken, spokesman for the Division of Housing.
“The population increase will continue to drive down vacancies, but it’s difficult for owners to move rents up because people don’t have the money,” McMaken said. “There’s just not enough wage and employment growth right now to make it easy for owners to increase rents.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
Tuesday, August 3, 2010
Thieves Stealing Children's Social Security Numbers for Credit
By Bill Draper
The Associated Press
KANSAS CITY, MO.» The latest form of identity theft doesn’t depend on stealing your Social Security number. Now thieves are targeting your child’s number long before the little one even has a bank account.
Hundreds of online businesses are using computers to find dormant Social Security numbers — usually those assigned to children who don’t use them — then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off.
Authorities say the scheme could pose a new threat to the nation’s credit system. Because the numbers exist in a legal gray area, federal investigators have not figured out how to prosecute the people involved.
“If people are obtaining enough credit by fraud, we’re back to another financial collapse,” said Linda Marshall, an assistant U.S. attorney in Kansas City. “We tend to talk about it as the next wave.”
The sellers get around the law by not referring to Social Security numbers. Instead, just as someone might pay for an escort service instead of a prostitute, they refer to CPNs — for credit profile, credit protection or credit privacy numbers.
Julia Jensen, an FBI agent in Kansas City, discovered the scheme while investigating a mortgage-fraud case. She has given presentations to lenders across the Kansas City area to show them how easy it is to create a false credit score using these numbers.
“The back door is wide open,” she said. “We’re trying to get lenders to understand the risks.”
It is not clear how widespread the fraud is, mostly because the scheme is difficult to detect and practiced by fly-by-night businesses.
Many of the business selling the numbers promise to raise customers’ credit scores to 700 or 800 within six months.
If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again.
The Associated Press
KANSAS CITY, MO.» The latest form of identity theft doesn’t depend on stealing your Social Security number. Now thieves are targeting your child’s number long before the little one even has a bank account.
Hundreds of online businesses are using computers to find dormant Social Security numbers — usually those assigned to children who don’t use them — then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off.
Authorities say the scheme could pose a new threat to the nation’s credit system. Because the numbers exist in a legal gray area, federal investigators have not figured out how to prosecute the people involved.
“If people are obtaining enough credit by fraud, we’re back to another financial collapse,” said Linda Marshall, an assistant U.S. attorney in Kansas City. “We tend to talk about it as the next wave.”
The sellers get around the law by not referring to Social Security numbers. Instead, just as someone might pay for an escort service instead of a prostitute, they refer to CPNs — for credit profile, credit protection or credit privacy numbers.
Julia Jensen, an FBI agent in Kansas City, discovered the scheme while investigating a mortgage-fraud case. She has given presentations to lenders across the Kansas City area to show them how easy it is to create a false credit score using these numbers.
“The back door is wide open,” she said. “We’re trying to get lenders to understand the risks.”
It is not clear how widespread the fraud is, mostly because the scheme is difficult to detect and practiced by fly-by-night businesses.
Many of the business selling the numbers promise to raise customers’ credit scores to 700 or 800 within six months.
If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again.
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