By Gene Davis, DENVER DAILY NEWS
Foreclosure sales at auction in Denver last month dropped 29.3 percent compared to the same time period last year, a statistic that some experts believe is one of several indicators that the local housing market is beginning to stabilize.
However, a Realtor who specializes in selling foreclosed property says many leading banks are delaying going into the foreclosure process and that the numbers aren’t what they seem.
There were 294 foreclosure sales in Denver last month, which was 122 fewer than September 2008, according to a report released Thursday by the Department of Local Affairs Division of Housing.
“We certainly feel that in the housing market, we are seeing many different indicators to suggest that the housing market has reached bottom or, if not, is awfully close,” said Patty Silverstein, chief economist for the Metro Denver Economic Development Corp.
But personal experience has led Bob Costello of Denver Foreclosure Brokers to believe otherwise. He thinks that banks aren’t foreclosing as quickly as they should, which is altering the number of foreclosures.
“At some point banks will have a whole boatload of these things, the question is just when they will unload them,” he said.
Costello said that banks are deferring the losses that come when they go through the foreclosure process until a later quarter or next year. He believes that the banks want to show a level of profitability this year and will take the financial hit next year.
Another theory Costello has for the lack of foreclosed properties is that the banks are simply overwhelmed by the number of people who are behind payment on their mortgages. But as he pointed out, people have been predicting a flood of foreclosures for a while and it has yet to hit.
“It’s all a little bit goofy right now,” he said.
The Department of Local Affairs Division of Housing acknowledged in Thursday’s report that new foreclosure filings statewide actually increased 72 percent last month compared to the same time period last year. The division’s report downplays the increase in filings as being partially driven by a statutory change that lessened the number of new filings during August and September of last year. According to the report, “the large difference in foreclosure filing totals between September 2008 and September 2009 is driven partially by statutory changes and only partially by actual conditions in the real estate markets.”
Silverstein agrees that the Denver housing market isn’t out of the woods. She’s concerned that the metro area could see more foreclosures since “the lack of job opportunity has stretched (people) a little thin as well.”
Karen Harkin, Director of Home Finance at the Colorado Housing and Finance Authority, echoed Silverstein’s comment.
“As unemployment levels rise, more people continue to face the threat of foreclosure,” she said in a statement. “We urge people who are at risk of foreclosure to contact the Colorado Foreclosure Hotline at 877-601-HOPE.”
Silverstein still believes, though, that the stabilization of home prices and sales are making it look like the Denver house market is past rock bottom and in better shape than most other cities.
According to Silverstein, one reason Denver’s house market is in better position than most other areas is because the city didn’t see the huge run up in housing prices that many other parts of the country saw. The increase in prices — which particularly hit markets like Las Vegas, Phoenix, California and Florida — was largely due to investor-based activity and left the markets vulnerable to a housing crash, she said.
Another reason Denver is in better shape is because residential developers pulled back on activity very early in the national recession. The Denver housing market isn’t oversaturated as a result, she said.
Completed foreclosures in Colorado on a whole fell 5 percent last month compared to the same time last year. Denver county reported the largest fall in the total number of completed foreclosures, while Mesa county reported the largest spike with a 217-percent increase.
For all Colorado counties surveyed, the overall foreclosure rate was 966 households per completed foreclosure.

Distributed by Colorado Capitol Reporters

By Peter Marcus, DENVER DAILY NEWS
Former Housing Secretary Henry Cisneros Wednesday in Boulder said Colorado is poised to be the first state in the nation to emerge from the housing crisis.
Arguing that Colorado is the first state to rebound in the real estate market and is starting to see the “light at the end of the tunnel,” Cisneros said in a conference call with reporters that a revitalized housing market is pivotal to national economic recovery.
“We are now starting to see what I think can be called the beginning of the climb back from the bottom of the housing market,” he told reporters.
Cisneros visited the Denver area Wednesday to attend an Urban Land Institute Colorado event in Denver discussing transit-oriented development. He also toured the Boulder mixed-income residential development The Peloton, which Cisneros’ Los Angeles-based investment firm, City View, provided the capital for. The former Housing and Urban Development Secretary and four-term Mayor of San Antonio founded City View and serves as its executive chairman.
Denver Mayor John Hickenlooper briefly joined the conference call — pausing from a marathon of City Council budget hearings — stating that Denver is starting to see its housing market rebound thanks to a focus on affordable and mixed-income housing, as well as transit-oriented development.
Sharing his own story as a laid off geologist turned downtown Denver brewpub owner, Hickenlooper remembered how LoDo was once a downtown filled with warehouses — an area in which no developer wanted to build.
“That is completely the opposite now,” said the mayor. “We’ve built somewhere between 15 (thousand) and 20,000 housing units in downtown or immediately downtown in the last dozen years. You go out into the Platte Valley, it used to be rail yards, it is filled with exactly what you’re talking about — transit-oriented developments, denser living, more people on bike paths, people walking to restaurants or nighttime activities — I think it’s a wave, not just here in Denver … people are seeing that all over the country.”

FasTracks vital?
Hickenlooper added that it is vital to the market’s success that transit projects like FasTracks see completion so that more TOD developments can boost the market.
“How do we make sure that we’re not just delivering a rush hour benefit to reduce congestion at rush hour, but that we actually begin to change the way people live and how they think about their mobility?” Hickenlooper said is a necessary question to ask.
Cisneros added that Colorado is pulling out of the housing crisis faster than other states because it is a very attractive place to live — with its abundance of natural resources and activities, educational and federal institutions, as well as tourism opportunities — people and businesses are flocking to Colorado.
In fact, Forbes.com recently named Colorado the fourth best state in the nation to do business.
The Denver area has been showing signs of recovery faster than the rest of the nation, said Cisneros. The area is in its sixth month of S&P/Case-Shiller home-price index increases.

Positive signs nationwide
The nation as a whole is also showing positive signs, including three consecutive months of S&P/Case-Shiller home-price index increases, and several consecutive months of existing and new home sale increases.
“The national numbers are encouraging,” said Cisneros. “That’s important because it’s hard to imagine a national economic recovery that can occur without the participation of the housing sector.”
Considering 20 percent of the nation’s gross domestic product is based on the housing market, including subsectors like appliances, construction and transportation, a revitalized housing market is essential to the nation’s economic success, said the former HUD Secretary.
He also added that Denver is leading the way in its ability to embrace the “new economy” to further develop the city.
“Denver is one of the best examples in the country of the phenomenon we’re seeing of resurgence of the city — a new set of economic realities related to the new economy,” said Cisneros. “Health care and biosciences, medical centers, higher education, new media, technology — all of which have major, major places in Denver — are bringing jobs back into the city that are more city friendly — they fit better into the city’s fabric.”

Distributed by Colorado Capitol Reporters

 
Source: KDVR