Housing Guide / Market Values in Colorado Springs (foreclosure, renting)

[Bob from down south]

The thread that was referenced is over a year old and missing some important changes.

First, the right of redemption of an owner in the foreclosure process was eliminated with a new Colorado law that took effect on January 1st, 2008. The auction timeline was extended...but once the property is auctioned off, the previous owner is out of the picture permanently under the new law.

One of the posters in the thread, a realtor and industry shill that on occasion makes hit-and-run drive-by posts here in this forum, says that 100+ offers are needed to find a good deal in the REO market. That's pure bullsh*t...realtors like this guy try to steer people away from REO properties because they typically pay the agents a lower commission. I guarantee you it will not take you 100+ offers if you do your homework and make offers that are reasonably aggressive...especially in this market.

RealtyTrak is another resource for foreclosures.

IMHO, a foreclosure priced at a typical 20% below market is a decent way to keep from being screwed by a trend of falling property values that is likely to continue another 15-30% or more. Some good fire sales are out there, but not common right now...but my analysis says they will be there in abundance during the fall of 08 and later.

[jazzlover]

Originally Posted by Bob from down south

The thread that was referenced is over a year old and missing some important changes.

First, the right of redemption of an owner in the foreclosure process was eliminated with a new Colorado law that took effect on January 1st, 2008. The auction timeline was extended...but once the property is auctioned off, the previous owner is out of the picture permanently under the new law.

One of the posters in the thread, a realtor and industry shill that on occasion makes hit-and-run drive-by posts here in this forum, says that 100+ offers are needed to find a good deal in the REO market. That's pure bullsh*t...realtors like this guy try to steer people away from REO properties because they typically pay the agents a lower commission. I guarantee you it will not take you 100+ offers if you do your homework and make offers that are reasonably aggressive...especially in this market.

RealtyTrak is another resource for foreclosures.

IMHO, a foreclosure priced at a typical 20% below market is a decent way to keep from being screwed by a trend of falling property values that is likely to continue another 15-30% or more. Some good fire sales are out there, but not common right now...but my analysis says they will be there in abundance during the fall of 08 and later.

I pretty much concur with this. When the Colorado economy (especially in western Colorado) wrecked in 1982, it took about a year-and-a-half after that for the real estate market to totally tank--then it took almost ten for it to recover. I firmly believe what is coming this time will be worse and more widespread than what happened in the early 1980's. Ironically, the industry that tanked in early '80's--the energy industry--may be one of the few, or maybe the only part of the Colorado economy to avoid depression this go-around. Colorado has bought into the speculation-fueled, get-something-for-nothing, debt-ridden US economy as much or more than anywhere in the country. We have done so much in the last ten years or so to absolutely destroy the healthy economic base took over 75 years to build in the US since the last Great Depression that it may take another 30 to rebuild it--if we can. We have just about strangled the golden goose.

[bustergomez]

Originally Posted by Charles

Instead of cutting out a bunch of troops, just cut back on one of these aircraft carriers


Or one of these expensive, super stealth aircraft

I worked on that invisable jet, actually I knew that pilot and was there during that shot (it rained that day when it took off, pretty witty of the folks to come up with it, ha)

Anyways, I have a question on average house being sold, what's considered the average house? Is it the sq footage (1600?).

We moved up here from Albuquerque and the avg sq ft there was around $115, but here it seems to be different with basements (Albuquerque homes don't have basements so it's easier to equate this into the system).

We bought a house near Ft Carson due to the increase in troops coming in and seeing that we'll be here for 4 years didn't seem to bother us to buy, however it seems like the market we left and now coming into seems to be at the hieght and decline of when we bought, so I may seem like we'll lose out, but the future will only tell.

We intend on selling our property in late 2011, and it'll be iteresting to see how things pan out in this time frame but 'interesting' will not be the word I use if it's still the market we are seeing today.

My dentist says that he's looking to find a house and prices have dropped from 380,000 to 345,000, he offered them 360,000 and they didn't budge so he just watched it go to 345,000 and willing to wait some more to see what happens.

I guess right now it's a bit depressing, but I'm sure things will level and optimism will take some stand. With lenders not lending like they've done in the past, it's taking its toll on the folks who have good credit and want to buy a house a harder time.

So in my opinion, the lending situation needs to get fixed first then you'll see appreciation rates work correctly, it's ecconomic.

[Bob from down south]

Originally Posted by bustergomez

With lenders not lending like they've done in the past, it's taking its toll on the folks who have good credit and want to buy a house a harder time.

So in my opinion, the lending situation needs to get fixed first then you'll see appreciation rates work correctly, it's ecconomic.

The lending situation is indeed getting "fixed," but that means people will not be able to reach the stratospheric prices they are used to with new (old) tightened loan standards. Fixed, in this case, means that bad credit gets you denied, not a super-duper special subprime loan that's guaranteed to blow up in your face, maybe even before you make the first payment. And fixed means documented seasoned income with reserves, and adherence to debt-to-income ratios that don't assume you can nibble on the sheet rock in the walls since you won't have any money left for food after paying the mortgage. Fixed means down payments, and appraisals made to really determine the value of the house, rather than designed to rubber-stamp the broker/lender's deal.

Once lending is fixed, the only way this gets back to stability is for prices to fall in real terms to line up with incomes. That can be done with price drops, or wage inflation, or a combination of the two. Either way, it's ugly if you bought anywhere near the peak or used your house as a HELOC pawn shop ATM.

[Postal]

Originally Posted by ryanek9freak

Most of the owners trash the house on the way out. I actually started up a cleaning and hauling business,cleaning up the messes that these people made, and boy does it pay.

I know how they feel though, as I was one of those people who lost their home when they could no longer afford it, but as hurt and sad as I was, I couldn't help but think of the pooor people who would have to clean up my mess if I trashed it, so I actually CLEANED the house before I left.

I've had to clean out houses that had dead dogs in them. It gets pretty nasty.

We noticed this even in just resells (not foreclosures). None of them were very appealing, aside from some hideous paint choices. We ended up buying a new house that was far better looking than any resell. You'd think people who want to sell their house would make it look like they want to sell their house.

[Bob from down south]

Well, now the extent of the damage in the Colo Springs/Pikes Peak region housing market is becoming more clear. March sales figures are in, and they tell a tale of a dismal Spring buying season.

First data point--consider that around half of the sales in the area during a normal year occur just in the two months of March and April, meaning we're over half way through now.

Sales are down 19% from a year ago, and sales weren't that great a year ago, either. Listings of existing homes are down 18%, and despite that nearly 2.5 existing homes were listed for each one that sold, increasing the inventory overhang further; 5,108 existing homes were listed for sale, 4.1% more than a year ago.

Median sales price dropped 3.5% from a year ago, from $199,900 to $193,000. Average sales price dropped 7.3% from a year ago...from $240,549 to $223,025.

Total sales volume for the period Jan-Mar 2008 is down a whopping 25.8% from 2007's already depressed figures...over $146 million more in lost revenue for the local real estate industry. Add that to even more depressed Condo sales (down 36.7%) and that's over $168 million in lost sales revenue. That's over $10 million in lost realtor commissions in Q1 08 alone.

Fred Crowley, local economist, spins this as somehow being good news...he says the Colo Springs market bottomed in Sept 2007. The inventory is increasing at the lowest rate since Sept. But the inventory is, in fact, huge and still increasing. A stable market with over a year of supply and still growing? No, sorry, no sale there (pun intended).

I'm doing some more analysis by looking at the distribution of sales beyond the aggregate figures. I suspect that some price segments are really getting hammered.

[Bideshi]

It's getting closer to a return to normalcy as each day passes. Just another 20% decrease or so and I'll be thinking of home ownership again instead of renting. Renting still has advantages even when the money is about the same as owning, especially if you are not sure you will not have to relocate ever again. Owning, of course, also has obvious advantages.

[multitrak]

Originally Posted by Bob from down south

First data point--consider that around half of the sales in the area during a normal year occur just in the two months of March and April, meaning we're over half way through now.

if you look at that the home sales per quarter Colorado Springs, Colorado (CO) Detailed Profile - relocation, real estate, travel, jobs, hospitals, schools, crime, news, sex offenders here (scroll down to chart), historically it seems that the greatest sales come in Q2 and Q3 and less so in Q1 and Q4.

Sales are down 19% from a year ago, and sales weren't that great a year ago, either. Listings of existing homes are down 18%, and despite that nearly 2.5 existing homes were listed for each one that sold, increasing the inventory overhang further; 5,108 existing homes were listed for sale, 4.1% more than a year ago.

Median sales price dropped 3.5% from a year ago, from $199,900 to $193,000. Average sales price dropped 7.3% from a year ago...from $240,549 to $223,025.

this price/inventory relationship has puzzled me: when you get outside of the metro denver area, say here in cos, the house price decrease (3.5% year to year) is generally less than the inventory increase (4.1%). there appears to be more of supply and demand relationship in the denver area with its larger population, but less so here and elsewhere in colorado, especially in the rural areas. it makes you wonder who or what is floating the market to keep it high (and from collapsing) considering all that inventory.

I'm doing some more analysis by looking at the distribution of sales beyond the aggregate figures. I suspect that some price segments are really getting hammered.

i'd like to see that...a price and inventory breakout of the high, mid, and low end markets.

[Bideshi]

"it makes you wonder who or what is floating the market to keep it high (and from collapsing) considering all that inventory. "

I think it is in part denial, sellers holding out for what they "believe" they deserve, and part despair with many owing much more than they can sell for and unable to get out of the trap gracefully. Time will painfully squeeze much of this out of the market and force prices down to realistic levels. Blue Sky and Sunshine propaganda for RE is desperate to convince people that this is the bottom and now is the time to buy! It is always the time to buy for realtors...

[Bob from down south]

Originally Posted by multitrak

it makes you wonder who or what is floating the market to keep it high (and from collapsing) considering all that inventory.

This stickiness in downward price movements is why the SoCal market took 10 years to play through the recovery from its early 90s bubble trubble.

Foreclosures do tend to accelerate the process, and there are a lot more of those in the mix this time around. And with the credit crunch killing off most of the creative ways to borrow more than one can afford, the pools of qualified buyers are really thinning out.

The real train wreck hit at the end of last year's buying season in Aug 07, so I think that by Aug of this year, when the Spring and Summer buyers have come and gone, that those holding out against all hope that they'd be saved by seasonality will feel the cold chill of reality blowing up their skirts, and price drops will accelerate.

In the meantime, we can expect a steady stream of "bottom" sightings by roving packs of hungry realtors...