Economist sees modest gains for Colorado in 2010

By Aldo Svaldi
The Denver Post

Posted: 01/21/2010 01:00:00 AM MST

Colorado will see job growth, improving incomes and rising retail sales this year, predicted Bill Kendall, one of the state's top economists.

But those gains will be modest at best, he cautioned.

"It is not going to feel like a healthy economy," Kendall told a lunch gathering of the Denver Association of Business Economists on Wednesday.

Economists are trying to figure out why Colorado's economy fell so hard after Lehman Brothers collapsed in mid-September 2008, despite the state having avoided the run-up in home prices seen elsewhere.

"The economy fell off a cliff," said Kendall, who does economic modeling with the Center for Business & Economic Forecasting in Denver.

Kendall attributes the sharp contraction to the tight credit markets that small companies and entrepreneurs faced.

Companies in Colorado with fewer than 250 workers have cut their payrolls by 5.6 percent during this recession, while bigger businesses have shed jobs by half that amount.

In 2002 and 2003, bigger companies were responsible for the majority of layoffs, he said.

A sharp drop in commodity prices in the second half of 2008 also hit the state hard.

Grand Junction, which rode high on a surge in drilling activity, has suffered the sharpest declines in job growth of any metropolitan area in the country for the past 12 months, edging out even Flint, Mich., Kendall said.

Three areas to watch this year are commercial real estate, banking and government, economists said.

Although the last decade didn't generate the wave of speculative building seen in the early 1980s, many properties are now worth less than the debt owed on them.

Banks have continued to roll that debt over rather than recognizing and writing the losses off, actions that could eventually leave them short of capital.

That's a problem because the same small and midsize banks behind many of the failing commercial-real-estate loans are also a key source of small-business funding, said Tucker Hart Adams, a retired economist who also spoke.

Although governments were able to add jobs last year, along with the health care and education fields, budget shortfalls will force governments to cut jobs this year, Kendall said.

Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com

Read more: http://www.denverpost.com/business/ci_14233631#ixzz0dLjEPcoR

Government lifts rule discouraging flipping; homes can be bought and resold within 90 days

Government lifts rule discouraging flipping; homes can be bought and resold within 90 days

04:32 PM PST on Monday, January 18, 2010

By LESLIE BERKMAN
The Press-Enterprise

In a move that could make foreclosed properties more attractive to investors and increase the number of homes available to first-time buyers, the federal government is temporarily lifting a prohibition against providing FHA mortgage insurance for homes that are resold within 90 days.

The Department of Housing and Urban Development designed the regulation to discourage the flipping of houses by investors that drove up prices during the housing market boom of a few years ago. But critics say its unintended affect has been to reduce the options of first-time buyers who already are competing for a shrunken supply of homes for sale.

Last year banks slowed the flow of properties headed to foreclosure, possibly in an effort to modify troubled mortgages to make them more affordable or to avoid posting losses when the homes are sold.

The waiver on the purchase of flipped houses with FHA mortgages, which begins February 1 and is effective for one year, “will give FHA borrowers access to a broader array of recently foreclosed properties,” HUD said Friday in announcing the change.

Conditions attached to the waiver are expected to prevent what HUD called “predatory practices” by investors. For instance when a house is resold within 90 days of purchase at a price that is 20 percent higher, the seller would have to justify the increase, such as by showing how much was spent on repairs and renovation.

Some real estate experts complain that investors who come into the foreclosure market with cash have an unfair advantage over first-time buyers who are less attractive to the banks because they frequently can afford only minimum down payments.

Other experts argue that investors perform a community service by buying and fixing up the most distressed and vandalized foreclosed houses that otherwise would be uninhabitable and ineligible for FHA financing. But they add that in many cases investors have not been able to sell the refurbished houses to FHA buyers because they could not wait 90 days to recoup their purchase, rehabilitation and holding costs.

So instead of first-time buyers with FHA mortgages getting such houses, they often have been sold to other investors who have converted them to rentals or to people who could afford the larger down payments required for conventional financing.

Rich Cosner, president of Prudential California Realty with nine office in Orange, Riverside and San Bernardino counties, said because of the FHA restriction against insuring loans on houses bought from flippers, many first-time buyers “were locked out of some of the best houses.”

Investor-owned houses that are “flipped” represent “a small but growing percentage of the resale market,” said Andrew LePage, a spokesman for DataQuick Information Systems, which tracks housing sales and prices. LePage said absentee buyers, most of whom are investors, in December accounted for 24 percent of sales in Riverside County and 28 percent in San Bernardino County.

In November homes resold after being owned no more than 180 days represented 3 percent of sales in Riverside County and 4 percent in San Bernardino County, LePage said.

Nicholas Manfredi, president of the Corona-based Inland Empire Investors Forum, said HUD’s waiver was greeted with joy by his investor colleagues. “They were high fiving me in the gym this morning,” he said Monday.

Manfredi said he is certain the change will attract more investors who will buy houses in neighborhoods dominated by FHA buyers. He said previously some investors shied away from these lower price neighborhoods, which he said had the effect of perpetuating community blight.

However Manfredi said the future of the Inland foreclosure market is too murky for him to recommend that investors dive into flipping. His biggest worry, he said, is that the change in federal policy may mean that the government expects banks to start allowing their backlog of delinquent loans to rush to foreclosure. If that happens, he said, home prices will fall and harm anyone needing to quickly sell investment properties.

Several local real estate agents, including Joyce Aragon, a sales agent for All National Realty in Ontario and president of the Inland Valley Association of Realtors, say in recent weeks they have seen an uptick in the volume of repossessed homes coming to market. Pete Nyiri, owner of Top Producers Realty in Corona, a major broker of repossessed houses, said the number of foreclosures that banks assigned to him last month increased 40 percent and many of those have yet to be listed.

business

Denver area home resales fell from 2008 to 2009

By Margaret Jackson
The Denver Post

Posted: 01/19/2010 01:00:00 AM MST

Lower home inventory on the market than in the recent past could create some buyer urgency, as well as price support. ( Craig F. Walker, Denver Post file photo )

The number of single-family home resales in 2009 in metro Denver dropped 13 percent compared with the previous year, according to an analysis of Metrolist data.

Last year, 33,669 previously occupied homes sold, compared with 38,661 in 2008, according to the analysis performed by independent real estate consultant Gary Bauer.

The number of condos sold during the same period dropped 9 percent to 9,064, from 9,962 in 2008.

The analysis also showed:

• The most homes sold in the $200,000-to-$299,000 price range during both years.

• The largest number of condos sold during both years was in the $100,000-to-$159,999 price range.

• Homes priced over $1 million accounted for 384 sales in 2009, compared with 587 in 2008.

• Condos priced over $1 million accounted for 23 sales in 2009, compared with 51 in 2008.

Bauer said he expects home sales this month to be sluggish. However, they should start to pick up in February and March, he said, as first-time buyers rush to take advantage of the $8,000 tax credit that was extended through April 30.

He's also telling a number of his clients that now is the time to move if they want to take advantage of the $6,500 credit available to buyers who have owned their existing homes for at least five years.

Gretchen Faber, broker-manager of the Kentwood Co. Cherry Creek, said the low inventory of homes on the market is creating some buyer urgency.

At the end of December, there were 16,456 homes on the market, down 16 percent from the same time a year ago.

"Some buyers are waiting for new inventory to come on because they think they've seen everything," Faber said. "It's probably a good time to put something on the market, but it has to be at a really competitive price. Buyers are picky, and they're still expecting a good deal."

ReMax Professionals broker Jack O'Connor said that while inventory is down compared with last year, it will rise in April, May and June, around the same time the tax-credit program expires.

"2010 is going to look a lot like 2009," O'Connor said. "As inventory rises and with the potential of interest rates rising, sales will be about the same as '09."

Read more: http://www.denverpost.com/business/ci_14218670#ixzz0d4C3LISv

The Number of "For Sale" Homes in December Drops by Nearly Five Percent, Reports ZipRealty

The Number of "For Sale" Homes in December Drops by Nearly Five Percent, Reports ZipRealty

Nearly 28,000 Less Homes Were Listed for Sale Last Month Compared to November

January 13, 2010: 11:08 AM ET

The number of home listings within 27 major U.S. metropolitan areas dropped significantly in December by 4.8 percent, compared to a month prior, and is down 26.3 percent compared to December 2008, according to a monthly report of homes listed for sale on Multiple Listing Services (MLS) in the 27 markets surveyed by ZipRealty (www.ziprealty.com) (NASDAQ: ZIPR), a national real estate brokerage.

December also marked the eighteenth consecutive month-over-month decline in the total number of home listings in the 27 markets, according to the survey.

Other highlights from ZipRealty's December Housing Inventory Index include:

--  The combined number of MLS-listed single family homes and condos within
   all 27 major U.S. markets in December totaled 551,447, down from 579,413 in
   November.
--  December marked the largest month-over-month decline in home listings in
   2009.
--  Markets with significant month-over-month inventory declines include
   Boston (13.3%), the San Francisco Bay Area (12.1%), Denver (9.2%),
   Minneapolis-St. Paul (9%) and Seattle (7.9%).
--  Phoenix was one of only two markets where the number of homes listed for
   sale increased, at a modest 1.8 percent. In Sacramento, ZipRealty tracked a
   minor increase of .01 percent.
   

"Seasonality and the heavy activity by first-time homebuyers in October and November, who were rushing to take advantage of the tax credit, impacted housing inventory in December," said ZipRealty president and CEO Patrick Lashinsky.

Following is a snapshot of the housing inventory across all 27 metros that ZipRealty tracked in December 2009:

                                          Percentage         Percentage
                    Home Inventory        Change:            Change:
Market Name        (SFRs and Condos)  Month-over-Month     Year-over-Year
                  ------------------ ----------------- ------------------
Overall Market
Total                        551,447              -4.8%             -26.3%
                  ------------------ ----------------- ------------------
Austin                          7,317              -6.7%             -17.6%
                  ------------------ ----------------- ------------------
Baltimore                       8,620              -5.4%             -10.3%
                  ------------------ ----------------- ------------------
Boston                         26,289              -4.6%             -13.3%
                  ------------------ ----------------- ------------------
Charlotte                      18,330              -4.2%              -5.9%
                  ------------------ ----------------- ------------------
Chicago                        60,509              -5.7%             -14.1%
                  ------------------ ----------------- ------------------
Dallas-Ft. Worth               32,141              -3.8%              -9.1%
                  ------------------ ----------------- ------------------
Denver                         14,925              -9.2%             -11.1%
                  ------------------ ----------------- ------------------
Houston                        26,038              -5.0%             -11.7%
                  ------------------ ----------------- ------------------
Jacksonville                   10,602              -2.2%             -12.8%
                  ------------------ ----------------- ------------------
Las Vegas                      11,391              -1.4%             -50.0%
                  ------------------ ----------------- ------------------
Los Angeles                    37,128              -2.1%             -50.6%
                  ------------------ ----------------- ------------------
Miami                          46,201                -3%             -37.3%
                  ------------------ ----------------- ------------------
Minneapolis-St.
Paul                          18,123                -9%             -22.7%
                  ------------------ ----------------- ------------------
Norfolk/Virginia
Beach                         10,679              -4.3%              -3.4%
                  ------------------ ----------------- ------------------
Orange County                   7,095              -5.3%             -37.3%
                  ------------------ ----------------- ------------------
Orlando                        21,056               -.5%             -33.9%
                  ------------------ ----------------- ------------------
Philadelphia                   30,561              -6.9%             -17.3%
                  ------------------ ----------------- ------------------
Phoenix                        32,139               1.4%             -38.6%
                  ------------------ ----------------- ------------------
Raleigh/Durham                 13,715              -3.8%              -9.1%
                  ------------------ ----------------- ------------------
Richmond                        8,042              -5.8%              -1.6%
                  ------------------ ----------------- ------------------
Salt Lake City                 14,791              -3.7%             -11.2%
                  ------------------ ----------------- ------------------
San Francisco Bay
Area                          13,004             -12.1%             -51.7%
                  ------------------ ----------------- ------------------
Sacramento                     15,533                .1%             -20.4%
                  ------------------ ----------------- ------------------
Seattle                        26,358              -7.9%             -15.8%
                  ------------------ ----------------- ------------------
San Diego                       6,826              -5.1%             -52.1%
                  ------------------ ----------------- ------------------
Tucson                          5,506              -1.8%             -19.5%
                  ------------------ ----------------- ------------------
Washington, D.C.               28,528              -3.4%             -30.5%
                  ------------------ ----------------- ------------------

To view other local market housing conditions, visit ZipRealty's updated blog at: http://ziprealty.typepad.com/marketconditions/. To view all MLS-listed homes across all major metropolitan areas in which ZipRealty operates, visit www.ziprealty.com. For regular updates and housing trends, follow ZipRealty on Twitter at: http://twitter.com/ZipRealty.

About the ZipRealty Housing Inventory Index

ZipRealty pulls data from Multiple Listing Services in most of the major metropolitan areas where the real estate brokerage operates nationally. The data in this report is based on properties listed for sale according to the MLS in the metropolitan areas identified. For December 2009, ZipRealty reported data for 27 total metropolitan areas, which are defined by the brokerage and may differ slightly than standard DMAs. Due to changes to how homes are tracked by local MLSs, data for Bakersfield/Fresno, Calif., and Tampa, Fla., were omitted for December. The company pulls all data on, or about, the last day of the month for each of these markets.

About ZipRealty

ZipRealty is a full-service residential real estate brokerage firm. The Company utilizes its user-friendly Web site and employee real estate agents to provide home buyers and sellers with high-quality service and value. ZipRealty's Web site provides users with access to comprehensive local Multiple Listing Services' home listings data, as well as other relevant market and neighborhood information. The Company's proprietary business management system and technology platform help to reduce costs, allowing the Company to pass on significant savings to consumers. Founded in 1999, the company operates in 36 major markets in 22 states and the District of Columbia. For more information on ZipRealty, visit www.ziprealty.com or call 1-800-CALL-ZIP.