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

business

Colorado bill aims at abandoned properties' sale time

The measure to be introduced next year would allow homes to be occupied more quickly.

By Margaret Jackson
The Denver Post

Posted: 12/23/2009 01:00:00 AM MST

A bill to be introduced in the state legislature next year would cut in half the time it takes lenders to sell abandoned properties.

Gov. Bill Ritter and state legislators announced the bill Tuesday at a news conference at the Clements Community Center in Lakewood. The bill, to be co-sponsored by Reps. Jeanne Labuda, D-Denver, and Dianne Primavera, D-Broomfield, and Sen. Mike John ston, D-Denver, will allow homes to be occupied more quickly so they don't become a safety hazard, a magnet for vandalism and other crimes, or a drain on nearby property values.

"Abandoned properties turn a family-friendly neighborhood into a hazard for children," Ritter said.

Current law calls for a minimum four-month sale process, but many foreclosure sales take seven to nine months to complete.

Currently, when a lender submits the paperwork to start the foreclosure process, the title for the property is still with the mortgage holder, even if the home is abandoned. That means there is no one responsible for maintaining the property, because the homeowner is gone and the home does not yet belong to the lender.

The bill would allow the bank to take over a property faster, giving municipalities and homeowners associations someone to hold accountable for maintenance.

"Before, we didn't discriminate between abandoned and non-abandoned," Ritter said. "When someone moves out and abandons their property, there's no reason not to move (the time frame) up and move it up quickly."

Colorado is on track to top the record of 39,900 foreclosure filings set in 2007 as widespread unemployment makes it harder for borrowers to make their mortgage payments. New foreclosure filings statewide during the third quarter reached a record high of 12,468, according to a report released last month by the Colorado Division of Housing. New filings for the first nine months of the year were up 18 percent to 35,112.

The number of completed foreclosures grew to 5,618 in the third quarter, the second consecutive quarter- over-quarter increase. But the total number of completed foreclosures fell to 14,971 during the first three quarters, compared with 16,265 during the same period last year.

The legislation would complement the $5.8 billion federal Neighborhood Stabilization Program designed to help foreclosure-blighted neighborhoods.

"More folks are fighting hard to maintain their mortgages," Johnston said. "The next critical step is to protect neighborhoods."

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com

Read more: http://www.denverpost.com/technology/ci_14052416#ixzz0b5LcQ1R3

Home sales jump in West

Monday, November 2, 2009, 8:52am MST | Modified: Monday, November 2, 2009, 8:53am

Realtors: Home sales jump in West

Denver Business Journal - by Jeff Clabaugh Washington Business Journal

A key measure of U.S. home sales rose for the eighth consecutive month in September, the longest streak since 2001, with growth strongest in the West, a region including Colorado.

The National Association of Realtors' index of pending sales of existing homes rose 6.1 percent in September. Pending sales are up 21.2 percent from a year ago, the largest annual increase on record, the NAR says.

In the western states, including Colorado, pending sales in September were up 10.2 percent over August and up 23.7 percent over September 2008.

"What we are witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," said NAR chief economist Lawrence Yun. "Home values will stabilize sooner rather than over-correcting."

Existing home sales, which make up the vast majority of home sales, are leading the recovery. Reports last week said sales of new homes fell 3.6 percent in September,while existing home sales jumped 9.4 percent.

Existing home sales were at a two year high in September. New home sales are down nearly 8 percent from a year ago.

The NAR predicts new home sales will continue to lag as home builders hold back production to drive down inventory. New home construction also continues to be hampered by an ongoing credit crunch for construction loans.

Click here for the NAR's full home-sales report and a video.

All contents of this site © American City Business Journals Inc. All rights reserved.