Colorado real estate was hit especially hard during the first wave of the economic recession, especially towards the end of 2008. Although economics remains far from an exact science, this most likely is a result of a large number of so-called “sub-prime” mortgages, essentially loans with an exceptionally high rate of risk. This situation was exacerbated by the presence of especially expensive homes in ski resort communities such as Aspen, where individuals who could not otherwise attain a loan sufficient for purchasing an expensive house were granted that opportunity by predatory lenders and sub-prime loans. Once given this chance, a number of persons took the proverbial leap and bought a property far beyond their means.
At the advent of the recession, many of these people lost their investments and/or jobs, rendering them incapable of making their mortgage payments. This resulted in Colorado having the fifth highest rate of foreclosures in the United States. According to Realty Trac, Incorporated, “The state saw 66,795 foreclosure filings on 50,396 properties in 2008, for a rate of 2.41 percent of Colorado homes. There was a glimmer of hope in this report, however, which pointed out that the rate of growth in foreclosure filings was slower than the national average.
About half a year later, in June of 2009, the Northern Colorado Business Report noted that “Colorado's foreclosure activity dipped slightly...putting it at Number 9 on the list of states with the highest foreclosure rates.” Concurrently, the Pikes Peak Association of Realtors reported that home sales in the first part of Summer 2009 rose slightly over Summer 2008 figurers, indicating that the Colorado real estate may potentially be experiencing the first effects of the federal stimulus designed to encourage first-time home buyers. Broker Associate Rick Van Wieren noted that the 8000 dollar tax credit offered by the government was the most likely cause for the fortunate upturn in home sales. On the other hand, the economic benefits of the uptick are arguable, because the homes that were sold were considered potentially undervalued, at least according to numbers reported by the Colorado Springs Gazette.
This Colorado market update was provided by Good Life Homes and their team.