Home Prices Rose Despite Surge in Denver Foreclosed Homes

Home prices rose despite the surge in number of Denver foreclosed homes in February. The rate of foreclosure activity in the Denver metro area jumped up in February to 2.1 percent, an increase of 0.6 points from the 1.5 percent posted in February last year. The rate of mortgage delinquency also increased to almost 6 percent, up sharply from 4.2 percent in February last year. All these mortgages counted were late by more than three months. Despite the surge in foreclosure postings, the median sales price for single-family houses in the Denver metro area increased by 0.2 percent compared to January and soared by 5.3 percent compared to February last year. Price increases year-over-year were posted in four counties in the Denver metro area: the counties of Denver, Adams, Jefferson and Douglas. Prices in Arapahoe dropped while parts of Douglas posted price declines. Price increases in Denver encouraged market participants as the price median for single-family houses nationwide dropped in February by 0.6 percent month-over-month and fell by 3.4 percent year-over-year. Similar to the impact of foreclosures in the metro area, the increase in number of Denver foreclosed homes in February also did not push down home prices within the city. The median sales price within the city of Denver increased by 3.2 percent from the median in January and climbed up by 11.2 percent from the median in February 2009. The number of foreclosed homes for sale in Colorado dropped in February despite the increase in foreclosure filings from 5,029 units in January to 5,154 units in February. There were 1,719 real estate owned units in February, a drop of 125 units from the 1,782 foreclosures filed in January. As the state of Colorado moved up in the foreclosure rate rankings from 12th place in January to 11th place in February, some analysts contended that housing markets improved much better in other states than in Colorado. However, the state of Colorado ranked among the lowest in mortgage loan default throughout the country in February, according to a firm focusing its studies on mortgage loans. Colorado posted the eighth lowest rate as its percentage of noncurrent mortgage loans in February was only 8.5 percent, much lower than the mortgage default rate of top-placer Florida, which was 23.8 percent. All in all, despite the resiliency of the Denver house price amid foreclosures, the rise in number of Denver foreclosed homes still pushed metro area home prices nearly 8 percent below their peak levels in 2006.