Quarterly Market Summary Overview
Our quarterly real estate market summary for Denver/Aurora shows many promising trends that point towards a very busy active spring and summer. Colorado has been quite fortunate in that many areas did not see the same types of foreclosure rates, declined property values, and other negative factors at the same level and intensity that plagued many areas of the country. As a result, our upcoming season trends and predictions are strongly reinforced by our existing stability over many areas of the country. The Denver/Aurora region continues to be on the positive equity of the growth.
Median price and one-year price growth trends are all up-sloping. This trend began in the 4th quarter of last year. The biggest price climb in median price took place between September and October of 2012. It jumped a whopping average of $50,000. Even if this rate slows as projected, the median real estate prices will continue to rise steadily. An indicator that the best price-points and purchase opportunities exist right now going into the summer. The total overall 3-year price appreciation, (14.2%), for the Denver/Aurora area, is nearly 10% over the national average.
Our local economic outlook looks excellent regarding the employment horizon. It drives a strong demand for local real estate supply-and-demand. Employment has held up and appears to be on an upward trend for the Denver metro area. Our unemployment rate remains consistently below the national average. The employment sectors seeing the strongest gains in the last quarter are Education and Health Services, Trade/Transportation and Utilities and Leisure and Hospitality.
Construction numbers are seeing spritely gains. The downward slump in local housing permits occurred between June of 2006 and December of 2009. Since 2009, there has been a slow, upward trend. This number is also expected to climb, but at a slower rate going into the second quarter of 2013.
Foreclosures and Bankruptcy Rates
The Colorado total foreclosure rate continues to remain significantly lower, by an average of 3%, than total foreclosure numbers for the rest of the United States.
To the subject of mortgages and mortgage types, one could easily draw the conclusion. Part of the overall market stability is attributed to the fact that we have a lower quantity of sub-prime loans than the rest of the United States. In addition, one can draw a correlation between the mortgage delinquency rates and the number of sub-prime loans issued. Once again, our numbers are better than the national average.
An important trend occurred in 2011 regarding our real estate affordability statistics. Affordability examines the ratio of local mortgage servicing costs against income. Our numbers indicate that we are historically strong in this area. We saw an improvement, especially in the 3rd quarter of 2012. This summary shows that we are more affordable than most markets, which is great news for both buyers and sellers.
Another strong economic indicator locally is that the number of personal bankruptcy filings and credit defaults dropped significantly between 2011 and 2012 and still remains about 3% below the national average.