In Colorado they’re bucking the trend like they have so many times when it comes to the housing market. Sales have shown an improvement, despite the weak national economy, but they aren’t anything like they need to be to drive a full-fledged recovery.
Home sales have driven a stronger market in Denver during the summer, which is typically the busiest time of the year for residential sales, but most of it was due to foreclosures and bank assisted short sales. Discount priced properties are having a major impact on the region. Unemployment still troubles the Denver metro area, despite having one of the better jobless rates for any urban area in the U.S.
However, as a result of foreclosures home values are still moving lower in Denver, which is projected to last through at least the end of 2011. Until more workers are hired back home sales will remain slower and put pressure on home prices. Colorado usually adds lots of workers to the work force in leisure and hospitality jobs during the summer, but the net difference only accounted for slightly more than 7,200 jobs over the summer demonstrating further weakening in the regional economy.
Healthier employment gains over time will propel the Denver housing market to recover sooner than many other areas of the nation, but the surplus inventory of foreclosures and a back log of homes in the shadow inventory will make it difficult for quite sometime. The Mile High City is forecast to experience 8.7% home price deflation in 2011.
In nearby Aurora, the market should move into a recovery sooner than larger Denver. Home sales should be pushed by demand over the next several years as more and more people look for deals in areas outside of urban centers. But the foreclosure crisis has hit Aurora hard, and that will impact home values for a longer period of time than what Housing
Predictor first projected at the beginning of the year. Aurora is forecast to see average home prices decline 9.2% by years end.
The market is slipping in smaller Boulder downstate, where foreclosures are starting to become more common. A bulging inventory of discount priced properties can’t be helped enough by a worrisome economy. The market has been helped through the years by a savvy group of investors and entrepreneurs who make Boulder their home, but tougher economic times are having an influence on the market to drive home prices lower. Boulder is forecast to see average home values drop 5.9% in 2011.
Colorado Springs saw home sales improve during the federal government’s tax credit like most other areas of the country, but concerns over the economy and declining home values have set the market back with slower home sales. The driving force behind better residential sales is jobs and that will have to improve before the market does. Colorado Springs housing prices are forecast to deflate an average of 5.4% by years end.
Natural gas reserves have taken Grand Junction out of the near complete downturn that the community was in when lenders practically turned off the loan valve at the height of the financial crisis. However, other sectors of the economy remain troubled in Grand Junction, which should still see growth over the long term as a result of natural energy driving new workers to the area. The momentum should last well into the decade and provide at least some price growth in housing values this year – forecast at a better 2.3%.