Foreclosures skyrocketing in Colorado
By John Rebchook
Rocky Mountain News
July 18, 2003
Metro-area job losses are factor in crisis, experts say
To no one's surprise, real estate foreclosures in the metro area continue to soar.
In the first six months of the year, there were 4,340 foreclosures in the seven-county area compared with 3,134 in the first half of last year, a 38.5 percent increase.
And counties with relatively few foreclosures showed the largest percentage increases.
Broomfield County foreclosures jumped by 80 percent, but only 54 were filed.
And Boulder County's foreclosures rose by 61.6 percent, but it had only 223, less than one-fifth of those in Arapahoe and Denver counties.
Jim Wills, chief deputy public trustee at Boulder, noted there was a 73 percent increase in foreclosures in the second quarter.
The latest trend is that more people are unable to hold on to expensive homes, he said.
"Last year, we saw almost no homes above $250,000 go into foreclosure," Wills said. "Now, 20 percent or 30 percent of our properties are above $300,000. We had one $970,000 home, but that was a bit of an anomaly. But we're starting to see a number of $400,000 and $600,000 homes go into foreclosure."
He said a few years ago, it wasn't unusual to find couples in their late 20s and 30s pulling down combined incomes of $200,000 or more.
"A lot of us live up to our means," he said. "Now, one or both of them may have lost their job, and they can't sustain their lifestyle."
The loss of jobs is slowing the home sales market, he said, making it more difficult for people who are underwater to sell their houses.
Byron Koste, head of the University of Colorado Real Estate Center at Leeds School of Business in Boulder, said that many people believe Boulder is immune to economic laws.
"There's this wonderful myth that you can't lose in Boulder," Koste said. "I hear it every day. Literally, they come up with a 'special paradigm' to describe the Boulder economy. Well, there ain't no special paradigm in Boulder."
He said not only did people overpay for the base price of their home, but many owners refinanced to "add all of the bells and whistles" to their houses, which now are worth less than the loan amounts.
Mike Rinner, of the Genesis Group, which tracks Front Range housing, said the average price of a home sold in the first quarter in Boulder County was $342,635, the highest in the seven-county metro area. The monthly data from MetroList doesn't include most of Boulder County.
Rinner said he suspects most people losing expensive homes in Boulder County did not just lose their jobs.
"They probably lost their job one or two years ago and just now are having to admit defeat, and their houses are going into foreclosure," he said.
The foreclosure crisis isn't limited to Boulder.
"Probably in 25 percent to 30 percent of my listings, people are upside down," said Sunny Banka, owner of Sunny Homes & Associates, a Metro Brokers office in Aurora.
Banka, who primarily works the southeast Aurora market, said she's seeing houses facing foreclosure that range from $80,000, one- bedroom condos to houses priced as much as $400,000.
"Most of them are dealing with a loss of jobs and not being able to get a job paying the same salary," she said. "Another problem is these 125 percent loans. People refinanced and were listening to lenders who were able to get appraisals for unrealistic amounts."
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