Boulder News

HOUSING MARKET SHUFFLE

Housing in the Rockies: Is Colorado’s Present the Ghost of Utah’s Future

By Headwaters News, 4-21-06

The housing market has been good — really, really good — to many people in the West in recent years. A market long stagnant climbed to double-digit growth in many places, and has stayed there for a long time. Low interest rates and a plethora of new and creative mortgage choices allowed many more people to buy homes and make substantial profits from them in just a few years. It’s not that everyone was able to buy and profit in the housing market, but the idea of affordability definitely changed.

That story continues in many Western towns. But in some places, the repercussions of that boom are starting to manifest. For example, the Salt Lake Tribune reports today that the housing market along the Wasatch Front is on fire, but the Denver Post reports that foreclosures on mortgages in Colorado and Denver have escalated to the highest rate in the nation.

Both states have cities that are major urban hubs in the region, state capitals and industry centers. And despite the tech bust in the late 1990s that almost shut down growth in Denver, both towns are still expanding at healthy rates. So what happened in Colorado?

According to reports from RealtyTrac, a provider of foreclosure listings, one in 339 homes in Colorado is in foreclosure. As well, reports the Post, the number of unsold houses in the Denver metro area has increased from 23,000 to more than 27,000 in the last year. And if buyers don’t step up to purchase those houses, lenders will be forced to drop the prices to below market value.

Meanwhile, reports the Tribune, house in the Salt Lake City metro area are selling at or above asking price in days, sometimes hours, and sometimes sight-unseen by out-of-state investors. Home prices in Salt Lake County are up 16 percent, 14 percent in Utah County and 10 percent in Davis County. Housing experts say these are healthy numbers— high enough to keep the market powering along but not so high that a bust is imminent.

The only problem, the Tribune reports, is that lower-priced houses (in that market, that is around $200,000, give or take $50,000) are becoming fewer and sell so quickly that people who need to shop in that range have trouble finding anything. Still, with interest rates on the rise, many people are finding their way into homes in the Wasatch Front.

But in the next few years, will those who squeaked in, as it seems so many did in Colorado, be forced to squirm their way out — does Colorado’s current housing market portend what’s to come in Utah’s markets?

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