Denver’s foreclosure rate only 0.3%

Highlights:

• CoreLogic releases U.S. foreclosure report.
• Denver’s foreclosure rate as low as anywhere.
• Rising home prices keeping Denver’s foreclosure rate super low.

If you watch the popular and entertaining Fix or Flop show on HGTV, you might think similar opportunities exist in Denver for making big bucks on buying foreclosed homes.

Good luck.

The foreclosure rate in the Denver area is as low as any major metropolitan area in the county, according to a report by CoreLogic, which owns the closely followed Case-Shiller index.

A mere 0.3 percent of the homes in the Denver-Aurora-Lakewood area were in foreclosure in June, according to the latest CoreLogic report.

The national foreclosure rate is 1.2 percent, the lowest level since 2007.

Higher housing prices, employment gains, and declines in loans made since 2009 are responsible for the falling foreclosure rate, according to Frank Nothaft, chief economist for CoreLogic.

“The decline has not been uniform geographically, as the foreclosure rate varies across metropolitan areas. In the Denver and San Francisco areas, the foreclosure rate has fallen to 0.3 percent, whereas in the Tampa market the rate is 3.5 percent and in Nassau and Suffolk counties it is an elevated 4.8 percent,” Nothaft.

For all of Colorado, the foreclosure rate was 0.4 percent in June. Only Alaska, at 0.3 percent was lower. Other states with a foreclosure rate of 0.4 percent in June include Utah, Arizona, Minnesota, Montana, Nebraska and North Dakota, according to CoreLogic.

While a decade ago, Denver was the poster child for foreclosures, as many consumers were losing their homes locally before the subprime mortgage collapse sent the U.S. economy into its worst tailspin since the Great Depression, those days are long behind us.

Denver was one of the first cities to recover from the Great Recession, with home prices hovering near record prices.

Unfortunately, in every market some people will always have trouble paying their mortgages because of a family situation such a divorce, loss of a job, or health reasons, noted independent real estate Gary Bauer.

However, even in those circumstances, most people can sell their homes for a profit, he sai.

“With Denver being No. 1 in the nation as far as appreciation, and with this continuing demand for houses at a time when our supply remains low by historic standards, today most homes can be sold at a price point where  effectively it has no negative impact on the homeowner,” Bauer said.

Greg Geller, chairman of the Denver Metro Association of Realtors, agreed.

“Denver is the hottest market in the nation,” Geller said.

Not only have home prices rising, but borrowers tend to be more financially strong than anytime in the past, he said.

On top of more stringent underwritng, home values have risen so much, so fast, that most homes can be sold for more than the mortgage amount, he said.

“If you bought a home in the past two years, it is pretty hard to lose it in foreclosure,” said Geller, principal of Vision Real Estate.

“Heck, if you bought a home a year ago, it almost certainly is worth so much more today that you don’t need to worry about a foreclosure,” he said.

The longer you have owned the home, the more insulated you are from a foreclosure, he said.

“If you bought a home in 2012 for $300,000, today it is probably worth $350,000 and in many cases it may be worth $385,000,” Geller said.

“The reality with lenders being stricter and with home appreciation, there is very little risk of a home in Denver ending up in foreclosure today,” Geller said.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com.DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.