Steady Rise in Colorado Foreclosure Properties Foreshadows 2008 as Another Hard Year

21 February 2008

Author: admin Posted under Foreclosure homes

Colorado foreclosure homes have long been some of the most plentiful in the nation. Over the past few years, the widespread presence of expensive adjustable rate mortgages combined with foreclosure laws on the books that make it very easy for lenders to pursue foreclosures have combined to make Colorado’s foreclosure rate one of the worst in the nation.

But now new statistics recently revealed just how bad the situation is in this picturesque mountain state. From the end of 2006 to the end of 2006, the total number of foreclosure filings rose 40%, to a figure of nearly one in ever 45 households in Colorado entering into some stage of the foreclosure process. This rate is exceedingly high, even compared with states of similar populations.

Another telling statistic shows that during the same period, the number of homes that ended up being sold off through foreclosure sales rose 45%. This means that not only are more homes entering into the early stages of foreclosure, but more homes are going through the entire process and being sold off, suggesting homeowners are finding it harder than ever to find ways to get out of debt. With the economy struggling and a recession expected by many economists, it seems that the housing and foreclosures market is only primed to get worse as the year progresses, and this is becoming a big concern for lawmakers and residents of Colorado.

There has been a lot of new development in the past decade in the state, especially in the capital city of Denver and along the front range. Many of these new properties were bought by investors or new homeowners with adjustable rate mortgages, which offer low initial costs. But with many rates now adjusting and subjecting the homeowner to sudden spikes in monthly payments, many simply cannot keep up.

Foreclosures were highest in 2007 in the Denver area and Weld County, and this trend is expected to continue for 2008. For foreclosure investors, prices around the state are being driven down with more homes going to market. If you’re considering buying foreclosure homes, try investing in high demand areas like Vail, Durango or Steamboat Springs. Areas like these will offer good discounts, but still provide a better chance for future value should the market take longer than expected to rebound.