Hope Rises As Foreclosures Dip And Construction Picks Up

August 7th, 2008 | Tags: Foreclosures

There is faint hope rising as foreclosures dip and construction activity picks up. Colorado Springs real estate market is beginning to see light. From a weak June performance, in July the figures gave rise to optimism because for the second running month the number of foreclosures declined.

To take the instance of single-family housing permits – in July 108 were granted. This was a drop of 37.6% from what it was during the same month in 2007 but an increase of 11.3% from June, according to a report released by Pikes Peak Regional Building Department. The increase is notable because it is the first time the curve has moved upward from June to July since the last 6 years.

Mike Fenton of Century Communities LLC (Colorado Springs) comments that perhaps the bottom of foreclosure crisis has been reached. He added that during the first six months of this year the builders were selling more houses compared to getting permits for new ones. The concentration was on selling off the old stocks. Now that the backlog is being cleared the focus is on securing more permits during the last half of 2008.

According to statistics from January to July 2008 there were 881 permits granted. It was a decrease of 42.7% from 2007 during the same period. It appears from trends that this year 1,500 permits will be granted. Since 1991 it will be the lowest number on record. In 1991 1,154 permits had been sanctioned.

Senior economist Fred Crowley of Southern Colorado Economic Forum is of the opinion that all these are indications that the foreclosure crisis has reached its bottom. However the lenders are still cautious about contracting new mortgages and this is making recovery slow. He adds that it will be another year or 18 months before the real estate market begins recovering on the national level. “It may happen here six months earlier here with additional troops arriving at Fort Carson next summer” he said.

According to plans during the next five years about 15,000 troops will be coming in to Fort Carson from the beginning of 2009. This is the largest increase since the Vietnam War. It is expected that most of the soldiers that will be coming, will be living with their families off-post.

In July there were 360 foreclosure postings – an increase of 22% from what it was in 2007. But it is 22.3% less from the total of June, 463. In the county the June numbers created a record.