Saturday, April 05, 2008

Foreclosures in Denver

by Bill McBride on 4/05/2008 12:58:00 PM

Yesterday I posted excerpts from an article about house prices in Denver. The article in the U.S. News & World Report featured a graph showing house prices neighborhood by neighborhood. In some areas prices are flat or rising, in other areas - especially those with signficant foreclosure activity - prices are falling.

The USAToday has an article about those neighborhoods in Denver being devastated by foreclosure: Mortgage defaults force Denver exodus

Foreclosures are ripping through the rows of new homes in the flatlands where Denver turns to prairie. Every week, 10 more families here need to find someplace else to live.
...
This small corner of the Mile High City represents an extreme example of how foreclosures are transforming lives and neighborhoods. On some blocks, as many as one-third of the residents have lost their homes, making this one of the worst hotspots in a city that was among the first to feel the pinch of the foreclosure crisis. Many houses here remain empty, bank lockboxes on the front doors.

The foreclosure epidemic has swept so quickly through this part of Denver that in less than two years, lenders took action on 919 of the roughly 8,000 properties here, according to city records. Their owners defaulted on more than $171 million in mortgages they had used to buy their way out of apartments and into cul-de-sacs.
This is why those looking for a price bottom in Denver are probably too optimistic - there is simply too much supply, and much of the supply is distressed.