Greeley Colorado, and Weld County lead the nation in foreclosures back in 2006. There was a tremendous amount of building in the area, and simply not enough buyers to support the new construction. Fast forward ten years later to 2016, and it is a completely different story in Greeley. Northern Colorado has very few foreclosures and the real estate market is one of the hottest in the nation. I am a Realtor, who specializes in listing foreclosures for banks and HUD (department of Housing and Urban Development). I can tell you from first-hand experience, there are much fewer foreclosures in the area and the market is going crazy. In this article I will discuss why there are less foreclosures, how many less foreclosures there are, and what the future might bring for housing in Northern Colorado.
How many foreclosures are there in Greeley and Weld County in 2016?
Back in 2006 when Weld County and Greeley was the epicenter for foreclosures, 1 out of 66 homes was in some sort of foreclosure action. Either the home had been foreclosed on, or the foreclosure process had started. There were thousands and thousands of homes in foreclosure and that caused the market to decrease in value. Surprisingly, the real estate market did not tank as bad as many other locations like California, Arizona, Florida or Las Vegas. However, we did see market values decrease 25 percent or more in Greeley and Weld County. Some neighborhoods and towns saw values decrease more and some less.
The market has more than recovered since the housing crisis, and is now much higher than it has ever been. Median values in Greeley were around $180,000 before the housing crisis and currently the median values are around $250,000. With rising prices, an improved economy and little inventory in the area, 1 out of 2,833 houses are now in foreclosure in Weld County. The amount of foreclosures in Weld County is 42 times lower in 2016, than it was in 2006! The foreclosure rate in Greeley is even lower with 1 out of every 4,392 homes being in foreclosure. The national average is 1 out of every 1,346 homes is in foreclosure. Colorado, Weld County, and Greeley all have foreclosure rates lower than the national average. RealtyTrac provided this information.
I think these statistics show the market is very strong in Colorado in 2016, but they also show how horrible the market was in 2006.
Why are there so many fewer foreclosures in Greeley Colorado?
There are a number of factors that caused the increase in foreclosures ten years ago. There was a huge building boom, it was easy for many people to get a loan with bad credit and little money, many people used adjustable rate mortgages to qualify for a more expensive home, and there was a lot of builder fraud in the area. Many of those factors have been cleaned up.
- It is much harder to commit builder fraud with more stringent appraisal guidelines
- Lending guidelines have become much more strict
- Adjustable rate mortgages are still available, but in different forms than previously.
- Building has increased again, but nothing close to the levels we saw from 2000 to 2005.
All of these factors have created a more stable real estate market, with less risk for a housing crash. However, the biggest factor when looking at the foreclosure rate, is the housing value increase in the area. During the peak of the housing crisis in Colorado, people were losing their home because they bought it for more than it was worth. If they got behind on their payments, or ran into financial trouble, they could not sell their home. With housing prices so high in 2016, the homeowners who run into financial problems are able to sell their house and maybe even make some money, because it is worth more than they paid for it.
Will we see another huge building boom and more foreclosures?
I cannot predict the future, but I could see signs of the last housing crisis, before it happened. I was not the only one, many people in the industry thought the lending practices were a little crazy and the building was not sustainable. I believe the market today is much different. Although there is more new construction in the area, there is not nearly as much building going on as there was in the past.
- Financing new construction has become tougher
- Many builders went bankrupt after the housing crisis and changed careers or are scared to build again
- Builders and investors are still a little worried the increased housing prices are not sustainable
Because there is less building going on, there is still very little inventory in the area, and housing prices continue to rise. Supply and demand is causing this housing boom, not questionable lending tactics. The market could slow down and prices could even decrease, but I do not see another housing crisis anytime soon.
The foreclosure rate in 2006 was extremely high in Greeley, and Weld County. I believe those foreclosures were a product of many factors that do not exist today, and that is why we have so few foreclosures in 2016. I am not sure our market will continue to increase in value at 10 or 15 percent a year, but it feels like a much more sustainable market that before the housing crash.