Investing in single-family and duplex foreclosures in Colorado, particularly in Colorado Springs is still workable despite the slowdown in foreclosure activity both statewide and citywide in April.
Foreclosure filings increased statewide in April, but the month-over-month increase rate was much lower than the increase rate in March. The March-April increase was 2.1 percent, far below the February-March increase of 21.3 percent.
During the month, foreclosure postings in El Paso County, where Colorado Springs is situated, reached a total of 477, based on records from the office of the El Paso County Public Trustee. The number signified some sort of stabilization, as it was down by only 3 units from 480 one year earlier and up by only 7 units from 470 in the previous month.
In the first 4 months of this year, a total of 1,688 units were added to distressed units available for Colorado Springs foreclosure investing, although down from 1,696 units one year earlier. This number included pre foreclosures and repossessions. Homes that were not yet repossessed can be considered for investment, as more homeowners have been using short sales to resolve their mortgage problems.
In addition to the federal incentives for short sales under the Home Affordable Foreclosure Alternatives program, financially troubled homeowners have figured they can restart again and repair their credit score more quickly if they lose their homes to short sales instead of losing them to foreclosures.
Based on statements from the public trustee of Colorado Springs, single-family and duplex foreclosures and multifamily foreclosures are expected to reach a total of around 4,900 filings in 2010, which would be lower by about 10 percent than the 5,470 filings counted in 2009.
Local analysts said that the housing sector experienced signs of improvement in April, such as significant increase in home building permits and surge in tax collections, in addition to the slowdown in the pace of foreclosures.
The Pikes Peak Regional Building Department reported that the number of permits issued for single-family home construction spiked by almost 70 percent to a total of 127 permits in April compared to the total one year earlier. For the first 4 months, a total of 535 permits were issued, about two times the total during the same four-month period last year.
The increase in home construction helped push up tax collections, as sales taxes from construction materials increased. Total tax revenues, however, were still way below collection levels in the years before the housing crisis.
Real estate business people engaged in foreclosure investing in Colorado can still expect opportunities to choose the cheapest foreclosed homes for sale as nearly 6,400 homes in the state entered foreclosure in April, up by more than 2 percent from March and up by more than 16 percent from April last year. Of these homes, a total of 2,147 units or 33.6 percent were already bank owned.
In the first four months, a total of 22,405 homes in Colorado entered foreclosure, including 7,450 units of single-family and duplex foreclosures and multifamily foreclosures.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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