Colorado Springs Mortgage Problems Amass as Market Stumbles
There was more bad news Friday for the Colorado Springs housing market: new home construction continued to limp along in November, while foreclosures hit a 17-year high.
Single-family home building permits issued last month in El Paso County totaled a scant 152, a 60.6 percent drop from November 2005, according to the Colorado Springs Gazette. November’s total was the lowest number of permits issued in a single month since 144 in January 1995.
- For the first 11 months of 2006, single-family permits totaled 3,297 in El Paso County, a 33.9 percent decline in new construction compared with the same period last year.
- That puts the county on pace to finish 2006 with about 3,500 permits, which would make it the worst year for new home construction since 1997.
Economist David Bamberger of Bamberger & Associates said the local market is going through a correction as Colorado mortgage decline plummets and those with existing loans are finding it harder to make payments.
The area saw record numbers of single-family home sales in 2004 and 2005 when rock-bottom mortgage rates lured thousands of buyers into the market — some of whom might not otherwise have purchased homes and many of whom used risky loan products to do so.
“We had two years, 2004 and 2005, of record production, and we’re paying the price of borrowing buyers from the future,” Bamberger said. “I suspect it’s going to take somewhere in the order of 12 months or so to work through the catch-up phase, where we can start to see some buyers filling up the pipeline.”
Meanwhile, home loans continued to cause El Paso County residents consternation. Foreclosures in November totaled 269, soaring 71.3 percent over the same month a year ago.
For the first 11 months of the year, foreclosures totaled 2,390 — exceeding last year’s 12-month total of 2,289 and making 2006 the worst year for foreclosures since a total of 2,937 in 1989.
