Housing deed slowdown signals stalled market

State housing data released Monday suggest a bit of a hiccup in the ongoing recovery of Colorado’s residential real estate market, as the number of mortgage loans paid off in the state fell 13 percent from the first quarter of the year.

Quarterly numbers released by the Colorado Division of Housing show that public trustees in the state reported “releasing” a total of 65,051 deeds of trust in the second quarter of 2012, down from 74,808 in the first quarter of the year.

In most cases, the release of a deed of trust happens when a real estate loan is refinanced, a property is sold, or the final payment on a loan is made.

The numbers through the first two quarters of the year are a marked improvement over the same time period in 2011, however, when the distressed housing market was believed to have cratered.

The numbers over the past decade bear this out. In 2011 Colorado saw the lowest number of deed releases since 2000.

At the current pace, the state is poised for a more than 18 percent increase in deed releases over last year.

True to form, Mesa County swung further than most Colorado counties between the first and second quarters of this year. Mesa County Public Trustee Paul Brown reported 1,502 deeds of trust released in the second quarter of this year, down 18 1/2 percent from the 1,843 reported for the first quarter of the year.

Brown pointed to the general economy being down as the main factor in the quarterly dropoff of the numbers. “I’m hopeful that it will pick up again soon, though,” he said.

A look at the numbers shows just how far off the real estate market is from earlier in the decade. In 2003, for example, Colorado deed of trust releases reached an apex of 733,373. The numbers this year are on pace to reach just under 280,000.

Brown recalled that during the beginning of his tenure as trustee, around 2007, his office was clearing “close to 100 (deeds of trust) a day.”

“Now, it’s close to 100 a week,” he said.

The state housing report makes clear that the number of releases of deeds of trust can be interpreted as a measure of economic activity. Increases in these numbers historically have coincided with periods of increases of refinance activity and home purchases.

But, “declining numbers of releases of deeds of trust can be one indicator of a ‘flat’ or ‘slow’ real estate market,” the report states.


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