(This is an article from The Denver Post, May 25, 2010, reported by Alan Zibel and Martin Crutsinger)
WASHINGTON — Homebuyers rushed to take advantage of government incentives and low mortgage rates in April, giving the housing market its biggest boost in five months.
But now that a homebuyer tax credit has expired, growth in the second half of the year will depend on the lure of historically low mortgage rates and the strength of the economic recovery.
Some economists say mortgage rates alone won't be enough to propel the market.
"Although mortgage rates have fallen sharply, the combination of high unemployment, heavy indebtedness and tight credit suggest to us that demand will stumble," said Paul Dales, an economist at Capital Economics.
Sales of previously owned homes rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million, the National Association of Realtors said Monday. The increase in sales sparked a rise in home prices. The median price for a new home rose to $173,100, up 4 percent from a year ago.
The national numbers are similar to earlier reports on metro area home sales. A record number of homes in the Denver area went under contract in April, according to data released earlier this month.
There were 6,616 homes placed under contract in the metro area last month, a 27.6 percent increase over April 2009, according to data released this month. There were 4,188 residential sales closed last month, up 16.3 percent from 3,602 closings in March and 23.5 percent from 3,390 in April 2009.
Nationally, mortgage rates fell last week to the lowest level for the year and close to 50-year lows as worries over the European debt crisis sent investors rushing into the safety of U.S. credit markets.
But Patrick Newport, an economist at IHS Global Insight, said the key to growth in the housing market won't be low mortgage rates.
"What really will drive sales forward and I mean after July, will be the job market," Newport said. "Having a good mortgage rate helps affordability, but we've had low mortgage rates for a long time now and sales have stayed below 5 million, except when the tax credit was involved."
Denver Post staff writer Margaret Jackson contributed to this report.
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Tuesday, May 25, 2010
Monday, May 24, 2010
Big chill on mountain resort areas' home sales beginning to thaw
(This is an article that appeared in The Denver Post on May 23, 2010 and reported by Margaret Jackson)
The mountain real estate market plunged so far last year that it seemed there was practically no place for it to go but up this year.
Turns out, that perception is proving to be true.
During the first quarter, many resort areas have seen the number of homes sold rise substantially compared with the same period a year ago. While it's a step in the right direction, the market is still not as good as in 2007 or 2008.
"2009 was so rank and so off, it was just scary," said John Helmering, a broker in the Vail Valley. "Realtors in the Vail Valley have been through the worst time period ever in the history of Vail real estate. This is an improvement, but not from 2008."
Still, it's too soon to call the first-quarter rebound a recovery, said Byron Koste, executive director emeritus of the University of Colorado Real Estate Center.
"It's going to slowly recover as people get confident that the wealth erosion that occurred in '08 and early '09 is really behind them, and they're back to making more money," Koste said. "If there is a rebound to that erosion, it may be short-lived. It's not clear to me that we have any reason to be rebounding, other than we all want to rebound."
Still, the improving first-quarter sales have given many mountain real estate professionals a reason to be optimistic.
In Eagle County, which includes Vail and Avon, the number of transactions for the first three months of 2010 rose a whopping 190 percent, to 276, compared with 145 during the same period a year ago. But that's still 27 percent lower than in 2008 and 58 percent lower than in 2007.
Activity should improve with the completion of Solaris, the Four Seasons Residence Club and the Ritz-Carlton Residences this summer, Helmering said.
"Our village and Lionshead are going to be put back together, and I really think that's going to have an impact on people's impression of Vail," he said. "It's been seven or eight years under construction. You couldn't walk down the street without walking around a huge hole in the ground."
Routt County statistics reveal a similar trend, with the number of transactions during the first quarter rising almost 113 percent, to 312, compared with 277 a year ago. Dollar volume in the county, which includes the resort community of Steamboat Springs, was up more than 225 percent to $125.7 million in the first three months, compared with $55.7 million a year ago.
Lending remains tight.
The numbers are approaching the level they achieved during the first quarter of 2008, but are nowhere close to their peak of 2007, when 573 homes sold for a total of $317 million during the first three months of that year.
The challenge, according to broker Mitch Clementson of Steamboat Springs Real Estate, is in getting financing to buy a house.
"In the old days, if they could see the fog when you breathed on a mirror, they'd give you a loan," he said. "But now, especially with the condo projects, they've gotten very strict. You have to have sterling credit, a lot of income and a lot of money to put down."
In San Miguel County, home to Telluride, just 80 homes sold for a total of $89 million during the first quarter, well off the peak years of 2005 and 2006. In 2005, 227 homes sold for $166.1 million during the first quarter. The following year, 183 homes sold for $196.2 million during the same period.
"In my 26 years of being a high-end luxury resort broker in Colorado, we've never seen an adjustment in our market like we have the last two years," said George Harvey, broker/owner of The Harvey Team in Telluride.
The market is likely to improve over the next few years because developers can't get financing to build new projects, Harvey said. But before pricing improves, San Miguel County has an inventory of 795 houses to burn through.
"It's going to be two or three years before a quality developer can get money," Harvey said. "After we go through this inventory, I think there's a chance it could get moderately good again in a couple of years because there won't be any new product."
While first-quarter sales in all of Pitkin County were down compared with a year ago, they increased in the Upper Roaring Fork Valley communities of Aspen, Snowmass Village, Woody Creek and Old Snowmass. So far this year, 79 residential properties have closed, a 49 percent increase over the same period a year ago, said Aspen broker Tim Estin.
"There are some significant bargains here based on trends and prices," Estin said. "I would definitely say the smart money is recognizing that and there are transactions occurring."
Prices haven't rallied.
In Summit County, there were 160 homes sold during the first quarter, a 29 percent increase over the 124 transactions during the same time a year ago. However, the number is still 44 percent less than the 286 deals closed in the first quarter of 2008 and 55 percent off the 360 sales in 2007.
And while sales look like they're on the upswing, pricing is still off compared with a year ago, said Joanne Hanson, a broker with Coldwell Banker Colorado Rockies Real Estate.
"Generally, I tell sellers if you want prime pricing, then wait," Hanson said. "But it could be three or four years."
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
Change in residential transactions from first quarter of 2009 to first quarter of 2010.
EAGLE COUNTY +190%
ROUTT COUNTY +113%
SAN MIGUEL COUNTY +53.8%
SUMMIT COUNTY +29%
PITKIN COUNTY -7.3%
The mountain real estate market plunged so far last year that it seemed there was practically no place for it to go but up this year.
Turns out, that perception is proving to be true.
During the first quarter, many resort areas have seen the number of homes sold rise substantially compared with the same period a year ago. While it's a step in the right direction, the market is still not as good as in 2007 or 2008.
"2009 was so rank and so off, it was just scary," said John Helmering, a broker in the Vail Valley. "Realtors in the Vail Valley have been through the worst time period ever in the history of Vail real estate. This is an improvement, but not from 2008."
Still, it's too soon to call the first-quarter rebound a recovery, said Byron Koste, executive director emeritus of the University of Colorado Real Estate Center.
"It's going to slowly recover as people get confident that the wealth erosion that occurred in '08 and early '09 is really behind them, and they're back to making more money," Koste said. "If there is a rebound to that erosion, it may be short-lived. It's not clear to me that we have any reason to be rebounding, other than we all want to rebound."
Still, the improving first-quarter sales have given many mountain real estate professionals a reason to be optimistic.
In Eagle County, which includes Vail and Avon, the number of transactions for the first three months of 2010 rose a whopping 190 percent, to 276, compared with 145 during the same period a year ago. But that's still 27 percent lower than in 2008 and 58 percent lower than in 2007.
Activity should improve with the completion of Solaris, the Four Seasons Residence Club and the Ritz-Carlton Residences this summer, Helmering said.
"Our village and Lionshead are going to be put back together, and I really think that's going to have an impact on people's impression of Vail," he said. "It's been seven or eight years under construction. You couldn't walk down the street without walking around a huge hole in the ground."
Routt County statistics reveal a similar trend, with the number of transactions during the first quarter rising almost 113 percent, to 312, compared with 277 a year ago. Dollar volume in the county, which includes the resort community of Steamboat Springs, was up more than 225 percent to $125.7 million in the first three months, compared with $55.7 million a year ago.
Lending remains tight.
The numbers are approaching the level they achieved during the first quarter of 2008, but are nowhere close to their peak of 2007, when 573 homes sold for a total of $317 million during the first three months of that year.
The challenge, according to broker Mitch Clementson of Steamboat Springs Real Estate, is in getting financing to buy a house.
"In the old days, if they could see the fog when you breathed on a mirror, they'd give you a loan," he said. "But now, especially with the condo projects, they've gotten very strict. You have to have sterling credit, a lot of income and a lot of money to put down."
In San Miguel County, home to Telluride, just 80 homes sold for a total of $89 million during the first quarter, well off the peak years of 2005 and 2006. In 2005, 227 homes sold for $166.1 million during the first quarter. The following year, 183 homes sold for $196.2 million during the same period.
"In my 26 years of being a high-end luxury resort broker in Colorado, we've never seen an adjustment in our market like we have the last two years," said George Harvey, broker/owner of The Harvey Team in Telluride.
The market is likely to improve over the next few years because developers can't get financing to build new projects, Harvey said. But before pricing improves, San Miguel County has an inventory of 795 houses to burn through.
"It's going to be two or three years before a quality developer can get money," Harvey said. "After we go through this inventory, I think there's a chance it could get moderately good again in a couple of years because there won't be any new product."
While first-quarter sales in all of Pitkin County were down compared with a year ago, they increased in the Upper Roaring Fork Valley communities of Aspen, Snowmass Village, Woody Creek and Old Snowmass. So far this year, 79 residential properties have closed, a 49 percent increase over the same period a year ago, said Aspen broker Tim Estin.
"There are some significant bargains here based on trends and prices," Estin said. "I would definitely say the smart money is recognizing that and there are transactions occurring."
Prices haven't rallied.
In Summit County, there were 160 homes sold during the first quarter, a 29 percent increase over the 124 transactions during the same time a year ago. However, the number is still 44 percent less than the 286 deals closed in the first quarter of 2008 and 55 percent off the 360 sales in 2007.
And while sales look like they're on the upswing, pricing is still off compared with a year ago, said Joanne Hanson, a broker with Coldwell Banker Colorado Rockies Real Estate.
"Generally, I tell sellers if you want prime pricing, then wait," Hanson said. "But it could be three or four years."
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
Change in residential transactions from first quarter of 2009 to first quarter of 2010.
EAGLE COUNTY +190%
ROUTT COUNTY +113%
SAN MIGUEL COUNTY +53.8%
SUMMIT COUNTY +29%
PITKIN COUNTY -7.3%
Wednesday, May 19, 2010
Unemployed? Don't lose hope
The following is an article which appeared in the Summit Daily News, May 18, 2010, by Julie Sutor.
To brighten employment prospects in a tough economy, update your skills and seek help on the job search.
SUMMIT COUNTY — As the resort-driven local job market goes through its annual spring lull, employment prospects for job-seekers may seem especially dismal right now. But for the unemployed, there are a few reasons for optimism, and there are resources available to make the experience less painful.
Summit County's labor force usually shrinks by about 4,000 to 5,000 jobs between March and May each year, according to data from the Colorado Department of Labor and Employment (CDLE). In the last three years, May has been the month with the smallest labor force of the year, with even fewer jobs than in October, when the job force takes its autumn dip. But in June, the number of local jobs begins to grow again.
The most recent data suggests the contraction Summit County's workforce could be slowing. In March of this year, 17,660 workers had jobs in Summit County, just barely behind March 2009, when 17,730 people were in the local workforce.
“While results for March are mixed, the Colorado job market continues to stabilize,” said Donald Mares, CDLE executive director.
Nationally, nonfarm payroll employment in April rose by 290,000, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply, according to the U.S. Bureau of Labor Statistics. Job gains occurred in manufacturing, professional and business services, health care, and leisure and hospitality. Federal government employment also rose, reflecting continued hiring of temporary workers for Census 2010.
That could be good news for Summit County.
“Going into the summer season, our visitor numbers are really going to depend on whether we see a rebound in the national economy,” said Kent Abernethy, labor specialist at the Colorado Workforce Center in Frisco. “But even if the national economy isn't strong, people will take shorter trips, and that tends to mitigate some of the effects for us. People from the Front Range may decide to come up here for special events and other things rather than taking a longer trip.”
Take advantage of the resources
For the unemployed, Abernethy advised looking for work in sectors where job growth is likely, especially when workers can adapt their existing skills to a new setting or complement their skills through a little training. The Workforce Center offers workshops to help job seekers change careers and identify the skills they'll need to do it.
Abernethy suggests, “learning the shades of green available in an existing career. Electricians can learn to put in a solar photovoltaic system. Civil engineers can learn to set up a smart-grid system.”
The Workforce Center also offers skills assessments, which can help a worker identify which skills will transfer from a weak job sector to a strong one.
“You can see how your skills transfer, where the gaps are and what training you need to make the leap,” Abernethy said.
Some workers who have been laid off may even qualify for financial help with job-training or tuition.
Job seekers can also use the Workforce Center during a job search.
“If you've been in the workforce for 15 years, things have really changed dramatically since the last time you looked for a job. It's much more Internet-based, so you want to access good websites and get registered as a job seeker,” Abernethy said.
Workforce Center staff can also receive help with writing a resume and honing interview skills.
To brighten employment prospects in a tough economy, update your skills and seek help on the job search.
SUMMIT COUNTY — As the resort-driven local job market goes through its annual spring lull, employment prospects for job-seekers may seem especially dismal right now. But for the unemployed, there are a few reasons for optimism, and there are resources available to make the experience less painful.
Summit County's labor force usually shrinks by about 4,000 to 5,000 jobs between March and May each year, according to data from the Colorado Department of Labor and Employment (CDLE). In the last three years, May has been the month with the smallest labor force of the year, with even fewer jobs than in October, when the job force takes its autumn dip. But in June, the number of local jobs begins to grow again.
The most recent data suggests the contraction Summit County's workforce could be slowing. In March of this year, 17,660 workers had jobs in Summit County, just barely behind March 2009, when 17,730 people were in the local workforce.
“While results for March are mixed, the Colorado job market continues to stabilize,” said Donald Mares, CDLE executive director.
Nationally, nonfarm payroll employment in April rose by 290,000, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply, according to the U.S. Bureau of Labor Statistics. Job gains occurred in manufacturing, professional and business services, health care, and leisure and hospitality. Federal government employment also rose, reflecting continued hiring of temporary workers for Census 2010.
That could be good news for Summit County.
“Going into the summer season, our visitor numbers are really going to depend on whether we see a rebound in the national economy,” said Kent Abernethy, labor specialist at the Colorado Workforce Center in Frisco. “But even if the national economy isn't strong, people will take shorter trips, and that tends to mitigate some of the effects for us. People from the Front Range may decide to come up here for special events and other things rather than taking a longer trip.”
Take advantage of the resources
For the unemployed, Abernethy advised looking for work in sectors where job growth is likely, especially when workers can adapt their existing skills to a new setting or complement their skills through a little training. The Workforce Center offers workshops to help job seekers change careers and identify the skills they'll need to do it.
Abernethy suggests, “learning the shades of green available in an existing career. Electricians can learn to put in a solar photovoltaic system. Civil engineers can learn to set up a smart-grid system.”
The Workforce Center also offers skills assessments, which can help a worker identify which skills will transfer from a weak job sector to a strong one.
“You can see how your skills transfer, where the gaps are and what training you need to make the leap,” Abernethy said.
Some workers who have been laid off may even qualify for financial help with job-training or tuition.
Job seekers can also use the Workforce Center during a job search.
“If you've been in the workforce for 15 years, things have really changed dramatically since the last time you looked for a job. It's much more Internet-based, so you want to access good websites and get registered as a job seeker,” Abernethy said.
Workforce Center staff can also receive help with writing a resume and honing interview skills.
Wyoming Nervous about Colorado River Demand
The following is a reprint of an article that appeared in the Summit Daily News, May 18, 2010, by Ben Neary, Associated Press Writer.
GREEN RIVER, Wyo. — Wyoming has an unusual problem among the states in the Colorado River system: lots of water and, other than supporting some fine trout fishing, no way to put a significant amount of it to use.
Yet increasing demand for water in the upper Colorado River basin, combined with new government predictions that climate change could reduce future water supplies, are ratcheting up concerns in Wyoming about how to preserve the state's share for the day when it's needed.
People in southwestern Wyoming are particularly concerned about two proposals to tap the Green River, and the Flaming Gorge Reservoir it feeds, to help supply Colorado's populous Front Range.
The Green River, a major tributary to the Colorado River, flows from the craggy heights of Wyoming's Wind River Range into Flaming Gorge Reservoir and on into Utah before it takes a brief turn into western Colorado.
Les Tanner makes his living on the recreation and tourism at Flaming Gorge Reservoir, where he has owned the Buckboard Marina since 1969.
“It's a good fishery; boating is good. It's just an all-around good recreational lake,” Tanner said while working on his dock on a recent spring day. “If they stop the flow of good water coming into this lake, all we're going to have is a stagnant pond.”
Wyoming has been using about 525,000 acre feet from the Green each year — about 73 percent of what has been the state's typical annual Colorado River Compact allocation of 833,000 acre feet. An acre foot is the amount of water that covers an acre to a depth of 1 foot.
The Colorado River Compact of 1922 essentially divides the basin's water, giving 7.5 million acre feet annually to the upper basin states of Colorado, New Mexico, Utah and Wyoming, and an equal amount to the lower basin states of Arizona, Nevada and California.
The upper basin states apportion their share among themselves. Colorado gets nearly 52 percent, New Mexico just over 11 percent, Utah 23 percent and Wyoming 14 percent.
If there's not enough water in the system for both the upper and lower basins to get their full 7.5-million acre foot share, the upper basin states still must deliver the full amount on average to the lower basin. The upper states then divide what's left according to their percentage formula.
Wyoming, a state of roughly 540,000 people, doesn't expect to use its full share of Colorado River water over the next 30 years even under the most ambitious growth scenarios. However, Phil Ogle of the Wyoming Water Development Office said his office is working on a new study of whether drier conditions could reduce the water supply in the Green River Basin.
Harry LaBonde, deputy Wyoming state engineer, said Wyoming's surplus draws attention from parched states downstream.
“There's no doubt that if you are using the water, you're more secure,” LaBonde said. “But the whole reason that Wyoming has entered into the Colorado River Compact and the Upper Colorado River Compact is to preserve its ability to use a certain allocation of water.”
Aaron Million, a Fort Collins, Colo., businessman, has applied for permits to build a private, multibillion-dollar pipeline from the Green River in Wyoming to Colorado. He has identified several Colorado agricultural interests that say they want more water and says the pipeline would also serve some customers in eastern Wyoming along the way.
Million's application spurred a coalition of Colorado municipalities to propose a 500-mile pipeline project of its own. The coalition is years behind Million's project in seeking federal and state approval.
Local governments in southwestern Wyoming have mobilized to fight both pipeline projects. The cities of Green River and Rock Springs and the counties of Sweetwater, Uinta, Sublette and Carbon oppose any draw from the Green, said Green River Mayor Hank Castillon.
Castillon's city recently invested millions in a kayaking course and walkways along the river that courses through town. Castillon fears that taking water from the river or the lake would hurt tourism, recreation and limit the town's future economic development.
The main question, Castillon said, is whether the State of Colorado has the right to draw any more water out of the Colorado River system.
Colorado's official answer to whether it has the right to more water seems to be “maybe.”
Ray Alvarado, spokesman for the Colorado Water Conservation Board in Denver, said his state is currently using between 2.3 million to 2.6 million acre feet of water under its share of the Colorado River.
How much more Colorado is entitled to isn't known, Alvarado said. But he said it's possible the answer could be none.
A new draft study by the Colorado Water Conservation Board concludes Colorado can draw between zero and 1 million acre feet more per year over the next 30 to 60 years, depending on climate change and other states' consumption, Alvarado said.
Colorado, meanwhile, estimates its population will rise from 5 million to 7.1 million people by 2030.
Both Million and the municipalities say Colorado's unused share of Colorado River water is adequate to meet the demands of their pipeline proposals, which would count against Colorado's share.
Million has applications pending with the Wyoming State Engineer's Office to divert some 250,000 acre feet of water a year from locations near the town of Green River and from Flaming Gorge Reservoir. He said he plans to modify his application to take all the water below the town to minimize environmental effects.
The U.S. Bureau of Reclamation, which operates Flaming Gorge Reservoir, estimated a few years ago that the reservoir could supply a pipeline drawing 165,000 acre feet a year over 40 years combined with other projected water uses. After 2050, as development in Wyoming increases, the bureau study projected the reservoir could sustain an annual diversion rate of 120,000 acre feet.
Bureau officials say they're revising their report and say it may well conclude even less water is available for any pipeline project.
Yet Million said he remains optimistic.
“We fully anticipate the surpluses in the system will be there that will allow the project to move forward with full protection of Flaming Gorge and the river below,” Million said. “And if they're not, the project shouldn't and will not go forward.”
The states of Wyoming and Colorado will participate in a U.S. Army Corps of Engineers environmental review of Million's project. The agency says it plans to have a final report on the project by 2014.
Wyoming's surplus water situation has worried state lawmakers for years.
“At some point are they simply going to say, 'You didn't use it, and when you didn't use it, you lost it,”' said Republican Rep. Kermit Brown of Laramie.
Yet Alexandra Davis, assistant director for water at the Colorado Department of Natural Resources said she doesn't believe development in Colorado places Wyoming's water is at risk because allocations are based on percentages of available water.
“Colorado doesn't get to say, 'Well we developed ours, therefore, Wyoming, you don't get yours,”' Davis said.
GREEN RIVER, Wyo. — Wyoming has an unusual problem among the states in the Colorado River system: lots of water and, other than supporting some fine trout fishing, no way to put a significant amount of it to use.
Yet increasing demand for water in the upper Colorado River basin, combined with new government predictions that climate change could reduce future water supplies, are ratcheting up concerns in Wyoming about how to preserve the state's share for the day when it's needed.
People in southwestern Wyoming are particularly concerned about two proposals to tap the Green River, and the Flaming Gorge Reservoir it feeds, to help supply Colorado's populous Front Range.
The Green River, a major tributary to the Colorado River, flows from the craggy heights of Wyoming's Wind River Range into Flaming Gorge Reservoir and on into Utah before it takes a brief turn into western Colorado.
Les Tanner makes his living on the recreation and tourism at Flaming Gorge Reservoir, where he has owned the Buckboard Marina since 1969.
“It's a good fishery; boating is good. It's just an all-around good recreational lake,” Tanner said while working on his dock on a recent spring day. “If they stop the flow of good water coming into this lake, all we're going to have is a stagnant pond.”
Wyoming has been using about 525,000 acre feet from the Green each year — about 73 percent of what has been the state's typical annual Colorado River Compact allocation of 833,000 acre feet. An acre foot is the amount of water that covers an acre to a depth of 1 foot.
The Colorado River Compact of 1922 essentially divides the basin's water, giving 7.5 million acre feet annually to the upper basin states of Colorado, New Mexico, Utah and Wyoming, and an equal amount to the lower basin states of Arizona, Nevada and California.
The upper basin states apportion their share among themselves. Colorado gets nearly 52 percent, New Mexico just over 11 percent, Utah 23 percent and Wyoming 14 percent.
If there's not enough water in the system for both the upper and lower basins to get their full 7.5-million acre foot share, the upper basin states still must deliver the full amount on average to the lower basin. The upper states then divide what's left according to their percentage formula.
Wyoming, a state of roughly 540,000 people, doesn't expect to use its full share of Colorado River water over the next 30 years even under the most ambitious growth scenarios. However, Phil Ogle of the Wyoming Water Development Office said his office is working on a new study of whether drier conditions could reduce the water supply in the Green River Basin.
Harry LaBonde, deputy Wyoming state engineer, said Wyoming's surplus draws attention from parched states downstream.
“There's no doubt that if you are using the water, you're more secure,” LaBonde said. “But the whole reason that Wyoming has entered into the Colorado River Compact and the Upper Colorado River Compact is to preserve its ability to use a certain allocation of water.”
Aaron Million, a Fort Collins, Colo., businessman, has applied for permits to build a private, multibillion-dollar pipeline from the Green River in Wyoming to Colorado. He has identified several Colorado agricultural interests that say they want more water and says the pipeline would also serve some customers in eastern Wyoming along the way.
Million's application spurred a coalition of Colorado municipalities to propose a 500-mile pipeline project of its own. The coalition is years behind Million's project in seeking federal and state approval.
Local governments in southwestern Wyoming have mobilized to fight both pipeline projects. The cities of Green River and Rock Springs and the counties of Sweetwater, Uinta, Sublette and Carbon oppose any draw from the Green, said Green River Mayor Hank Castillon.
Castillon's city recently invested millions in a kayaking course and walkways along the river that courses through town. Castillon fears that taking water from the river or the lake would hurt tourism, recreation and limit the town's future economic development.
The main question, Castillon said, is whether the State of Colorado has the right to draw any more water out of the Colorado River system.
Colorado's official answer to whether it has the right to more water seems to be “maybe.”
Ray Alvarado, spokesman for the Colorado Water Conservation Board in Denver, said his state is currently using between 2.3 million to 2.6 million acre feet of water under its share of the Colorado River.
How much more Colorado is entitled to isn't known, Alvarado said. But he said it's possible the answer could be none.
A new draft study by the Colorado Water Conservation Board concludes Colorado can draw between zero and 1 million acre feet more per year over the next 30 to 60 years, depending on climate change and other states' consumption, Alvarado said.
Colorado, meanwhile, estimates its population will rise from 5 million to 7.1 million people by 2030.
Both Million and the municipalities say Colorado's unused share of Colorado River water is adequate to meet the demands of their pipeline proposals, which would count against Colorado's share.
Million has applications pending with the Wyoming State Engineer's Office to divert some 250,000 acre feet of water a year from locations near the town of Green River and from Flaming Gorge Reservoir. He said he plans to modify his application to take all the water below the town to minimize environmental effects.
The U.S. Bureau of Reclamation, which operates Flaming Gorge Reservoir, estimated a few years ago that the reservoir could supply a pipeline drawing 165,000 acre feet a year over 40 years combined with other projected water uses. After 2050, as development in Wyoming increases, the bureau study projected the reservoir could sustain an annual diversion rate of 120,000 acre feet.
Bureau officials say they're revising their report and say it may well conclude even less water is available for any pipeline project.
Yet Million said he remains optimistic.
“We fully anticipate the surpluses in the system will be there that will allow the project to move forward with full protection of Flaming Gorge and the river below,” Million said. “And if they're not, the project shouldn't and will not go forward.”
The states of Wyoming and Colorado will participate in a U.S. Army Corps of Engineers environmental review of Million's project. The agency says it plans to have a final report on the project by 2014.
Wyoming's surplus water situation has worried state lawmakers for years.
“At some point are they simply going to say, 'You didn't use it, and when you didn't use it, you lost it,”' said Republican Rep. Kermit Brown of Laramie.
Yet Alexandra Davis, assistant director for water at the Colorado Department of Natural Resources said she doesn't believe development in Colorado places Wyoming's water is at risk because allocations are based on percentages of available water.
“Colorado doesn't get to say, 'Well we developed ours, therefore, Wyoming, you don't get yours,”' Davis said.
Saturday, May 15, 2010
Economist: Expect home-price weakness to persist
The following is an article written by Matt Carter for Inman News
Home sales expected to bounce back to normal by 2012
By Matt Carter, Friday, May 14, 2010.
WASHINGTON -- With the economy on the mend, home sales could bounce back to their historical levels by 2012, although the bulging foreclosure pipeline is likely to keep prices in check, economist Mark Zandi of Moody's Analytics told Realtors holding their annual midyear meeting in the nation's capital.
Zandi said he expects sales of new and existing homes to grow from between 5.5 million and 6 million this year to between 6 million and 6.5 million next year, and hit about 7 million in 2012. That would put home sales back on their historic trend line. But Zandi said that when it comes to home prices, "the coast is not quite clear."
With the foreclosure pipeline full -- Moody's estimates that 4.3 million out of approximately 50 million first mortgages are in foreclosure or overdue by 90 days or more -- Zandi expects further price weakness for the next six to 12 months and no real price growth through 2012.
Although loan modifications could help about half of homeowners facing foreclosure avoid losing their homes, another 9 million homeowners are underwater by more than 20 percent, he said, making them more likely to consider a "strategic default." Strategic defaults, or defaults by homeowners who are able to make their mortgage payments but choose not, will constitute a fourth wave of foreclosures, Zandi said.
The first wave of foreclosures, in 2006, often involved house flippers who got into trouble when prices stopped rising. Subprime borrowers facing interest-rate resets dominated the second wave in 2007, which was followed in 2008 by foreclosures among the unemployed and borrowers with negative equity.
There are already about 9.5 million vacant homes -- about 1.5 million more than would be expected by historical trends -- and it could take two years to work off that inventory, Zandi estimated. That assumes that builders keep putting up homes at a slower-than-usual pace of 600,000 homes a year, while new household formation produces demand for 1.35 million homes a year, a difference of 750,000.
While builders could very well pick up the pace of construction, Zandi expects demand will rise even faster -- a view echoed by National Association of Realtors Chief Economist Lawrence Yun. Yun said that with housing starts so far below historical norms, there's a chance that there will be housing shortages. Home prices could rise 2 to 3 percent this year and even more steeply after that because of the constraints on supply, he said.
While that might seem like a nice problem to have, Yun said abrupt price appreciation would not be good for businesses because some buyers will be priced out of the market. Sales of distressed homes are expected to account for between 30 and 40 percent of transactions for the rest of the year, Yun said. But the European debt crisis could lead to additional stress tests for U.S. banks, which would hurt jumbo and second-home lending, he said.
Zandi said the structured finance market, which channeled money into home lending before the financial crisis, remains "completely dormant." Fannie Mae, Freddie Mac and the Federal Housing Administration are standing behind 95 percent of loans, he noted.
"It's not healthy for our economy to be reliant on the government for mortgage credit," Zandi said. Nor is the rising ratio of federal debt to gross domestic product, which could eventually drive up interest rates and derail his optimistic economic projections, he said.
Zandi expects GDP, which fell 2.5 percent last year -- the worst showing since 1933 -- should grow by 3 percent this year, 4 percent in 2011, and 5 percent in 2012. But it may be 2014 before enough jobs are created to make up for the 9 million lost during the financial crisis, he said.
Businesses must create 125,000 a month just to keep up with the growing size of the nation's work force, he said -- a "break-even" pace he expects can be sustained this year. Next year, Zandi expects about 250,000 jobs will be created each month, a figure he said should grow to 300,000 in 2012.
Home sales expected to bounce back to normal by 2012
By Matt Carter, Friday, May 14, 2010.
WASHINGTON -- With the economy on the mend, home sales could bounce back to their historical levels by 2012, although the bulging foreclosure pipeline is likely to keep prices in check, economist Mark Zandi of Moody's Analytics told Realtors holding their annual midyear meeting in the nation's capital.
Zandi said he expects sales of new and existing homes to grow from between 5.5 million and 6 million this year to between 6 million and 6.5 million next year, and hit about 7 million in 2012. That would put home sales back on their historic trend line. But Zandi said that when it comes to home prices, "the coast is not quite clear."
With the foreclosure pipeline full -- Moody's estimates that 4.3 million out of approximately 50 million first mortgages are in foreclosure or overdue by 90 days or more -- Zandi expects further price weakness for the next six to 12 months and no real price growth through 2012.
Although loan modifications could help about half of homeowners facing foreclosure avoid losing their homes, another 9 million homeowners are underwater by more than 20 percent, he said, making them more likely to consider a "strategic default." Strategic defaults, or defaults by homeowners who are able to make their mortgage payments but choose not, will constitute a fourth wave of foreclosures, Zandi said.
The first wave of foreclosures, in 2006, often involved house flippers who got into trouble when prices stopped rising. Subprime borrowers facing interest-rate resets dominated the second wave in 2007, which was followed in 2008 by foreclosures among the unemployed and borrowers with negative equity.
There are already about 9.5 million vacant homes -- about 1.5 million more than would be expected by historical trends -- and it could take two years to work off that inventory, Zandi estimated. That assumes that builders keep putting up homes at a slower-than-usual pace of 600,000 homes a year, while new household formation produces demand for 1.35 million homes a year, a difference of 750,000.
While builders could very well pick up the pace of construction, Zandi expects demand will rise even faster -- a view echoed by National Association of Realtors Chief Economist Lawrence Yun. Yun said that with housing starts so far below historical norms, there's a chance that there will be housing shortages. Home prices could rise 2 to 3 percent this year and even more steeply after that because of the constraints on supply, he said.
While that might seem like a nice problem to have, Yun said abrupt price appreciation would not be good for businesses because some buyers will be priced out of the market. Sales of distressed homes are expected to account for between 30 and 40 percent of transactions for the rest of the year, Yun said. But the European debt crisis could lead to additional stress tests for U.S. banks, which would hurt jumbo and second-home lending, he said.
Zandi said the structured finance market, which channeled money into home lending before the financial crisis, remains "completely dormant." Fannie Mae, Freddie Mac and the Federal Housing Administration are standing behind 95 percent of loans, he noted.
"It's not healthy for our economy to be reliant on the government for mortgage credit," Zandi said. Nor is the rising ratio of federal debt to gross domestic product, which could eventually drive up interest rates and derail his optimistic economic projections, he said.
Zandi expects GDP, which fell 2.5 percent last year -- the worst showing since 1933 -- should grow by 3 percent this year, 4 percent in 2011, and 5 percent in 2012. But it may be 2014 before enough jobs are created to make up for the 9 million lost during the financial crisis, he said.
Businesses must create 125,000 a month just to keep up with the growing size of the nation's work force, he said -- a "break-even" pace he expects can be sustained this year. Next year, Zandi expects about 250,000 jobs will be created each month, a figure he said should grow to 300,000 in 2012.
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